After establishing diplomatic ties between Korea and China, they have rapidly achieved bilateral trades, investments, expansion of economic cooperation. In particular, export to China have significantly increased where 24.2% out of the total export volume of Korea in 2011 constituted export to China. However, it is necessary to enter into a Free Trade Agreement(FTA) with China for a more stabilized expansion of trade between the two countries. Through Korea-China FTA, Korea will be able to secure a stable share in its largest export market and also result in maximizing its economic benefits by dominating the future's largest consumer market well in advance.
However, with the suggestion that the effects of reducing tariffs may be less than it was estimated due to the recent changes in the trade structure between Korea and China, the removal of non-tariff barriers have become an important issue to be discussed with respect to the Korea-China FTA.
As a result, this study investigates and analyzes detailed cases where Korean companies have struggled with respect to non-tariff barriers imposed by China while recognizing the issue that the resulting effects from removing non-tariff barriers during negotiation talks for the Korea-China FTA is as important as the economic effects gained from the elimination of tariffs. Upon investigating the relevant issues, non-tariff barriers relating to customs clearance were raised the most by Korean companies and issues such as technical barriers, transparency and issues relating to processing trade, in such order, were considered to be the issues most concerning Korean companies. In particular, it was found that there was a discrepancy in the implementation of institutions and the application of law by region in certain cases. Therefore, it is necessary to prepare a systematic device to remove various non-tariff barriers imposed by China during negotiations for the Korea-China FTA.

The labor environment in China has been rapidly changing lately: wages are rising fast, and labor disputes have become frequent, while the country’s labor laws are becoming increasingly stringent. Coupled with a short supply of potential workers, the difficulties of managing South Korean companies operating in China have become more and more challenging in recent years. 
With the rapidly changing Chinese labor environment in the background, this research reviewed the changing labor environment in the Bohai Economic Rim, the top investment area for South Korean companies, and analyzed those causes that triggered such changes in the first place. This research also came up with some implications for the South Korean companies, as well as South Korean government by conducting a case study on the impact of the changing labor environment on the South Korean companies operating in the area. For an efficient analysis, this study employed a diverse array of research methods, including literature research, statistical analysis, and empirical analysis, as well as enterprise case studies along with field trip to the sites.
After an analysis on the changing labor environment in the Bohai Economic Rim, the study found that the minimum wage in the area rose rapidly beginning 2009, with an average yearly increase of 17.6% from 2009 to 2012. What is notable in the trend is the narrowing disparity among the minimum wages within the province. A review of the average wage, an index that shows the actual income level of workers, found that the average wage in the Bohai Economic Rim has increased since 2006. While the minimum wage was set at the same level across the key cities of the province, the average wage varied depending on the city. More stringent labor laws are likewise beginning to be enforced: starting from the New Employment Contract Law implemented in January 2008, to the Social Insurance Law most recently, China is strengthening its legal apparatus to protect the rights of workers in the labor-management relations.
The causes of such changes in the country’s labor environment include: changes in the demographic structure, depletion of surplus labors in the rural area, changes in the industrial structure, improvement in the general education level, rising prices and changes in the governmental policies. Among those causes, the governmental policies and rising prices were identified as the most significant factors behind the wage hike and the short supply of workforce. While changes in the minimum wage were driven by governmental policies, the rise in average wage level corresponded to rising prices. With regard to the average wage level, population and industrial structure along with the rising prices were also significant factors. A field study on the enterprise cases shows that almost all of the South Korean companies operating in the Bohai Economic Rim are struggling to keep up their management due to rapid wage hike and short supply of workforce. With rising awareness of their rights, an increasing number of workers are demanding wage hike, while the turnover rate of factory workers is rising as well. Adding headache to the already difficult labor management of the South Korean companies operating in the region is the legislation of the New Labor Contract Law, which prevents arbitrary dismissal of workers. Companies are witnessing the deteriorating work attitude and decreasing productivity level among their workers in the wake of the legislation.
To adapt itself to the changing labor environment, companies are reducing wages by reducing the number of indirect workers who are not put into assembly line directly, as well as sojourning employees, while actively trying to tackle the short supply of labor by relying on employment agencies, community centers or correctional facilities. Some even recruit workers by training them directly through close partnership with local occupational schools. In addition, they are striving to lower the turnover rate while raising labor productivity by introducing performance-based compensation and performance-related pay per task. Mechanization and automation of production facilities as well as outsourcing to local companies were also preferred measures by some companies to fight against the wage hike and short labor supply. Meanwhile some companies were not working on any countermeasures at all.
