Flood of Yuan
In spite of the sluggish economic recovery inside and outside of Korea, foreign direct investment (FDI) is surging into Korea. While investment from Japan has shrunk due to the depreciation of the Japanese yen and the worsened relationship between Korea and Japan, Chinese funds are flooding in.
The Ministry of Trade, Industry and Energy announced on Oct. 5 that the FDI amount registered from January to September this year was US$14.82 billion, a 37.9 percent increase from the same period last year. This is even greater than the total FDI amount registered throughout the entire year last year, and the historical highest based on the figures from January to September.
The actual amount of money invested (funds received) during the same period was US$9.77 billion, showing a remarkable growth of 50.1 percent. This is the historical highest as well, almost reaching US$9.8 billion of funds received all last year.
On the basis of amounts registered, investment from China surged 230.4 percent to US$1.03 billion from January to September. Investment from Chinese region including Taiwan and Hong Kong also jumped 89.8 percent to US$3.01 billion.
China is actively engaged in the construction of integrated resorts and real estate development in Korea. Chinese interests include not only tourism and leisure, but now also cultural content and food.
Investment from the European Union (EU) increased 84.1 percent to US$5.93 billion. Investment from the U.S. also increased 6.4 percent to US$2.86 billion. Yet, investment from Japan decreased 16.6 percent to US$1.64 billion.
By industry, foreign investment in the manufacturing industry increased 101.4 percent to US$6.07 billion. Foreign investment in the service industry grew 11.4 percent to US$8.6 billion as well.
By investment pattern, M&As increased 91.7 percent to US$7.23 billion. Green field type investment through which factories or business locations are built increased 8.9 percent to US$7.59 billion.