Foreign investment in Korea is on the rise

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Foreign investment in Korea is on the rise

Foreign direct investment (FDI) in Korea is recovering, data from the Ministry of Trade, Industry and Energy showed on Sunday.

Through the third quarter of this year, FDI amounted to $13.27 billion, down 10.5 percent compared with a the same period last year, but recovering from a 30 percent drop in the first quarter of this year.

The trade ministry said FDI during the third quarter alone, of $4.4 billion, was in line with $4.48 billion during third quarter of last year.

“Given that the rise last year was due to big cross-border merger and acquisition in September, the third quarter’s numbers are quite solid,” the ministry said.

FDI during the first quarter was $3.56 billion and the second quarter was $5.32 billion.

FDI on actual arrival basis was $10.8 billion won through the third quarter of this year, up 9.0 percent year-on-year, breaking the psychologically significant $10 billion mark.

“The significant $10 billion mark was broken in the shortest period ever this year, and I think this will signify rising foreign interest in Korea-related investment to other foreign investors who are interested in Korea” said Choo So-ryeong, a trade ministry official.

This was also more than the five-year average of $10.3 billion on a reported basis and $6.31 billion on actual arrival basis. The increase was due to a rise in service and construction related investments.

The ministry said it was also seeing the plans for investment reported by foreign investors taking place “smoothly and according to plans.”

Looking into segments, the service industry saw $8.9 billion investments through the third quarter, up 3.5 percent year-on-year, led by Chinese Anbang Insurance Group’s $1 billion buyout of Tong Yang Life Insurance.

Construction sector related investments spiked by 812.2 percent to $1.42 billion.

But manufacturing sector saw a sharp decline in FDI, to $2.95 billion, down 51.3 percent year-on-year, due mostly to last year’s one-off spike in FDI from big M&A deals.

However, FDI in the manufacturing sector was still on the rise looking at this year’s trends, from $390 million in the first quarter of this year to $1.85 billion in the third quarter.

Investments from China increased significantly, with the FDI from China amounting $1.53 billion, up 48 percent year-on-year.

Investment from Japan declined 27 percent to $1.2 billion, while the U.S. fell 4.0 percent to $2.98 billion.

BY PARK JUNG-YOUN [park.jungyoun@joongang.co.kr]
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