Foreign Investment
The United States became the number one foreign investor in Korea last year, beating the EU, thanks to its relatively faster economic recovery.
The Bank of Korea published the tentative International Investment Position report for 2013 by currency and region on April 21. According to the study, the foreign investment balance in Korea increased 3.8 percent to US$991 billion as of the end of last year, and that of the U.S. increased by US$13.1 billion to US$274.4 billion to constitute for 27.7 percent of the total.
The U.S. used to be largest investor in Korea until the early 2000s. However, the EU took its place through aggressive investment from 2006 to 2010. Then, the investment from the EU fell due to the financial crisis and the U.S. regained the top spot in 2011 before losing out to the EU again in the following year.
In 2013, the EU’s investment in Korea increased US$3.5 billion to US$270.5 billion, which was equivalent to 27.3 percent of the total. By region, the next runner up was China (US$4.5 billion up to US$33.9 billion). That from Southeast Asia dropped by US$3.1 billion to US$159.5 billion, and that from Japan by US$2 billion to US$85.4 billion.
By investment type, the EU accounted for 38.6 percent of the direct investment with US$64.6 billion and 62.5 percent of the derivatives investment with US$16.4 billion. The U.S. took up 35.2 percent of securities investments with US$217.5 billion.
Korea’s foreign investment balance added up to US$607.8 billion during the same period to record a growth rate of 14.5 percent. The central bank explained that the appraisal soared along with U.S. stock prices. By country, investment in the U.S. totaled US$138.1 billion (22.7 percent), followed by that in the EU (US$110 billion, 18.1 percent), Southeast Asia (US$101.1 billion, 16.6 percent) and China (US$97.9 billion, 16.1 percent).