Overseas FDI

South Korea’s overseas direct investment hit an all-time high of US$35.2 billion last year.
South Korea’s overseas direct investment hit an all-time high of US$35.2 billion last year.

 

The Export-Import Bank of Korea announced on April 24 that South Korea’s overseas direct investment hit an all-time high of US$35.2 billion last year.

The amount has continued to increase for 10 years since 2007, starting from US$23.1 billion. However, its direct investment in China fell from US$5.7 billion to US$3.3 billion between 2007 and last year. Specifically, South Korea’s direct investment in China dropped from US$5.2 billion to US$3.2 billion between 2013 and 2014 and totaled US$3 billion and US$3.3 billion in 2015 and last year, respectively.

Meanwhile, its direct investment in the United States totaled US$12.9 billion last year, up 123.6% from three years ago. This can be attributed to M&A for advanced technology and efforts for business expansion in the United States. For instance, Samsung Electronics acquired Harman International Industries for US$8 billion late last year.

South Korean companies’ investment in the U.S. is likely to keep going up with regard to trade protectionism from the country. Samsung Electronics increased its investment in its semiconductor plant in Texas by US$1 billion last year. Hyundai Motor Company announced early this year that it would invest US$3.1 billion in the U.S. for five years to come. LG Electronics is planning to build washing machine manufacturing facilities with an annual production capacity of one million units in Tennessee.

South Korea’s investment in Vietnam almost doubled from US$1.2 billion to US$2.3 billion between 2013 and last year, too. This is because a large number of small and medium-sized firms entered the market to benefit from the country’s low labor costs and high economic growth rate amounting to 6% or so a year.

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