중국진출 한국기업의 자금조달과 현지금융[연구보고서2003-09]77~120

During the last decade, Korean enterprises implemented massive capital investments in China not only to gain competitiveness based on cheaper labor costs but also to access huge market potential. The Korean firms in China started their businesses relying almost exclusively on self-financing. Most of the initial capital came from the principal owners and parent companies. As the firms grow, however, the importance of local financing is increased whenever additional investments (post-start-up) for expansion are required. The purpose of this study is to identify institutional constraints of and future opportunities for local financing faced by Korean enterprises in China. This study is the first attempt carried out through surveys and interviews. The major institutional constraint of local financing turns out to be the financial repression governing Chinese financial markets. The critical components of Chinese financial repression policies are regulated interest rates and selective credit policies. The repressed financial markets effectively hinder foreign finns in China from local financial for capital investments. Thus, future Chinese financial liberalization process will mitigate the institutional constraints of foreign finns' local financing. The survey results of this study show that the capital investments of Korean firms in China are financed dominantly by internal sources such as retained earnings and funds from parent companies and principal owners. The local financing of Korean finns in China occupies mere 7.6 percentage of the total financing for capital investments. The loans from Chinese banks are made mostly based on collaterals such as fixed assets and real estates. It is expected in this study that China' s gradual financial opening' after its WTO entry will make local financing of Korean firms in China easier since it allows foreign banks to participate in development of the country's financial markets. One of the most important ingredients in the financial management of Korean finns is to establish long-term relationships with local financial institutions in China. The accumulation of relationships capital can be the best way to eliminate information asymmetries which are more serious between domestic banks and foreign enterprises in an underdeveloped financial market.