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Expansion Strategy for Main Industries into the Pearl River Delta Region of China

Author Cho chul et al. Date 2019.12.16 Page

This study is designed to foster a greater understanding of the geopolitical importance of the Pearl River Delta, which encompasses the cities of Guangdong, Hong Kong, Macau in the Greater Bay Area region. It also seeks roles for Korean firms in upgrading in the quality of Chinese industry and capturing emerging opportunities to enter the domestic market in China. This research consists of two volumes. Volume I analyzes economic conditions, industrial policies, industrial structure, corporate trends, and market trends in the three regions of the Pearl River Delta. It also describes the region’s trade structure and identifies favorable directions for the advancement of both Korean and Chinese companies.

Volume 2 comprises an analysis of national territory development strategies, logistics and transportation in the Pearl River Delta area. Through an analysis of transportation infrastructure and logistics in the eastern part of the country, we provide basic data on Korean companies’ penetration into the Pearl River Delta of China. This region is likely to develop into one of three major economic blocs under Xi Jinping, the others being the existing Yangtze River Delta and Jingjinji regions. Chinese president Xi Jinping has a grand vision, called the Greater Bay Area Plan, to transform the south coast of China into an integrated cradle of innovation that will help lead the country into a new era of prosperity.

This results of this study carry three policy implications related to strategies for entering China.

First, we can find a way to link Korea’s New Southern Policy with China’s One Belt, One Road Strategy. Second, we can expand programs aimed at attracting investment between Chinese and Korean companies. The U.S.-China trade friction has made it difficult for China to export its products to the United States. Chinese companies, which have accumulated considerable technology in manufacturing, may consider investing in Korea as a bypass for U.S. exports. Third, firms can consider entering the Chinese market using the CEPA. Hong Kong and China have continued to expand the scope of liberalization since signing the agreement in 2003. Macau also signed a CEPA with China in 2003 and continues to expand its scope of openness in trade and investment. Korean companies should look for ways to make good use of Hong Kong and Macau, which are their key points of entry into China.