At the end of the 1980s, Korea's overseas direct investment increased rapidly as it had been achieving surpluses in the balance of payments. Korean firms move overseas for various reasons such as securing overseas markets and procuring raw materials at lower prices in foreign countries. Degree of internal reforms, abundance of skilled labor, investment promoting policies, and ethnic ties in Chinese provines are crucial in attracting Korean FDI in this regard. However, their main objective is to reduce production costs.
This paper reviews the recent trends in foreign direct investment in China and its accomplishments. Furthermore, several desirable strategies and policy implications for future Korean overseas investment are proposed.