China has been growing rapidly, and it is expected to continue its rapid growth aided by its entrance into the World Trade Organization (WTO) last year, the Great Development Project for West China, the 2008 Olympic Games at Beijing and attractive inc...
China has been growing rapidly, and it is expected to continue its rapid growth aided by its entrance into the World Trade Organization (WTO) last year, the Great Development Project for West China, the 2008 Olympic Games at Beijing and attractive incentives for foreign direct investments in China.
The trend of Korean companies direct investments in China, which started about ten years ago, is moving from the establishing entry modes to China toward the operational ones. The purpose of Korean companies’ investments in China as the production bases in order to make the most of cheaper labor costs of China are now changing into actively penetrating China domestic markets.
This study concentrates on the localization strategies of Korean companies, which try to make new investments and build up production bases in China. This research study the China’s foreign direct investment environments and analyze the situation for the Korean and other foreign companies. The localization theories are also discussed.
Then, the localization strategies were respectively compared among the foreign direct investments to East Asia, North America Free Trade Agreement (NAFTA) area and South America.
Also, this study analysis and compare the successful Korean direct investment cases in China, LG Electronics Industry Co., with the localizing strategies of Samsung, Nokia and Motorola. By this process, the study presents a localization strategy model in China, which includes human resources, components, research & development, international marketing, thus presenting to companies some useful implications for foreign direct investments in China.