The purpose of this thesis is to provide Korean enterprises with informations and data on China by the theoretical analysis about investment environment, findings and problems with the suggestion of promotion plan to China.
The cooperation between K...
The purpose of this thesis is to provide Korean enterprises with informations and data on China by the theoretical analysis about investment environment, findings and problems with the suggestion of promotion plan to China.
The cooperation between Korea and China has been increased because the two nations have incentives to cooperate with each other in terms of economic and political aspects.
After following the modernization policy which emphasizes the principle of practicalism and open-door policy, China transformed its social planned economy into the free market economy. That transformation policy resulted in the reformation of trade management system which has the characteristics of state-owned organization in China. And the basic goal of such trade management system was decentralization of foreign trade management and establishment for the promotion of foreign trade and foreign direct investment to China. That goal affected the system of foreign trade management which was over-controlled by the headquarter in China and decentralized tbat system to and into the lower part, provinces, cities, self-governed cities, and enterprises with the power of autonomy and right.
China has continued to open and reform the social system since 1987 and imp roved the investment environment and made effort to induce the foreign capital-intensive high technology with the entry of foreign general companies especially for the Korean enterprises' investment. Rapid changes of internal management environment--low labour productivity, high wage level, frequent labour strike, domestic high interest rate, also with the changes of external environment--developed countries' trade protection and fair trade policy have forced to transfer Korean domestic production base to abroad. Deplomatic establishment between China and Korea on August 1992 made China as the priority country to investment by Korea and Korean enterprises.
China has designated many economic special districts for the open policy abroad and utilized this districts for the inducement of high technology and management technique. As a result of that policy, she greatly induced the foreign capital and technology for the establishment of capitalism. But until now, China has a lot of problems such as lack of infrastructure, short supply of low materials and equipments for manufacturing, complex administration system on investment and small inland market. Even with a lot of problems, under the WTO system China will be the great potential market to the rest of the world.
According to the result of this thesis , investment promotion plan for Korean enterprises to China are as follows:
First, Korean enterprises should have the target for China's domestic market. For that purpose, product differentiation by the district partition should be recommended.
Second, Korean enterprises should use the method of joint venture and diversification by the type of industry. That method includes the cooperation between general and medium company.
Third, Korean enterprises should increase investment to the North-East three districts because those districts will become central districts for the economic cooperation.
Fourth, Korean enterprises should try to find a solution to the entry plan for the construction of market because potential construction demand in China will be increased greatly.
Fifth, Korean enterprises should establish the agreement between countries for the investment of the technology intensive industry such as automobile industries which will induce the greastest demand in the China market.