Daewoo-China, the Chinese affiliate of South Korean Daewoo International, will be merged with the company's Beijing office in 2011.
Daewoo International, a 68.15 percent-stake affiliate of South Korean steel titan POSCO, is mainly involved in the trading of steel, machinery and crude oil. With its Guangzhou office incorporated in 2009, Daewoo International is currently running four investment corporations, two trade corporations, 13 offices and other subsidiaries in China.
According to a POSCO release, the pending merger will enable the company to be more actively engaged in businesses in the country - northern China with Beijing as its center, central China with Guangzhou, and southern China with Shanghai as its hub.
Under Chinese law, local offices of foreign companies can only conduct business in dollars, so they cannot buy or sell products in Chinese RMB. Since trading companies such as Daewoo International deal with a high volume of products in order to earn higher profits, the merger will allow the company to earn more by handling higher volumes.