South Korean corporations are rapidly increasing their overseas investment while refraining from investment in their home country due to regulations.
The Ministry of Economy and Finance announced on September 6 that their direct overseas investment totaled US$12.96 billion in the second quarter of this year, up 25.8% from a year ago and up 33.2% from the previous quarter.
By industry, manufacturing accounted for 38.4% of the total, followed by finance and insurance (29.9%), real state (10.5%), wholesale and retail (6.1%) and mining (4.7%).
That from the manufacturing sector added up to US$4.98 billion with a year-on-year increase of 235.7%. Investment from finance and insurance increased 34.6% to US$3.87 billion while that from real estate rose 74% to US$1.36 billion.
“The growth in the second quarter was mainly because of a large M&A in the manufacturing sector,” the ministry explained, adding, “The M&A involving a semiconductor company boosted the overseas investment as in the previous quarter.”
About 33% of the total investment went to Asia, and it was followed by Latin America (29.2%), North America (22.1%) and Europe (14.4%). By country, the Cayman Islands accounted for 25.1%, followed by the United States (21.2%), Hong Kong (8.2%), China (7.2%) and Vietnam (6.8%).