A Study on the Policies to Promote Chinese FDI toward Korea

Abstract

The Chinese government's "going out" strategy has not only contributed to China's economic development, but also to the prosperity of the World economy. Economic development mainly depends on foreign trade and foreign investment in South Korea. China's "going out" strategy is to get a win-win relationship between this two countries.

Since 1992, China and Korea have established officially diplomatic relations and two countries have achieved remarkable development in various fields such as politics, economics and culture. The Korean government policies are intended to attract continued investment from the Chinese enterprises by increasing close diplomatic relations between both countries. In addition, Korea and China are close neighbors. Similar lifestyle and culture are only some of the many advantages which directly lead to favorable conditions which may attract the investments of Chinese enterprises in Korea.

Recently Chinese enterprises' goals are to construct a network of international operations, to expand overseas markets and to ensure that resources improve R&D

capability to target active FDI. Therefore, China's foreign investment has increased by more than 50 percent annually, placing China next to the United States and Japan as the third largest foreign investor, especially after the 2008 global financial crisis. China's use of abundant funds actively promotes the development and acquisition of vehicles and other core manufacturing high-tech enterprises for the development of foreign minerals and energy. Moreover, M & A like Chinese SsangYong Motor, HYDIS and other events are strongly believed to contribute to Chinese companies giving attention to and investing in Korea.

This paper introduces the theory of FDI and related literature, which thereafter explains the necessity of Chinese direct investment toward Korea and also features the present states simply explained on China's direct investment in Korea. After SsangYong Motor is acquired by Chinese companies, HYDIS and Actoz Soft (the most recent Chinese enterprises to make recommendations to promote investments in Korea) analyze the results of the operations and inquire about the direct investment of Chinese enterprises in Korea.

I personally wish that the above statements will encourage and convince Chinese enterprises to invest in Korea, not only now but also in the future.