How Can NICs-based Firms Invest Directly In The Strategic Emerging Industries In China

China has become the most popular destination of Foreign Direct Investment (FDI) since the economic reforms in1978and WTO accession2001, and there have been extensive empirical studies and literature on China’s FDI. In general, FDI in developing countries has been considered one of the most important sources of economic development and many studies tend to show a positive attitude towards the effects of FDI. So, previous studies emphasis that the FDI strategies of firms from newly industrialized countries (NICs) are different from the FDI strategies of firms from developed economies. Recently the strategic emerging industries in China are attractive for foreign investors. Many of them are seeking new opportunities for further expansion in China.Korea is one of the top sources of FDI in China. Korean firms are transforming their FDI strategies in China. Therefore, as one of the typical group in the world, the NICs-based firms will become important cooperators of Chinese firms.The main objective of this thesis is to examine the influence of NICs-based firms FDI, how they contribute and impact to the Chinese economy. Also, as the Global warming and resources problem is one of the most serious world economic issues, Chinese government instructed the strategic emerging industries. One of them, Photovoltaic industry is emerged as one of the most rapidly growing renewable sources of electricity.China is the largest solar photovoltaic cell producer in the world, with more than one third of worldwide production in2010, exporting more than95percent of what it produces. This thesis refers to understand the drivers of this success and its limits, with a particular emphasis on the role of technology transfers and innovation by FDI and investigate how Korea Photovoltaic firms, as a one of NICs-based firms, take part in Chinese PV industry as a competitor while a cooperator.As a result, this thesis has found that Korean firms’ investment will inflows into photovoltaic industries increase greatly as the government of China started to emphasize the importance of strategic emerging industries. However, various concerns are raised on FDI of Photovoltaic industry in China by both Chinese side and foreign investors’side.