남북 및 북중간 무역 및 투자현황과 과제

Study on Trade and FDI among South Korea, North Korea and China

The objective of this study is to study and analyze the trade and FDI among three countries and its implications on economy in three countries; South Korea, North Korea and China. The major findings of the research are in the following; First, the trade volume between South and North Korea has continuously expanded particularly since 2003. However, the trade between the two Koreas in 2009 is found to have decreased by 7.8 percent compared to the previous year because of deterioration of relation between two countries. It's certain that the future of trade depends on the change of political situation. Second, the trade volume between North Korea and China in 2009 decreased significantly 38.6 percent compared to the previous year. But, China is a major trading partner of North Korea and accounts for a great part of total trade in North Korea. There is relatively a good outlook for trade between two countries because of stagnation in trade between South Korea and North Korea.Third, China firms have increased their foreign direct investments in recent years and seems to have a very enlargement strategy of FDI(outflow) in the future. Also, China has the development plan for northeast area of China, which is adjacent to North Korea. North Korea must make the best use of this opportunity for the vitalization of north Korean economy. Fourth, the business in the Gaesung Industrial Complex is one of the core project in the inter-Korean business. South Korea built and continues to pay for the zone in order to use cheap North Korean labor. Currently, 121 South Korean factories operate in the complex employing about 43,000 North Korean workers. But, because of the Cheonan boat incident, the outlook on this project is uncertain. It depends on the change of political situation.