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Translated by: MOS English Team – Wenqin
According to News from Epoch Times on May 18th, the Chinese Communist Party’s (CCP) “zero-clearing” city closure measures have not only increased the losses of Korean companies in China, but also severely hit the South Korean economy, which is heavily dependent on the CCP. There are reportedly at least 2,500 Korean companies in Shanghai alone, and many parts of the Communist China, including Shanghai and Beijing, have lockdowns in their cities to varying degrees. Under the closure of the city, the logistics of the Communist China has been shut down or delayed, and the supply chain cannot be upheld in time, which has caused South Korean chip, automobile, display, cosmetics and other companies to suffer great losses.
Semiconductor, which accounts for 30.8% of exports to China, bears the brunt of the losses. Due to the blockade, the chips could not be delivered in time, causing the overall semiconductor sales to shrink. The Communist China has also reduced domestic semiconductor demand due to the blockade, resulting in a decline in the prices of South Korea’s two main memory chips, DRAM and NAND. Hyundai Motor and Kia Motors also cut production due to supply chain issues. In addition, LG Display’s sales in the first quarter decreased by 26.51% from the previous quarter due to logistics and parts supply and demand issues.
LG Life Health and Amorepacific, the two giants of the Korean cosmetics industry that are highly dependent on the Chinese market, also shrank in the first quarter. The industry revealed that LG Life Health’s net profit in the first quarter fell sharply by 56% year-on-year, while Amorepacific’s net profit fell by 25.2%.
Edited and Proofread by: Linda Progress
Posted by: Peter Chen
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