South Korea's Direct Investment Research

Since the policy of reform and opening-up was introduced, China's economy hasexperienced a rapid growth. The improvement of China's investment environment andits huge domestic market have made it one of first destinations of many foreigninvestments.Compared with all the other foreign countries which have poured investment intochina, Korea has a rather late establishment of diplomatic relations with china (in1992). However, the economic relations between China and Korea have developed atan astonishing speed. Up until Nov. 2005, China has become Korea's biggestinvestment destination, as well as the biggest trade partner and export market. AndKorea is China's third import market, forth biggest trade partner and export market.In order to make good use of Korea's investment in China, we have to get a goodunderstanding of the situation and the problems of Korea's investment. This articleanalyzes the reasons,characteristics and problems of Korea's investment in China,with a review of the history of the investment. Additionally, according to the generalgoal for the next 5 years which was set in the 11th Plan of China, this article offersseveral suggestions to make better use of Korea's investment from the angle of theoptimization of industry structure, the harmonious development of different districts,the innovation of state-own enterprises and so on.