With North Korea’s latest nuclear test accelerating geopolitical tension, foreign companies operating here on Monday expressed concerns over Pyongyang’s continued threat, but were seen to remain calm.
Many foreign companies here are “familiar with constant noise from the North” and also such rhetoric “does not create any significant issues or concerns,” according to a group of US companies here.
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“There is no significant threat to day-to-day business for our member companies nor do we anticipate such will occur,” said the American Chamber of Commerce in Korea in a statement. “The deterrent strength of the US and Korean military and their readiness provides sufficient assurances that the current rhetoric does not present any threat to the ongoing business of our member companies.”
Foreign companies stationed in South Korea, which is technically still at war, usually have contingency plans as well as manuals for risk management. But the confrontation between Seoul and Pyongyang and the recent increase in military tension hasn’t affected any companies or pushed them to reconsider doing business here.
“Globally, GM has in place the appropriate measures to manage risk across the business,” said an official at the carmaker’s local unit.
Tech firms also remained calm even though they haven’t received any direction from their head offices.
“There is no notable direction being made from headquarters (over the North Korea risk) yet although we have a system designating a nation as a dangerous place for a business trip if there is serious political instability,” said an official from the Korean office of the US software giant Microsoft.
Intel has a crisis management team closely monitoring South Korea’s business since North Korea’s torpedo attack on the Cheonan warship in 2010, an official at its local unity said, adding that there’s no special measure being taken for now.
However, foreign investors to South Korea’s equity market, may act differently, said a hedge fund manager in Hong Kong.
“I think it is probably happening. As you may see large cap index in Korea having a strong performance for almost one and a half years supported by billions of foreign capital, and those investors are sitting with good profits already,” he said.
“If there is any escalation of risk, they can just sell their investment to lock in profit. Then it will trigger a snowball effect … The market has been up a lot already, I think investors are looking carefully on the risk and catalyst to reduce their positions.”
By Cho Chung-un (
christory@heraldcorp.com)
Shin Ji-hye (
shinjh@heraldcorp.com)
Kim Bo-gyung (
lisakim425@heraldcorp.com)
