Slump at home and sharp fall in won’s value force many to leave
By Tracy Quek 25 December 2008
BEIJING: Financial troubles back home in South Korea have put Miss Kim Ja Hyun on an austerity drive of late.
Where she used to eat out at least three times a week, shop for clothes on weekends and take cabs freely, now the 24-year-old university student in Beijing cooks her own meals, stays in and hops on buses to get around town instead.
But her biggest sacrifice will come next year. Miss Kim will give up plans to take up a post-graduate course at the Beijing University of Chinese Medicine after she completes her five-year undergraduate degree at the college next July.
Instead, she will head home to South Korea’s Incheon city, find a job and help her parents ride out the financial storm.
She is not the only South Korean in China feeling the pinch.
South Koreans account for the largest group of foreigners residing on the mainland. Their country’s severe downturn is forcing many to leave for home, resulting in an ‘exodus’ of Korean citizens from the mainland.
Over the past three months, some 20 per cent of the 700,000 South Koreans living, studying and working in China have had to leave because of the financial turmoil at home, said Mr. Heo Seong Moo, assistant director of the Korea Trade Investment Promotion Agency in Beijing.
Of the 540,000 Koreans left on the mainland, more might have to leave early next year if the downturn worsens, he told The Straits Times.
The global financial turmoil has slowed Asia’s growth but South Korea, the region’s fourth-largest economy, has been particularly troubled by falling exports and weak domestic demand.
A check by The Straits Times found that other expatriates in China, including those in the Japanese, Taiwanese and Singaporean communities, have not had to resort to such drastic measures as yet.
What has hit individual South Korean expatriates the hardest is the sharp depreciation of the won, which has plummeted in value against the yuan by almost half over recent months. This has made living in China almost twice as expensive as it was before the crisis for the South Koreans.
‘At the start of the year, one yuan was worth about 130 Korean won, now it is 200-210 won. Everyone is watching his budget now,” said Mr. Heo.
The won’s fall against the yuan has also affected Korean businesses in China.
A lower won may mean goods exported from South Korea are cheaper, but Korean firms on the mainland are not quite benefiting because they have to underwrite operating costs in yuan. This includes rental, some staff salaries, and the purchase of raw material in China.
In addition, many small businesses still rely on their owners’ savings and bank loans taken back home - all in won - for capital, entrepreneurs told The Straits Times.
Large firms are now slashing their budgets, leading to retrenchments and downsizing. Some are also pulling back residential representatives to China. These employees, who are usually on two- to five-year terms, are costly for firms as they often get perks including generous housing and schooling allowances. Firms are also asking employees to downgrade to cheaper flats, said Mr. Heo.
Statistics for the number of Korean businesses that have closed down in recent months are hard to come by, said Mr. Heo. ‘Many have certainly gone bust but they do not usually like to report this.’
Faced with an even bleaker year ahead, his agency is scrambling to help enterprises find some relief.
‘We are working very hard to help Korean businesses here to find new markets, new sectors to explore, but it is an uphill task,’ he said.
Another big group of South Korean residents facing tough times is the students, many of whom flock to Beijing for Chinese-language courses. A number of them might have to leave after concluding their semesters at year-end as most of them here are supported by their parents and do not have scholarships, said Mr. Heo.
There are some 62,000 South Korean students in China, or about 38 per cent of the foreign student population on the mainland, said Mr. Piao Changzhi, a department head with the Korea International Trade Association’s Beijing office.
He did not have figures of recent student departures but a check with two universities - Tsinghua University and Beijing Language and Culture University - where Koreans make up the bulk of their intake for Chinese-language courses, showed that enrolment this year has dropped as much as 20 per cent compared to last year.
‘In all my life, I have never seen my family’s financial situation this bad,’ lamented Miss Kim, who arrived in Beijing in 2003 for her undergraduate course.
Her mother was forced to wind up her small purchasing business recently and, for the past two months, has been unable to send Miss Kim her monthly 1,400 yuan (S$295) rental for a shared apartment in Beijing.
With just her father drawing a modest salary as a civil servant, her parents are struggling to support her and their youngest daughter, 22, a university student back home, she said.
Miss Kim said: ‘I will be sad to leave, but at this time, there is no other way.’
