{"id":2206962,"date":"2024-10-30T08:00:21","date_gmt":"2024-10-29T23:00:21","guid":{"rendered":"https:\/\/koreapro.org\/?p=2206962"},"modified":"2024-10-29T15:43:51","modified_gmt":"2024-10-29T06:43:51","slug":"us-treasurys-china-restrictions-may-squeeze-south-korean-corporations-profits","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/10\/us-treasurys-china-restrictions-may-squeeze-south-korean-corporations-profits\/","title":{"rendered":"US Treasury\u2019s China restrictions may squeeze South Korean corporations\u2019 profits"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The South Korean finance ministry <\/span><a href=\"https:\/\/www.moef.go.kr\/nw\/nes\/detailNesDtaView.do?searchBbsId1=MOSFBBS_000000000028&amp;searchNttId1=MOSF_000000000071135&amp;menuNo=4010100\"><span style=\"font-weight: 400;\">announced<\/span><\/a><span style=\"font-weight: 400;\"> on Tuesday that the U.S. Treasury Department\u2019s <\/span><a href=\"https:\/\/home.treasury.gov\/system\/files\/206\/TreasuryDepartmentOutboundInvestmentFinalRuleWEBSITEVERSION.pdf\"><span style=\"font-weight: 400;\">new rule<\/span><\/a><span style=\"font-weight: 400;\"> limiting outbound investments in China\u2019s high-tech sectors is expected to have a limited impact on South Korea\u2019s economy. Effective Jan. 2025, the U.S. rule restricts U.S. persons and entities from investing in advanced semiconductors, artificial intelligence and quantum computing technologies in China, citing national security concerns.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite the limited domestic impact anticipated, the South Korean government stated it would work closely with local businesses and experts to evaluate any indirect effects. The ministry emphasized that it would maintain open communication with industry stakeholders to support any required adjustments.<\/span><\/p>\n<p><b>WHY IT MATTERS<\/b><\/p>\n<p><span style=\"font-weight: 400;\">While the finance ministry has projected a minimal impact on South Korea\u2019s broader economy, the U.S. outbound investment rule could affect South Korean corporations with U.S.-based subsidiaries, as these subsidiaries are classified as \u201c<\/span><a href=\"https:\/\/www.fincen.gov\/who-united-states-person\"><span style=\"font-weight: 400;\">U.S. persons<\/span><\/a><span style=\"font-weight: 400;\">\u201d and must comply with the new restrictions. Subsidiaries like Samsung Semiconductor Inc., SK Hynix America and Hyundai-Aptiv\u2019s joint venture, <a href=\"https:\/\/www.aptiv.com\/en\/newsroom\/article\/aptiv-and-hyundai-complete-motional-ownership-restructuring\">Motional<\/a>, would need to adhere to these new rules.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This could constrain their investment or partnership activities in China, where opportunities in high-tech collaborations are a significant driver of growth. The rule\u2019s restrictions could, in turn, impact the South Korean parent corporations\u2019 profitability. U.S.-based subsidiaries, particularly in sectors like semiconductors and AI, will likely face increased compliance-related costs, reduced growth opportunities, and limitations on strategic partnerships in China, thereby affecting the bottom lines of those firms.<\/span><\/p>\n<div class=\"content-tags\"><a href=\"https:\/\/koreapro.org\/tag\/business-economy\/\"><span class=\"tag\">Business &amp; Economy<\/span><\/a><a href=\"https:\/\/koreapro.org\/tag\/inter-korean-foreign-relations\/\"><span class=\"tag\">Inter-Korean &amp; Foreign Relations<\/span><\/a><a href=\"https:\/\/koreapro.org\/tag\/technology-cyber\/\"><span class=\"tag\">Technology &amp; Cyber<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>The South Korean finance ministry announced on Tuesday that the U.S. Treasury Department\u2019s new rule limiting outbound investments in China\u2019s high-tech sectors is expected to have a limited impact on South Korea\u2019s economy. Effective Jan. 2025, the U.S. rule restricts U.S. persons and entities from investing in advanced semiconductors, artificial intelligence and quantum computing technologies [&hellip;]<\/p>\n","protected":false},"author":10407,"featured_media":2206963,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[24,28,29],"class_list":["post-2206962","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-briefings","tag-business-economy","tag-inter-korean-foreign-relations","tag-technology-cyber"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>US Treasury\u2019s China restrictions may squeeze South Korean corporations\u2019 profits - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2024\/10\/us-treasurys-china-restrictions-may-squeeze-south-korean-corporations-profits\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"US Treasury\u2019s China restrictions may squeeze South Korean corporations\u2019 profits - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"The South Korean finance ministry announced on Tuesday that the U.S. Treasury Department\u2019s new rule limiting outbound investments in China\u2019s high-tech sectors is expected to have a limited impact on South Korea\u2019s economy. 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