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An Analysis of New Trends and Underlying Causes in South Korea’s Direct Investment in China

  • Journal of Asia-Pacific Studies
  • Abbr : JAPS
  • 2024, 31(4), pp.329-349
  • DOI : 10.18107/japs.2024.31.4.011
  • Publisher : Institute of Global Affairs
  • Research Area : Social Science > Social Science in general
  • Received : November 21, 2024
  • Accepted : December 10, 2024
  • Published : December 30, 2024

CHUNJI XUAN 1

1길림대학교 동북아연구센터, 동북아학원

Accredited

ABSTRACT

This paper analyzes the new trends and underlying factors in South Korea’s direct investment in China. South Korean investment in China has undergone five stages, shifting from early labor-intensive industries to high-tech manufacturing and the semiconductor sector. In recent years, China’s rising industrial competitiveness has led to a gradual reduction in South Korean investment outside the semiconductor sector, while U.S.-China strategic competition and U.S. technology restrictions have driven a significant decline in South Korean semiconductor investment in China. Despite these challenges, China’s domestic market demand and the interdependent China-South Korea supply chains remain key motivators for South Korean firms’ direct investment in China. This paper suggests that China further open its markets, improve the business environment, promote high-tech cooperation with South Korea, and deepen China-South Korea economic and trade relations through regional economic agreements.

Citation status

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