South Korea

Korea tensions dampen ardour of Seoul firms for Shandong projects

PUBLISHED : Thursday, 02 June, 1994, 12:00am
UPDATED : Thursday, 02 June, 1994, 12:00am

SOUTH Koreans' investment enthusiasm in Yantai is showing signs of dipping in the face of the political tension between the two Koreas, according to the city's vice-mayor Wang Dehe.

The first sign of the impact of the recent heightening of tensions on the Korean peninsula has been a drop in the number of projects involving Seoul firms which have been avid investors in Shandong province, especially since China and South Korea declared friendly relations in August 1992.

Shandong province absorbs most South Korean investment on the mainland, with Yantai accounting for about 10 per cent of total South Korean investment in China last year.

''Now Koreans' investment enthusiasm has slipped,'' said Mr Wang, who would not comment on whether that was due to the country' political uncertainties.

In the first four months of this year, 35 projects were signed by South Koreans and approved by the government, compared with 126 for the whole of last year.

However, while the project numbers are down, the total investment figures do not yet suggest a fall in the South Korean fund influx.

Total South Korean investment agreed in contracts signed and approved in the first four months of the year stood at US$27.77 million, about half of the $58 million for the whole of 1993.

On another front, Mr Wang said Taiwanese investment in Yantai had not lessened despite troubled relations across the Taiwan Strait.

However, he said city officials were concerned the tension was causing the city some problems.

Taiwan ranked as the city's second largest investor.

Taiwanese investment agreed on contracts approved and signed in the first four months of the year amounted to $47.22 million, compared with $211.20 million for the whole of 1993.

A total of 49 Taiwanese-invested projects were signed and approved in the first four months, compared with 230 for the whole of 1993.