A Comparative Study On Inward Foreign Direct Investment Between China And Korea

The world has been changing rapidly and getting closer under the phenomenon of globalization. Global integrations of economies are occurred with increasing interdependence between economic regionsForeign direct investment is not merely capital move but move with the production factors such as technology, labor, management capabilities. Thus foreign direct investment promotes regional economic growth and the expansion of opportunities of employment, and it can be considered the policy means which can contribute to the sophistication of industrial structure with the introduction of advanced technology.Also, it is conducive to the improvement of the current account through the export promotion, import substitution and etc.. And it is also used as a way to respond to foreign trade friction. In this way, it has a significant influence on the political, social sectors as well as mutual economic sector between the investing country and investment-attracting country, furthermore great influence on economy. So, the policy of FDI is affected by the foreign investment environment and economic policy, determining the feasible goal and means by analyzing the two environments. The purpose of government trying to promote the policy of attracting FDI is ultimately in the economic development with the help of industrial policy, such as increased employment, stable currency, sophistication of industrial structure, increased financial leverage.Recent global economy has gone through the fast structural changes such as increased competition and interdependence, blocking, liberalization. In such a structural change, countries are now significantly recognizing the importance of FDI for the stability and development of its own economy through the struggle for attracting FDI.This paper is intended to identify the trend of FDI policies in China and Korea along with currently proceeding core policies and FDI inflows analyzing the role and importance of FDI in both countries in a long term perspective. Furthermore, it is also intended to make several suggestions on the policies for FDI in terms of what types of FDI are required to maintain for contributing to the economic growth.