Korean Manufacturing Exodus
The total amount of overseas investment reported by South Korean manufacturers from the third quarter of 2017 to the first quarter of 2018 amounted to $11.44 billion, up 68% from a year earlier, according to a report released by the Overseas Economic Research Institute of the Export-Import Bank of Korea on June 28.
The amount of investment actually made by Korean manufacturers during the period reached US$7.31 billion, up 28 percent from the same period a year earlier.
These days, an increasing number of South Korean manufacturers are heading abroad and the pace is much faster than before. For example, their overseas investment fell 2.3% for the first three quarters of 2008 and rose only 5.4% in the Park Geun-hye government. Experts point out that the exodus of Korean manufacturers is fueled by the increase in minimum wage and corporate taxes.
Moreover, the investment outflow is likely to further accelerate due to a 52-hour work week scheduled to be implemented next month and mounting trade protectionism. “The hollowing out of the manufacturing sector, which provides jobs of the highest quality, will become unpreventable without policy efforts to attract manufacturers,” said professor Huh Yoon at the Graduate School of International Studies of Sogang University.