By conducting the aforementioned analyses, this research proposed the following countermeasures for the companies. First, increase productivity. With the wage level of China rising rapidly, South Korean companies operating in China are best advised to improve productivity and maximize the added values of its products. Second, increase outsourcing. Values should be created in such areas as planning, design, R&D and management, while the company’s non-core activities should be outsourced. Third, recalibrate the personnel management system. A fair and transparent performance-based compensation and promotion system as well as a responsible and transparent management should be in place, while it is also required to build up and capitalize on the public assembly. Fourth, develop the domestic market. The labor-intensive industry capitalizing on the low wage level has hit the ceiling now. As the Chinese government is actively seeking to expand the country’s domestic market, South Korean companies are best advised to turn their eyes to the domestic market. Fifth, relocate the manufacturing bases. South Korean companies may need to diversify their production bases by advancing to the mid- and western China, Southeast Asia and even back to South Korea. 
The government support is also urgently required. First of all, financial support to small businesses should be increased. Even many small businesses with highly developed competitive edge are having difficulties in conducting timely investments on their production facilities due to inadequate financial resources. Financial line-up to those companies should be extended. Next, the South Korean government should help them break into China’s domestic market. Small businesses are having difficulties breaking into the domestic market despite its rapid growth, making it necessary to provide government-level support, such as assistance to the development of distribution network and share of market information. The government should also enhance its support to those companies that are u-turning to South Korea. In addition, provision of legal support on the bankruptcy procedure, as well as hosting of investment road shows by South Korean local governments to attract them back to South Korea is also required.

 China is enthusiastically pushing forward the urbanization that will effectively expand  the development demand and domestic market. Thus, a wide range of urban development projects are underway across the country on the basis of the cooperation with foreign countries. McKinsey Global Institute (MGI) forecasts that the urban population in China will increase by 17 million every year until 2030 and the urban population increased will reach a total of 300 million until then. To prepare the living space for them and the infrastructure for the production/distribution/consumption of goods and services, the development demand and domestic market are expected to expand, accordingly. Currently each province in China pushes forward a wide range of urban development projects that include building infrastructure, housing construction, and building infrastructure in rural areas and small and medium sized cities, positively utilizing foreign capital, technology and ideas.
 However, Korea, despite its rich experience in urban development and overseas’ construction projects, does not effectively preoccupy the rapidly growing urban development demand in China. Korea’s inroad into the urban development in China will provide the new opportunities of market entry to the companies directly related to urban development such as construction, IT and environment related companies and other indirectly related companies such as the companies related to distribution, health care and culture. Thus, it is worthwhile to utilize Korean companies’ participation in the urban development projects in China, which will provide a wide range of opportunities for Korean companies in various fields, as the strategies for breaking into the domestic markets in China.
This study seeks after the measures to effectively support Korean companies’ entering the Chinese market through the case study of the foreign companies with the presence in China at the level of basic research on the urban development in China which have been seldom dealt with in the previous studies. Furthermore, the study has categorized the types of inroad into G-G based inroad and private companies’ inroad.
The research results demonstrate that there is a need for the government to make long term efforts to develop cooperative models for the urban development in China and to build G-G based cooperative governance, and to diversify the supports for the companies with the presences in China. Particularly, creating the opportunities for personal exchange, establishing dedicated bodies that support the inroad, aggressive PR support, and building and providing integrated DB by considering the nature of the urban development for which human network is essential are needed. Furthermore the discussions to improve the institutional barriers and inequality issues during Korea-China FTA negotiation are needed.

The service concessions in the China-Hong Kong CEPA have turned out to be unprecedentedly wide and progressive, as it has been negotiated annually which deepened the level of openness after its initial conclusion in 2003. An in-depth analysis of the China-Hong Kong CEPA (Closer Economic Partnership Arrangement) is necessary for Korea to set up proper strategies for Korea-China FTA (KCFTA) service negotiations. We can identify China’s strategies and the upper limit of opening in the services sectors through an examination of service concessions in the China-Hong Kong CEPA. This study attempts to analyze China’s service concessions in every trade liberalization agreement China has signed, from GATS to China-Hong Kong CEPA service concessions, in order to draw out implications for the KCFTA service negotiations.
China asserts that the high level of service market opening in the CEPA stems from the special relationship between China and Hong Kong, and is not applicable to FTA negotiations with other countries. However, service concessions in the Early Harvest Programs (EHP) of the China-Taiwan Economic Cooperation Framework Agreement (ECFA) contains some concessions of levels of service opening similar to the CEPA. Taiwan, unlike Hong Kong, is recognized as a sovereign state in international society and treated as a formal member of WTO. Therefore, China’s level of service opening with other countries can go further in certain service sectors, compared to levels seen in its negotiations with Taiwan.
