A Study On The Korean Fdi Strategy Base On The Provincial Influencing Factors In China

Currently Korea's Foreign Direct Investment is active in China. China is the ideal target country for Korean FDI, because China is geographically close to Korea, has enormous land & natural resources, economic growth is very fast and has good talents resources. But because more and more foreign companies enter into the Chinese market, and the vigorous development of China's domestic companies, there is intense competition in the Chinese market. With the rapid development of China's economy, the production cost is rising in Chinese market; as perfect China's industrial system, the Chinese government changes the investment policy constantly, for this reason, these changes are both opportunities and crisis to Korean companies.Through the analysis of the investment environment of each province of China, this paper will research the successful strategy of the Korean enterprises'investments in China, analyse the investment environment in which Korean companies are concentrated in, summarize the major geographic selection factors, analyse the general strategic plan and the strategic plan of each province by South Korean enterprise in China.Through the systematic analysis of the investment environment in China, of the relevant policy in China, of successful Korean companies, this paper will construct the ideal current Korean FDI strategy in each province of China. Promote the positive direction of Korean FDI development in China. As far as possible reduce the investment failure case. The two countries work together to promote trade development.The factors which effect Korean companies'investment in each province of China are: GDP of each province, the average manufacturing wage amount of each province, the straight distance between Seoul and each provinces, the education level of each province, and the total roads length of every province. This study selects the relevant information and data from 2000 to 2002 and 2007 to 2009, and forms the linear regression model. Makes an empirical analysis on the determinants of Korea's investment in China by province, to judge the impacts of each factor on the South Korean investment in China. And analysis the changes of China's business environment by studying the relevant investment policies in recent years. All the relevant elements are integrated in the conclusion, where the proposed application strategy of Korean companies investing in China are proposed.The ideal investment strategy for Korean FDI in China is: First, market segmentation and differentiation strategies; Second, the localization strategy; Third, the use of vertical / horizontal integration of internal operations to enhance competitiveness; Fourth, take advantage of relevant incentive policies; Fifth, establish R&D center, and diversification of product. With actual proof analysis result, is based in Chinese different province investment environment analysis result, presented provincial success investment strategy of Korea's FDI.Through the above research, offer a reliable feasible direct investment strategy for Korean enterprises in China. So that can promote the benign development of the two countries' trade.