and Entry Strateg
y
In sung Park
Th e p u rp ose of this stu dy is to investigate and an alyze the structure an d investm ent situ ation of Chin a' s con stru ction m arket . Korea is w ell kn ow n to h av e th e b est location al condition an d exp eriences of exch an ge w ith Chin a throu gh a long historical p eriod . Bu t Korea h as still n ot u sed this condition effectively .
Korea' s entry an d op en u p strategies th at target on th e China' s con stru ction m arket still are in early stage, and Korea h as accu m u lated th e exp eriences of trial and error . It is ackn ow led ged th at th e du llness of entry to Chin a' s con stru ction m arket is du e to th e in su fficient u nd erstan din g of the local investm ent circu m stances an d insu fficient en d eavor to ad apt to th e m arket. Therefore, it is n ecessary to an alyze the characters an d investm ent situ ation of Chin a' s con stru ction m arket, an d m ake th e entry strategy.
Based on the research qu estions and p urp ose, this stu dy
consid ers and an alyzes th e stru ctu re and th e characteristics of China' s construction m arket, an d su ggests th e entry strategy . With th e exception of th e introduction (Ch ap ter 1), this stu dy is com p osed of five chap ters as follow s;
Ch apter 2, consid ers an d an alyzes the ch aracteristics, structure, and im p ortant cu rrent situ ation of China' s construction m arket . Before econ om ic reform , in the p eriod of plann ed econom ic system , the construction investm ent item s w ere d ecid ed by high-level governm ent organization an d th e execu tive m em bers of adm inistration . Th e d esign an d con stru ction w orks of investm ent item s w ere selected and distribu ted by th e governm ent. Bu t since 1980' s, th e im p lem ent process of investm ent item s h as been con du cted in th e m arket econom y system . In th e p reviou s p lann ed econ om ic system , the ord erer an d th e concerned su bjects of m easurem ent investigation, equ ip m ent sup ply, and architectu ral construction an d establishm ent su bjects only sh ared a role in th e division of w ork fram e. Bu t after reform , th eir individu al p ositions are d ecid ed by m arket according to profits. H ow ever, habitu al practice and behavior of protectionism in th e previou s plann ed econ om ic system still rem ain in fact.
Ch apter 3, in ord er to un d erstan d th e backgrou n d of form ation an d stru ctu ral context of Chin ese u rban real estate m arket, analyzes th e com m ercialization of th e lan d u se rights an d hou sing reform . In ad dition, it an alyzes th e cu rrent Chinese u rban real estate m arket . The role of governm ent du rin g the reform p rocess h as been ch an ged to a m arket regu lator from a absolute p ow er . An d the transfer of lan d u se rights m akes increases the tax incom e of the m u nicip al governm ent an d urban infrastru ctu re fin ance, therefore th e
condition of th e u rban econ om ics is im p roved a lot . It has h elp ed to m ake a foun d ation of the lan d u se right m arket . It resu lts that the adm inistrate fu nction has been a su bstitu te for m arket com p etition in the field of real estate d evelop m ent an d distribution, an d new d esign concept has been ap plied to com m ercial, in du strial, an d resid ential buildin gs. At th e sam e tim e, as the h ou sin g reform h as been goin g on, th e pu rch asing p attern of hou sing h as been chan ged . Th e collective buyin g p attern by w orkin g u nit has been d ecreasing, an d on th e other h an d, the in dividu al buyin g p attern has been increasin g.
Ch apter 4, consid ers an d an alyzes the law and regulations w hich are related to construction an d u rban real estate m arket of Chin a, su ch as th e law of tend er system , th e law on th e sales of com m ercial h ou sing, th e regu lation on rem oving u rban architectural structu re, th e p erm ission license of con stru ction, an d th e regu lation s concern ed w ith placin g an d receivin g an ord er, su bcontractin g an d su p ervisin g.
Ch apter 5, con sid ers an d prosp ects th e ch an ge in th e investm ent circu m stances an d th e p rom ising field s of Chin a' s construction m arket after Chin a' s joinin g WTO . If Chin a' s econom y cou ld su stain a rap id grow th trend s as now ad ays after starting reform , th e d em an d s in con stru ction p art w ill be increased an d th e d evelopm ent sp eed also w ill be accelerated . Recently w e are attachin g im p ortance to th e effects an d the p rosp ect of China "s joining WTO an d h oldin g th e 2008 Olym pic gam es in Beijin g, w hich m ean n ot only th e asp ect of external grow th of con stru ction m arket but also abolition of th e entry barriers of th e d om estic m arket w ith th e intern ationalization and op enin g of Chin a. Of course, it still need s som e tim es that w e could get p erfect effects of m arket op enin g and su bstantial benefits.
Ch apter 6, analyzes th e p roblem in entry exp erience and strategy of th e Korean construction com p anies to Chin a' s construction m arket, an d su ggests futu re direction and strategies.
The entry strategy to Chin a' s con stru ction m arket is su m m arized as the establishm ent an d m an agem ent of a joint n etw ork w ith China' s con stru ction m arket, creation of a new crevice m arket . We n eed to try to grasp th e Chinese m an agem ent p attern an d exp eriences on th e actu al field s of plannin g, receivin g ord ers, su bcontractin g, an d con stru ction m an agem ent .