Chinese and South Korean investment in Poland: a comparative study

Abstract

The paper is a comparative study on Chinese and South Korean foreign direct investment (FDI) in Poland. The comparison is presented in the broader context of Poland’s systemic transformation and the accession to the European Union, and comprises the FDI inflows into Poland. The characteristics of Chinese and South Korean companies operating in Poland include their entry strategies and motives of investment. A special attention is paid to linkages between FDI trends and trade, given a huge Poland’s trade deficit with Asian countries. The paper also analyses the incentives used by the Polish government and local authorities to increase Poland’s attractiveness as a location for foreign investors, mostly tax preferences in the economic special zones.

Keywords:

• Central and Eastern Europe
• FDI
• investment incentives
• trade imbalance

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Erratum

Notes

Notes

1 The Europe Agreement entered into force on 1 February 1994. Poland has been a full member of the OECD since 22 November 1996.

2 Poland maintained high tariffs on passenger cars (35% MFN duty) and liberalised them under free trade agreements, including the Europe Agreement with the EU, as the last in 2002.

3 Own calculations based on the NBP data.

4 Own calculation based on Comtrade data.

5 Own calculations based on CSO data.

6 The Commission Regulation (EU) No. 651/2014 of 17 June 2014.

7 On 23 July 2013 the Council of Ministers issued 14 regulations introducing amendments to the respective regulations regarding each individual SEZ (Official Journal of 2013, items 968 to 981).

8 The share was calculated upon NBP data on FDI stock in manufacturing sector and Korea Exim Bank on invested amounts in manufacturing sector in Poland, which are not fully compatible.

9 Council Regulation (EC) No 1289/2006 of 25 August 2006.

10 Council Regulation (EC) No 2604/2000 of 27 November 2000.