1 comment:
Koreans in China Feel the Pinch
Slump at home and sharp fall in won’s value force many to leave
By Tracy Quek
25 December 2008
BEIJING: Financial troubles back home in South Korea have put Miss Kim Ja Hyun on an austerity drive of late.
Where she used to eat out at least three times a week, shop for clothes on weekends and take cabs freely, now the 24-year-old university student in Beijing cooks her own meals, stays in and hops on buses to get around town instead.
But her biggest sacrifice will come next year. Miss Kim will give up plans to take up a post-graduate course at the Beijing University of Chinese Medicine after she completes her five-year undergraduate degree at the college next July.
Instead, she will head home to South Korea’s Incheon city, find a job and help her parents ride out the financial storm.
She is not the only South Korean in China feeling the pinch.
South Koreans account for the largest group of foreigners residing on the mainland. Their country’s severe downturn is forcing many to leave for home, resulting in an ‘exodus’ of Korean citizens from the mainland.
Over the past three months, some 20 per cent of the 700,000 South Koreans living, studying and working in China have had to leave because of the financial turmoil at home, said Mr. Heo Seong Moo, assistant director of the Korea Trade Investment Promotion Agency in Beijing.
Of the 540,000 Koreans left on the mainland, more might have to leave early next year if the downturn worsens, he told The Straits Times.
The global financial turmoil has slowed Asia’s growth but South Korea, the region’s fourth-largest economy, has been particularly troubled by falling exports and weak domestic demand.
A check by The Straits Times found that other expatriates in China, including those in the Japanese, Taiwanese and Singaporean communities, have not had to resort to such drastic measures as yet.
What has hit individual South Korean expatriates the hardest is the sharp depreciation of the won, which has plummeted in value against the yuan by almost half over recent months. This has made living in China almost twice as expensive as it was before the crisis for the South Koreans.
‘At the start of the year, one yuan was worth about 130 Korean won, now it is 200-210 won. Everyone is watching his budget now,” said Mr. Heo.
The won’s fall against the yuan has also affected Korean businesses in China.
A lower won may mean goods exported from South Korea are cheaper, but Korean firms on the mainland are not quite benefiting because they have to underwrite operating costs in yuan. This includes rental, some staff salaries, and the purchase of raw material in China.
In addition, many small businesses still rely on their owners’ savings and bank loans taken back home - all in won - for capital, entrepreneurs told The Straits Times.
Large firms are now slashing their budgets, leading to retrenchments and downsizing. Some are also pulling back residential representatives to China. These employees, who are usually on two- to five-year terms, are costly for firms as they often get perks including generous housing and schooling allowances. Firms are also asking employees to downgrade to cheaper flats, said Mr. Heo.
Statistics for the number of Korean businesses that have closed down in recent months are hard to come by, said Mr. Heo. ‘Many have certainly gone bust but they do not usually like to report this.’
Faced with an even bleaker year ahead, his agency is scrambling to help enterprises find some relief.
‘We are working very hard to help Korean businesses here to find new markets, new sectors to explore, but it is an uphill task,’ he said.
Another big group of South Korean residents facing tough times is the students, many of whom flock to Beijing for Chinese-language courses. A number of them might have to leave after concluding their semesters at year-end as most of them here are supported by their parents and do not have scholarships, said Mr. Heo.
There are some 62,000 South Korean students in China, or about 38 per cent of the foreign student population on the mainland, said Mr. Piao Changzhi, a department head with the Korea International Trade Association’s Beijing office.
He did not have figures of recent student departures but a check with two universities - Tsinghua University and Beijing Language and Culture University - where Koreans make up the bulk of their intake for Chinese-language courses, showed that enrolment this year has dropped as much as 20 per cent compared to last year.
‘In all my life, I have never seen my family’s financial situation this bad,’ lamented Miss Kim, who arrived in Beijing in 2003 for her undergraduate course.
Her mother was forced to wind up her small purchasing business recently and, for the past two months, has been unable to send Miss Kim her monthly 1,400 yuan (S$295) rental for a shared apartment in Beijing.
With just her father drawing a modest salary as a civil servant, her parents are struggling to support her and their youngest daughter, 22, a university student back home, she said.
Miss Kim said: ‘I will be sad to leave, but at this time, there is no other way.’
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