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S. Korean firms urged to focus on China's emerging cities

All Headlines 18:02 July 06, 2011

By Kim Young-gyo

HONG KONG, July 6 (Yonhap) -- South Korean companies need to seek more business opportunities in China's emerging cities as Beijing's expanding economy is spurring consumption nationwide, a report said Wednesday.

The Korea Trade-Investment Promotion Agency (KOTRA) said in the report that more South Korean companies should set up businesses in China's smaller cities as consumption growth in such places has been outpacing that of the country's bigger first-tier cities, such as Beijing, Shanghai and Guangzhou.

"South Korean firms should start paying attention to the robust urbanization of China and execute different marketing activities aimed at meeting needs of consumers in each city," said Hwang Yoo-sun at KOTRA's China office.

According to an industry report, sales for China's top 100 chain department stores grew faster in second- and third-tier cities than in first-tier cities in 2009.

The average sales growth of department stores and supermarkets was 5.3 percent in first-tier cities, but reached 19.3 percent in second- and third-tier cities, including Chengdu, Dalian, Suzhou and Tianjin.

KOTRA said it will increase the number of its business centers in China this year to 15 from the current seven in an effort to support South Korean businesses operating in the country.

In April, it opened a business center in the southwestern city of Chongqing. It plans to launch new business centers in Hangzhou and Zhengzhou this month, and in Shenyang, Nanjing, Xiamen and Changsha next month.

China is the largest buyer of South Korean-made goods and has contributed to Seoul's sizable trade surplus in recent years, while South Korea is China's third-largest trading partner after the United States and Japan.

Their bilateral trade reached US$188.4 billion last year. Both countries are expecting the volume to top $300 billion in 2015.

ygkim@yna.co.kr
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