Wednesday, November 13, 2019
Investors Shunning South Korea for Regulations and Work Hour Reduction
FDI in Korea Drops 37% in H1
Investors Shunning South Korea for Regulations and Work Hour Reduction
  • By Jung Suk-yee
  • November 8, 2019, 09:09
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South Korea suffered a 37 percent drop in foreign direct investment in the first half of this year.

The Federation of Korean Industries (FKI) announced on Nov. 7 that the foreign direct investments (FDIs) in the United States and China increased year on year in the first half of this year unlike those in South Korea and Japan. Specifically, those in the United States, China, Japan and South Korea rose 3.9 percent, rose 3.5 percent, fell 22.7 percent and dropped 37.3 percent, respectively. The total FDI in G20 countries showed a year-on-year increase of 6.8 percent in the first half.

Each of the United States, China, South Korea and Japan showed a year-on-year decline when it comes to manufacturing FDI. China posted negative 3.8 percent and the United States posted negative 9.2 percent whereas South Korea’s figure amounted to 57.2 percent. “The rapid decline was led by transport machinery FDI and electrical and electronics FDI, which plummeted 86.4 percent and 79.2 percent, respectively,” the FKI explained.

On the other hand, the FDIs in the service sectors of the United States and China increased sharply. For example, the investments in the financial and information and communications sectors of the United States jumped 42.9 percent and 32 percent, leading to a service sector FDI growth of 14.9 percent.

Likewise, the FDI in China’s service sector increased 6.7 percent from a year earlier in the first half of 2019. In contrast, that in the same sector of South Korea fell 19.7 percent with information and communications FDI and lodging and food service business FDI dropping 42.8 percent and 42.4 percent, respectively.