Investment in China
South Korean Firms steadily increase its investments in China.
Korea International Trade Association’s (KITA) Beijing Center said on July 26 that the Korean firms’ investment in China (mainly in manufacturing sector and based on the invested money) in the first half of this year reached US$2.84 billion (approximately 3.24 trillion won), a 17.8% increase compared to the same period of last year.
If such a trend continues for the second half of the year, the annual investment is forecasted to reach mid-5 billion dollars, hitting the record high since 2004.
The investment in China has continued to increase for 5 consecutive years since 2011. In 2004, Korea’s foreign investment in China totaled US$6.26 billion. After recording US$5.17 billion in 2005, the investment had steadily declined and barely recorded US$2.44 billion in 2011. The next year, in 2012, the investment in China, however, again took a rise by recording US$3.04 billion, keeping the upward trend recording US$3.06 billion in 2013, US$3.97 billion in 2014, and US$4.04 billion in 2015.
In contrast, the size of investment of Japanese firms in China has been shrinking. It recorded US$7.35 billion and US$7.06 billion in 2012 and 2013, respectively, but it showed a steep decline in 2014 by recording US$4.33 billion. In 2015, the Japanese investment barely recorded US$3.21 billion, becoming less than that of Korean firms’ investment in China as a result.
KITA interpreted such a trend as the move that Japanese firms’ investment in China is shifting its weight to “maintaining the status quo.”’ According to the data compiled by Japanese External Trade Organization (JETRO) early this year, only 38.1% of the Japanese firms operating in China responded that they “will expand the investment in China.”
KITA said, “It is the first time for the will (of the Japanese firms) to expand investments in China to drop to a 40% level.”