A Study on the Construction of Enterprise Cities in Korea and Utilization of Chinese Capital: Focused on the Case of the Muan Korea.China International Industrial Complex
Authors:   Asia-Europe Perspective Association, Moon Yong-Ho 
Published: June 2018

Since China executed the reform and open policy in 1978, it has achieved continual economic development by inducing foreign capital on a large scale. In accordance with a big scale trade surplus and foreign capital inducement, etc., foreign exchange reserves of China increased rapidly. However, the issue of economic expenses according to reserving foreign exchange raised. So, the Chinese Government is urging Chinese enterprises to invest abroad from 2000s. Since 2003, the foreign investment of Chinese enterprises is increasing rapidly. The foreign exchange reserves of China reached 2,130 billion dollars as of the end of June, 2009. To reduce the burden of the excessive reserve of foreign exchange, Chinese Government is, actively, encouraging Chinese enterprises to invest abroad. Chinese overseas investment promotion policy was to appoint overseas economic cooperation complexes. As of the end of 2007, 19 complexes were approved and development commenced for the purpose of building 50 complexes in future. Considering the importance of Korean market, Chinese Government approved to build Korea.China International Industrial Complex in Muan, Jeollanam-do and is supporting it positively. Most of overseas economic cooperation complexes designated by Chinese Government for the while were built in underdeveloped countries as a type of resource development. Because investment to the Muan Korea.China International Industrial Complex is the only investment to an advanced country, Chinese government is having much expectation. Accordingly, in this study, this researcher tried to look into the utilization method of Chinese capital through analysis of the Muan Korea.China International Industrial Complex.
The amount of Chinese overseas investment is being steadily increasing but Chinese direct investment to Korea is in the trend of reduction after 2005. Chinese BOE Technology Group and SAIC Motor have acquired Korean Hydis and Ssangyong Motors in 2002 and 2005 but such M&A effect was under expectation. As a result, Chinese investment to Korean manufacturing industry after 2005 became a matter of little concern. It seems Chinese large enterprises tried to acquire technology through M&A and advance into Korean market but its effect was less than expectation due to management and labor issue, culture difference, etc.. So the general Chinese investment to Korea is being decreased.
Considering the point that Chinese investment to Korean manufacturing industry was progressed by M&A method between enterprises for the purpose of acquiring technology, it may invite Chinese enterprises for investment successfully. Because the Muan Korea.China International Industrial Complex may be formed as an industrial community for large scale Chinese enterprises and have the good points that Chinese enterprises may not only acquire technology but also avoid trade barriers. Regarding the fact that the most objects of past acquisition of Korean enterprises by Chinese enterprise were large enterprises, if Chinese large enterprises equipped with fund ability are converted by acquisition method to small and medium enterprises equipped with Korean technology power, Chinese investment to manufacturing industry through M&A may be in prospect. At the point of time that enterprises move in the Muan Korea.China International Industrial Complex, it is expected that Chinese and Korean microscopic economic environment will be better and such main inducement business types as shipbuilding, automotive parts, IT, bio industry, etc. will be generally better in industrial prospect.
China is a country of trade conflicts occupying the 1st of the countries which have raised sues against dumping and sanctions in the world.