Will President Lee's state visit to Beijing revive declining Korea-China economic ties?

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Will President Lee's state visit to Beijing revive declining Korea-China economic ties?

Published: 01 Jan. 2026, 13:55 Updated: 01 Jan. 2026, 14:19

Audio report: written by reporters, read by AI

President Lee Jae Myung, right, speaks with Chinese President Xi Jinping during the gala dinner of the 2025 Asia-Pacific Economic Cooperation Leaders’ Meeting at the Lahan Select Hotel in Gyeongju, North Gyeongsang, on Oct. 31. [YONHAP]

As Korean companies have steadily reduced their business footprint in China, attention is turning to whether President Lee Jae Myung’s upcoming state visit to Beijing — accompanied by the heads of Korea’s four largest conglomerates and other top business leaders — could help revive bilateral economic cooperation.

According to an analysis commissioned by the JoongAng Ilbo to corporate data firm Korea CXO Institute, the number of Chinese subsidiaries operated by Korea’s top 10 conglomerates fell by 127, or 17 percent, from 435 in 2021 to 308 in 2025. Across all large business groups, the figure declined from 874 to 808 over the same period.

By contrast, the number of U.S. subsidiaries held by the large Korean companies nearly doubled, rising from 885 to 1,673, highlighting a clear shift in global resource allocation away from China and toward the United States.

“China is no longer a market where companies can grow simply by entering it,” said Oh Il-seon, head of the Korea CXO Institute.

Hyundai Motor and Kia illustrate the trend. The two automakers sold more than 1.14 million vehicles in China in 2016, but sales fell sharply to 204,573 units last year following the dispute over the Terminal High Altitude Area Defense, or Thaad, system, which triggered unofficial Chinese restrictions on Korean businesses and intensified price competition from local automakers.

As demand weakened, Hyundai Motor shut down two of its five Chinese plants — its first Beijing factory in 2021 and its Chongqing facility in 2024 — and is in the process of selling its Changzhou plant in Jiangsu Province, which began operations in 2016.

Geopolitical rivalry between the United States and China has further complicated corporate decision-making. While companies still need China as a production base, rising political and strategic risks have left Korean firms walking a tightrope.

Global corporate leaders, including Samsung Electronics Executive Chairman Lee Jae-yong and SK hynix CEO Kwak Noh-jung, attend a meeting with Chinese President Xi Jinping at the Great Hall of the People in Beijing on March 28. [YONHAP]

Chinese President Xi Jinping’s meeting last March with Samsung Electronics Executive Chairman Lee Jae-yong and SK hynix CEO Kwak Noh-jung reflected the same tensions.

Semiconductors are a particularly sensitive area. Under U.S. export controls, the shipment of U.S.-made equipment to Chinese semiconductor plants requires annual approval. Samsung produces NAND flash memory at its Xi’an facility, while SK hynix manufactures DRAM at its Wuxi plant, operating in a way designed to absorb supply-chain risks.

At the same time, Chinese investment in Korea has been rising, driven in part by Korea’s growing strategic importance amid intensifying U.S.-China technological competition. According to the Korea Institute for International Economic Policy, China’s reported investment in Korea surged 147.4 percent year on year in 2024 to a record $6.79 billion.

Xiamen Tungsten, a Chinese battery materials company, added $15 million to its existing $13 million investment in its Saemangeum plant in North Jeolla in 2024, while China’s Ningbo Shanshan acquired LG Chem’s liquid crystal display polarizer business for $1.1 billion in 2020 — one of China’s largest investments in Korea in recent years.

Against this backdrop, more than 200 business leaders — including Samsung’s Lee, SK Group Chairman Chey Tae-won, Hyundai Motor Group Executive Chair Euisun Chung and LG Group Chairman Koo Kwang-mo — are set to accompany President Lee on his visit to China from Sunday to Jan. 7.

Business circles say the trip could help reopen stalled channels of economic cooperation. It will be the first large-scale Korean economic delegation to visit China since the 2019 Korea-China-Japan trilateral summit.

“China remains one of the world’s most important manufacturing bases and markets,” said one business executive, speaking on condition of anonymity. “But political uncertainty has grown so much that it’s difficult to make bold decisions the way companies once did.”

Jee Man-soo, a senior research fellow at the Korea Institute of Finance, warned in a recent report that investment in geopolitically sensitive sectors such as semiconductors, batteries and automobiles can serve as both a “business foothold” and a “potential vulnerability.”

“The government needs to consistently maintain the position that it does not intervene in companies’ autonomous management decisions,” Jee said.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM SU-MIN [[email protected]]