South Korean manufacturers’ overseas investment almost doubled year on year in 2018 and South Korea’s total overseas direct investment hit an all-time high during the same period. This has to do with an increase in the number of cross-border M&As and manufacturing facility relocation to China, Vietnam and other countries.
The Ministry of Economy and Finance announced on March 8 that South Korea’s total overseas direct investment increased by 11.6 percent to US$49.78 billion last year. The annual amount, which broke the US$40 billion mark in 2017, reached an all-time high since records began in 1980.
South Korean companies’ overseas direct investment topped US$20 billion in 2007. Then, it remained around US$30 billion in 2013, 2014 and 2015. Subsequently, it showed a double-digit year-on-year growth for three years in a row until 2018.
Especially, South Korean manufacturers’ overseas investment hit a record high of US$16.37 billion last year with a year-on-year growth of 92.7 percent, which is almost 26 times the average growth for the three most recent years. This is attributable to large-scale M&A deals concluded by semiconductor and electronics manufacturers and overseas manufacturing facility expansion by display, battery and semiconductor manufacturers.