Overseas Chinese Capitalists with 10 Trillion Won in Assets Preparing “Incheon Landing”

“They may not look rich, but they are able to raise 10 to 20 billion won overnight,” said Harry Lucas, reporter of an Indonesian newspaper, when I looked disappointed at the simple clothes of some 50 overseas Chinese capitalists who packed the 20-pyeong meeting room. They were participating in a Korea investment meeting held in the association of Chinese in Indonesia building on the outskirts of Jakarta, Indonesia at 3:00 p.m. on August 12.

The investment meeting was jointly organized by the Korean government and the private sector to attract Chinese capital in the Asian region to the 8th World Chinese Entrepreneurs Convention to be held in October in Korea for the first time. This year’s convention was supposed to be held in Nagoya, Japan, but the Korean government successfully changed the hosting city to Seoul by making an aggressive effort that promoted the 60th anniversary of the country’s liberation.

Overseas Chinese capitalists that Dong-A Ilbo interviewed through the investment meetings held in Taiwan, Hong Kong, Macao and Indonesia from August 8 to 13 had a keen interest in investment in Korea.

Why the Interest in Overseas Chinese Capital in Korea?-

“Due to cutthroat competition, it became hard to maintain business with service businesses, such as finance and distribution, alone. I’m planning to expand my business beyond China,” an overseas Chinese capitalist explained as the reason for participating in the event.

He is not alone in his agonizing that there may be a lack of appropriate investment destinations.

As the trend of liberalization and market openings in Southeast Asia grew in the late 1990s, overseas Chinese who had dominated the service sector of the region, including the areas of finance, real estate and distribution, faced challenges.

Peter Chen, chairman of a Hong Kong-based consulting firm on investment in China, said, “Overseas Chinese capital that was concentrated in mainland China has recently started to be shifted towards Korea,” explaining, “This is because Korea has good infrastructure, including IT, and a high level of customers purchase.”

There are also expectations that, with “Hallyu,” or the Korean “wave,” spreading across Southeast Asia, an investment in Korea might bring some new business opportunities.

Fandi Wang, who is running an electronics manufacturing company in Indonesia, said, “With Hallyu all the rage in Indonesia, any Korean goods sells well,” adding, “Although I don’t purchase from Korea on a regular basis for now, I’m planning to expand the import volume by opening an office in Incheon.”

Keen on Investment in the Service Sector-

The keenest interest was drawn to Chinatown and Asian Village projects that the Korean government is pushing forward with in the Yeongjong and Cheongra districts in the Incheon Free Economic Zone.

The chairman of the Lippo Group, Indonesia’s largest finance group with more than 10 trillion won in aggregate assets, expressed his will to invest, “We sent our officials to Korea to review feasibility of the Asian Village project and concluded that the project planning is well organized.”

The Cheongra district is 5.41-million-pyeong reclaimed land near the Yeongjong Grand Bridge in Incheon. About 250,000 pyeong of the land will be developed into an Asian Village that could absorb tourists from Asia, including China and Japan.

Overseas Chinese capitalists are eyeing the district because they can target almost five million of annual Asian tourists and 10 million Koreans in the Seoul Metropolitan Area with a high level of spending.

Jackie Wong, investment advisor of Hong Thai Travel, a Hong Kong travel agency, said, “The number of China’s annual overseas tourists currently stands at 25 million but is projected to increase to 50 million in 10 years,” predicting, “If Korea secures infrastructure targeting them, the country will be able to attract more Chinese tourists who now go to Singapore and Macao.”

The chairman of Indadi Utama Group, a major Indonesian company, said, “Chinese tourists want to have good authentic Chinese food and stay at a reasonable hotel, rather than at a five-star hotel.” He also explained, “As Korea is yet to have restaurants and hotels palatable to Chinese tourists, it is a good investment opportunity.”

Korea Should Improve its Investment Climate Further-

However, some overseas Chinese capitalists say, “I feel cautious to do business or make investments in Korea, since the country has various regulations in place.”

An investment advisor of Grand Capital Group in Taiwan, which invests in software development, such as online games, said, “I’m searching for an investment destination among Korean software developers,” pointing out, “As far as I know, however, it is easy to invest but hard to make profits because of various restrictions.”

The chairman of Taiwan’s association of electric and electronics industries said, “Some say that Korean customs officials check your bags more thoroughly if you go overseas with golf clubs,” adding, “It seems that there is still prejudice against the rich and making money.”

Overseas Chinese capitalists requested to hold events like the investment meeting more often.

The chairman of a major Hong Kong company said, “I want to find a highly reliable Korean company and expand my business, but it’s not easy to find a channel.” He also added, “I’m already anticipating the World Chinese Entrepreneurs Convention in Seoul scheduled for October.”

Chang-Won Kim changkim@donga.com