The CEPA also has some implications for KCFTA negotiations in terms of the framework of the agreement. First, China and Hong Kong have enriched the content of CEPA with continued liberalization through annual negotiations since 2004. Korea and China will also be able to broaden the range of service liberalization through regular negotiations in the KCFTA framework, just as in the CEPA. Second, the CEPA contains liberalization measures, the so-called Guangdong pilot basis measures, which are tested in an adjacent province, and will be expanded to other regions after they prove to be successful in the Guangdong area.
This study also attempts to suggest the appropriate modality of the service negotiation by presenting four types of concessions in terms of the expected level of service opening in the KCFTA; 1) going slightly further with WTO concessions by inserting some service sectors or by increasing the existing level of opening in already open sectors; 2) as shown in the China-Hong Kong CEPA, a new concession list could be made under the new service sector classification which is a modified form of the WTO service classification; 3) include new chapters for important service sectors such as finance, telecommunication, audio-visual coproduction, e-commerce, government procurement etc. just like in the Korea-US FTA, Korea-Singapore FTA and Korea-India CEPA(Comprehensive Economic Partnership Agreement); 4) complete negative list. Considering China’s cautious approach to opening its service market through FTAs, the best option would be to mix types 2) and 3).
Finally, this study suggests service sectors that may be included in the KCFTA service negotiation by analyzing the DDA, DDA plus, and CEPA concessions. The number of service sectors listed in China's FTA service concessions are maintained at 62-67 items. It seems that China wants to maintain the number of listed sectors at this level with respect to the FTAs. Therefore, the key to successful negotiation results is to keep the number of listed sectors at a level similar to China's other FTAs, and to select the core sectors that can magnify the result of market openings at the same time.
There are service sectors in DDA, DDA plus and CEPA concessions that China may be more willing to open. These sectors are as follows: the professional services such as Legal, Architecture, Engineering, Integrated engineering, Urban planning, Medical and dental, Computer and Related Services, R&D, Real Estate, Market research, Management consulting, personnel placement and supply, scientific/technical consulting, Building-cleaning, Printing etc. In addition, the following sectors are also listed in DDA, DDA plus, and CEPA concessions: Construction and related engineering services, Distribution services, Environmental services, Banking and Other Financial Services, Health and social services, Tourism and travel service; Recreational, Cultural and sporting services; Maritime transport services, Air transport services, and Road transport services.
The new sectors only included in CEPA concessions are promising sectors when considering the expanding culture and silver industry market in China, the rising level of consumption and aging society. These sectors include audio-visual co-production, and health and social services related to the Welfare services delivered through residential institutions to old persons and the handicapped.

Russian Overseas Direct Investment(ODI) has been increasing rapidly in recent years. It has been on an upward trend since the early 2000s and rose more steeply from the mid 2000s. The total amount of Russian ODI in stock was 362.1 billion dollars at year-end 2011, or 15th in the world. The volume grew more than 18 times that of 2000.
However, Russia’s direct investment toward South Korea is rather trivial. Until the end of 2011 Russia invested 54.57 million dollars (in stock), which is a mere 3% of the amount of Korea’s direct investment toward Russia. This implies that Korea is not yet an attractive investment destination among Russians. In fact, Russian direct investment to Korea is important because it brings not only economic benefits but also regional security, along with stability and peace in the Korean peninsula and in Northeast Asia with strong support from Russia. Therefore, investment cooperation between Korea and Russia needs to be strengthened in the future. Of course, both Korean direct investment toward Russia and Russian direct investment toward Korea should proceed in parallel.
The purpose of this study is to review the current status and motivations of Russian overseas direct investment at different levels; namely country, region and industry base. After an in-depth analysis of Russian overseas direct investment, the study will provide specific measures for attracting and expanding Russian direct investment to South Korea.
The study focuses on patterns and recent condition of the increasing Russian ODI since 2000, and Korea’s investment promotion policy toward Russia and its achievements. The study is conducted with many methods including document research, statistical analysis, survey on Russian businesses and experts interviews.  
The study consists of five chapters. In the second chapter following  introduction, theoretical and statistical analyses on Russian ODI will be presented, with Russian direct investment since 2000 being the main focus. The study also attempts to demonstrate the main features of Russian overseas direct investment by highlighting Russia’s motives for overseas direct investment. After reviewing changes and trends of Russian ODI, the authors selected regions and industries of greatest interest to Russian investors and added useful information for Korea’s investment promotion policy.
