Last year, foreign direct investment (FDI) in Korea hit an all-time high of US$22.94 billion. The FDI exceeded US$20 billion for the third consecutive year.
The Ministry of Trade, Industry and Energy (MOCIE) said on January 3 that foreign direct investment (FDI) in Korea ran to US$22.94 billion last year, up 7.7% from the previous year.
In the first three quarters of last year, the figure dipped 9.7% compared to the same quarter of the previous year. However, it turned to a rise by chalking up a record high of US$9.36 billion in the fourth quarter. In the fourth quarter, FDI in the manufacturing sector such as chemicals and electrical and electronic products grew 278.7% and investment in Korea by the EU, Middle East and ASEAN surged.
Last year, FDI in the manufacturing industry swelled 41.2% to US$7.25 billion, while FDI in the service industry inched down 0.3% to US$15.46 billion. FDI in the manufacturing sector climbed in chemical and metal products, organic light emitting diodes (OLEDs) and secondary cell batteries as rising oil prices made a recovery in the price competitiveness of petroleum products. FDI grew 101.0% in the chemical industry, 42.9% in the electric and electronic industry, 149.5% in the metal industry and 32.9% for the drug industry. FDI in non-metals, on the other hand, sank 44.0% and FDI in transport machinery 1.4%.
In addition, FDI in the manufacturing industry exceeded US$7 billion in three years since reaching US$7.65 billion in 2014. The Ministry of Trade, Industry and Energy explained that FDI related to the fourth industrial revolution such as auto parts, drones, new materials, secondary cell batteries and robots are getting into full swing.
FDI in the service industry declined overall, but DFI in real estate soared 88.0 percent, FDI in wholesale and retail, 36.2 percent, and FDI in business services, 5.9 percent. However, FDI in finance and insurance and transportation and warehousing shrank 56.7% and 12.0%, respectively which contributed to cutting down on the overall FDI figure. FDI in the service industry has steadily risen to US$11.19 billion in 2014 and US$ 14.73 billion in 2015, US$15.51 billion in 2016 to and to US$15.46 billion in 2017. In the service industry, a lot of FDI was made in areas where advanced foreign technology was mixed with Korea’s great IT infrastructure such as big data, fintech and mobile platforms, the ministry said.
By country, the United States’ FDI in Korea inflated 21.5 percent to US$4.71 billion, while Japan 47.9 percent to US$1.84 billion. But the EU’s FDI in Korea slid 4.5 percent to US$7.06 billion, while China’s FDI in Korea fell 60.5 percent to US$810 million. In particular, the UAE reported an investment of US$1.01 billion in a hotel and convention center in Gangwon Province in the fourth quarter, increasing the UAE’s FDI in Korea 2,747 percent year on year.
In the meantime, the arrival-based amount of FDI sat at US$12.82 billion, a 20.9% increase from the previous year.