FDI In China

Thanks to its economic reform begun in 1979, China has become one of the fastest growing economies. China has gradually liberalized its FDI policy regimes, reduced restrictions and barriers for FDI, and improved the investment environment. With its potentially huge and fast-growing domestic markets, relatively well-educated population and low-cost labor forces, China has become one of the most attractive destinations for FDI. China's accession to the WTO also accelerates FDI inflows to China. MNCs play a pivotal role in the economic development of the host countries and the globalization of the world economy.The geographic proximity and cultural familiarity of South Korea contributed greatly to the rapid increase in economic exchanges. China's rapid economic growth also provided an impetus for accelerating the bilateral economic exchanges. Owing to these factors, the two countries have developed an economically significant interdependence.According to a Korea International Trade Association report, Korean FDI to China has risen more than threefold between 1999 and 2003. Korea has now surpassed the US and Taiwan as China's third largest source of FDI. Meanwhile, China overtook the United States as Korea's primary import country, as well as the primary Korea's FDI recipient.It is important to understand the situation and trends of global FDI in China. The primary purpose of this thesis is to study FDI in China, mainly focuses on Korean investment in China. Using FDI data collected from reports, Internet, and other reference materials, the thesis not only displayed current situation of FDI and expansion of MNCs, but also analyzed and anticipated future trends of FDI, especially Korean investment in China. Finally, on the base of all these study,several proposals are provided in this regard.