In chapter three, motivations and strategies of Russian ODI is analyzed. The authors carried out a survey of Russian businesses about their sectors and regions of interest for investment and possibilities for investment in Korea. With the result of the survey, we suggest promising investment sectors for Russian investors and desirable directions for Korea’s investment policy toward Russia.
In chapter four, Korea’s current foreign direct investment and its major features are reviewed. Then, the focus is narrowed to Russia’s recent direct investment trends in Korea, and the reasons for the lack of progress in Russia’s direct investment in Korea is discussed. Based on these, Korea’s investment promotion policy is evaluated.  
In the last chapter, attractive sectors for Russian investors and measures for increasing Russia’s investment to Korea is suggested.
According to our study, Russia’s defense industry holds promising investment potential. It contains comparatively high technological competitiveness among Russian businesses, and with its abundant capital resources, foreign direct investment is likely to result in success. Agreements at the government level should precede any technical and investment cooperation with Russia’s defense industry, as it requires approvals from technology-related government agencies in Russia.
Second, investment promotion should proceed through market oriented joint-ventures. Korea’s investment promotion agencies such as Invest Korea should sort out particular sectors with prominent market share effects in Russia, in order to develop a business model that will accelerate mutual investment between the Korean and Russian industries. Such a business model could be implemented in prospective investment counseling programs for businesses of both countries, and the launch of such programs needs to be actively considered.
Third, investment promotion targeted at Russia’s energy sector is promising. Korea needs to participate in Russia’s resource development projects to establish cooperative ties between the energy sectors. This may open the way for further joint investment cooperation between the businesses of both countries in a third-party energy resource development. Moreover, energy efficiency technology of Russia’s leading energy enterprises can provide opportunities to launch joint investment projects in Korea. 
Fourth, investment promotion targeted at the research development and education sector. In case of the medical sector, Korea may convert Russia’s science technology for commercialization, in the form of medical devices. Such a strategy fits in the broader objective of establishing a Korea-Russia joint enterprise for global markets in the territories of Korea. In case of information and communication sector, leading enterprises of both countries could consider reaching an agreement for strategic technology partnerships and joint investment cooperation. In case of the education sector, investment promotion through increased cooperation in the higher education and science technology should be actively considered.
As such, in order to expand Russia’s foreign direct investment in each of these respective sectors, the Republic of Korea should place more effort in the following areas.
First, mutual cooperation with Russia’s government agencies needs to be expanded. Building cooperation channels to promote Russia’s foreign direct investment to Korea necessitates omnidirectional contact with the Ministry of Economic Development, the Agency for Export Credit and Investment Insurance and the Chamber of Commerce and Industry of the Russian Federation. Regarding such processes it would be better for the Korean government and related agencies to replace the current individual channels of contact with the so-called ‘control towers’ that would allow more comprehensive and systematic control for continuous and consistent policy for investment promotion to Russia.
Second, the present investment promotion system should be modified through increased interests on all of Russia’s regions. It would be necessary to strongly reinforce investment promotion affairs conducted at KOTRA. Concurrently it would be important to develop ‘Korea-Russia investment cooperation MOU’ signed in 2011 between Invest Korea and Moscow Investment Agency, to provide expanded investment opportunities and information exchange.
Third, Korea’s economic success should be more vigorously advertised to Russian businesses. It would be rational to promote Korea’s image as a developed country through diverse exhibitions, while modifying incorrect stereotypes via published works containing comparative country analysis. In particular, it would be vital to effectively employ the internet and mass media outlets, while providing the abundant information in the Russian language through the embassy, consulates, business related institutions, and conferences.
Fourth, Russian businesses require more active provision of information on investment to Korea. Korea should expand channels of interaction among business people of both countries, and reinforce cooperation with the Chamber of Commerce and Industries of the Russian Federation and Moscow Entrepreneurs’ Association. In addition, it is necessary to further activate the annual Korea-Russian Business Forum hosted by the Korea Chamber of Commerce and Industries, and the annual Korea-Russia Business Dialogue hosted by the Korea International Trade Association, and setting as the main agenda Korea’s investment promotion issues.
Fifth, cases of successful Russian investment to Korea need to be created. A single case of Russia’s large scale project successfully executed in Korea would motivate the Russian Federation to spread the information concerning Korea’s investment environment.
Sixth, joint investment with third parties should be more aggressively sought. For instance, merging Korea’s technical skills and Russia’s capital for a joint entry to Russia’s neighboring CIS region and other former allies of the Soviet era would be an opportunity to fully implement Russia’s resources while reducing potential risks.  
Lastly, Korea and Russia need to establish a joint investment fund to promote further investment. It could be a utilization of the already established ‘global new growth engine fund’ between Korea and Russia, or creation of a similar joint investment fund.