New foreign investment reaches record 20 billion dollarsForeign direct investment (FDI) to Korea reached a record high of more than $20 billion this year.
The FDI registered with the government this year recorded $20.43 billion as of Tuesday, the Ministry of Trade, Industry and Energy announced on Wednesday. The previous record was $19 billion in 2014. On Tuesday, the actual amount of FDI arrived in Korea this year stood at the record high level of $15.19 billion.
“Although the FDI inflow was low in the first half, the volume surged at a fast pace in the second half thanks to the Korea-China FTA and follow-up measures of business cooperation projects made during President Park Geun-hye’s overseas trips,” Kim Young-sam, director general of the investment policy division at the Trade Ministry, said at a press conference on Wednesday.
The volume of FDI registered with the government and the actual amount that arrived in the country both surged this year. But the FDI which arrived rose at a faster pace by 28.6 percent, while the registered FDI increased 11.2 percent year on year. There were new deals made in expectations of the Korea-China FTA, where foreign businesses aim to enter or expand in Korea as a hub to China.
Sumitomo Seika Chemicals sealed a deal worth $50 million this year to build a production line that makes high absorbable resin, a material for baby diapers. The tariff on the material will be eliminated within the next 10 years.
EMP Belstar, a U.S.-based private investment firm, put $100 million on local logistics centers, assuming that the bilateral FTA with China will boost storage and shipping of frozen or fresh products.
By region, the United States invested $5.45 billion this year, up 56.6 percent year on year, and China’s investment rose 70.6 percent to $1.97 billion, mostly in IT and logistics. The Middle East made deals worth $1.28 billion, up 526 percent year on year, including the Posco E&C and recent Ssangyong E&C deals.
EU members and Japan each invested about $3.8 billion and $1.61 billion, respectively, by acquiring shares of Korean companies.
However, their deals in dollar value shrank compared to last year due to the weakening of their currencies against the U.S. dollar.
Large-size deals took place in construction and heavy industries. The Saudi Arabia Public Investment Fund acquired Posco E&C shares. Saudi Arabian chemical company Sabic invested $850 million in the SK Nexlene Company, a joint venture with SK Global Chemical, in August.
BY KIM JI-YOON [firstname.lastname@example.org]
with the Korea JoongAng Daily
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