After 20 years from the establishment of diplomatic relations between Korea and China in 1992, China became the largest investment destination from as well as the trading partner of Korea. China is the major location of investments not only by large firms but also small and medium-sized enterprises(SMES) in Korea. However, during the recent years the business environments in China have rapidly changed, which poses substantial challenges to Korean SMEs. Hence, we need to better understand the current situation of Korean SMEs'. We select specific region and industry where the Korean SMEs have been operating in China.
The purpose of this study is to suggest implications to both the Korean government and the SMEs which have tried to foster competitiveness, moving beyond production-base building (which mainly utilizes cost advantages), and further to aim at expansion into China’s domestic market. We design this study based on the case studies of Korean manufacturing SMEs located in Jiangsu Province, China.
As a methodological approach, we first define competitive china-FDI enterprises as the enterprises which spent a “reasonably long” period of time in China after the initial investment and which self-assessed that they achieved the expected return. Next, we analyzed the reasons for the location choice (investment in Jiangsu Province), the performance variations, the factors to threaten long-term success for the Korean SMEs in Jiangsu Province. The research had two rounds of field visits between July and September 2011 and the locations included Suzhou, Nanjing, and Wuxi.
Chapter 2 introduces the theoretical background of this study. Chapter 3 examines the status quo for the investments of Korean manufacturing SMEs in Jiangsu Province, and the characteristics of Jiangsu Province as an investment location in comparison with Shandong Province, Zhejiang Province, and Guangdong Province. Chapter 4 illustrates our case studies that consist of labor-intensive, capital-intensive, and knowledge/technology-intensive industries in Jiangsu Province. Chapter 5 discusses how the eclectic model designed by Dunning (1977) is applied to Korean manufacturing SMEs in Jiangsu Province.
Finally, we suggest some implications for the government and the businesses. Korean government is advisable to provide more research service for the Korean SMEs in China, and to continue negotiations with Chinese government in order that the Chinese government should enhance the institutional transparency. As for business, Korean SMEs need to pay more attentions to the localization strategies and the networking with Chinese enterprises. In addition, a complete level of subsidiary autonomy should be guaranteed for further growth in China. Korean SMEs also have to improve human resource management and to actively recruit local employees as sales staffs.
- 한국 중소 제조업체의 중국 장쑤성 진출사례와 시사점
- 노수연; 곽주영
한국 중소 제조업체의 중국 장쑤성 진출사례와 시사점
|Series Title; No||연구자료 / 11-18|
|Subject Country||China(Asia and Pacific)
South Korea(Asia and Pacific)
|Subject||Economy < Direct Investment
Industry and Technology < Manufacturing
|Holding||Korea Institute Economic Policy|