China Desperate to Stop South Korean, Japanese Firms from Leaving Market: Leaked Documents

September 16, 2020 Updated: September 17, 2020

Amid a crippling trade war with the United States, declining demand, and supply chain disruptions due to the COVID-19 pandemic, foreign companies are leaving China in droves. South Korean companies, Japanese companies, Taiwanese companies, and American companies such as Microsoft, Google, and Apple are all moving their production out of China.

The Epoch Times received a set of internal documents from the Huizhou city government in Guangdong Province, showing that amid the exodus of foreign companies, the Chinese Communist Party (CCP) issued an urgent order to “keep Japanese and South Korean companies [from leaving,]” for both economic reasons and the Party’s political agenda.

In October 2019, South Korean tech giant Samsung closed its Huizhou factory and stopped manufacturing mobile phones in China. In June 2020, Samsung announced that its display screen production would be relocated from China to Vietnam. Samsung’s withdrawal from China hits Huizhou’s economy hard.

According to an Aug. 10 government report drafted by the Huizhou Commerce Bureau and sent to the local foreign affairs bureau, in the year 2020 thus far, import and export trade in Huizhou fell by 77.4 and 89.5 percent respectively compared to the same period last year.

Authorities stated that Huizhou’s economy was “affected by the Sino-U.S. trade war, pandemic prevention and control, and Samsung Electronics’ withdrawal of Huizhou and many other factors that have compounded the impact.”

An Urgent Order

In a work plan document issued by the city government, it disclosed that the city received a letter—marked “extra-urgent”—from the Guangdong provincial government’s foreign affairs office, requesting the city to “hold onto Japan and South Korea.”

“Use [the idea of] fighting the pandemic together as an opportunity to pull in neighboring countries such as Japan and South Korea,” the provincial government stated.

In order to do that, the Huizhou commerce bureau suggested a few measures, such as “promoting the China-South Korea (Huizhou) Industrial Park at both the China (Guangdong)-Korea Exchange Conference and the Japan-Guangdong Economic Promotion Conference, which took place in June. It also suggested that during the conference, officials should arrange for Japanese and South Korean companies to visit Huizhou for investment opportunities.

In addition, the Huizhou commerce bureau disclosed its recent exchanges and cooperation projects with the two countries, including the establishment of a new Huizhou Economic and Trade Representative Office in South Korea. It was listed for operation at the end of August. The projects include convincing Japanese, South Korean, and Singaporean companies and institutions to visit Huizhou, visiting “key enterprises” in those countries, and carrying out “investment promotion.”

Current affairs commentator Li Linyi interpreted that this letter showed that the Chinese regime was desperate to stop foreign companies from moving production out of China and to “protect China’s regional industrial chain.”

Hoping to Expand Belt and Road Initiative

The Huizhou government’s internal documents revealed that the order to “hold Japan and South Korea” not only had economic considerations, but also is a political task for the Party’s “Belt and Road Initiative (BRI).”

Rolled out by Beijing in 2013, it is the regime’s signature infrastructure investment project aimed at advancing its influence worldwide.

But critics say the BRI places developing countries into a “debt trap” by offering unsustainable loans, while exploiting their natural resources like timber, crude oil, and minerals to drive the Chinese economy.

The BRI office of Huizhou said in a “work vision” document dated Jan. 14 that it hoped to expand BRI into East Asian countries, especially South Korea. The city would promote local businesses to expand to markets in East Asia, make multiple visits to Japan and South Korea to promote and attract investments, and plan for the construction of the China-Korea (Huizhou) Industrial Park.

Authorities also hoped to promote BRI through sister city relationships. A document from the Huizhou foreign affairs office noted that the city previously forged 5 “friendship cities”: Seongnam in South Korea, Worcestershire in the United Kingdom, North Vancouver in Canada, Milpitas in the United States, and Pyramid of St. Martin in Mexico. But among these five cities, only Seongnam was still “active” due to “special cultivation [of the relationship],” the document stated. The other four city relations were “in occasional contact” or had “stopped.”

In the past five years, Huizhou and Seongnam have interacted every year, from youth exchanges and government visits to cooperation in the fields of economy, tourism, and education, the document noted.

Commentator Li said it was clear Chinese authorities were hoping to lure South Korea into BRI by strengthening economic and trade cooperation with it.

He also noted that Beijing had two purposes for exploiting the relationship with South Korea: tapping its economic and technological resources to alleviate China’s economic crisis, and exerting political influence on South Korea to go along with Beijing’s agenda.

China is currently South Korea’s largest trading partner and largest export market. Li said that the South Korean government’s lack of a position on Beijing’s growing encroachment of Hong Kong could be indicative of its fear of upsetting Beijing due to economic interests.

Li also stated that these internal documents indicate that the Chinese regime is attempting to cushion the severe impact of economic sanctions from the international community by trying its best to “hold onto Japan and South Korea.”