By Yoon Ja-young
Foreign direct investment (FDI) pledged to Korea increased 30.6 percent last year to a record high of $19 billion on expectations of free trade agreements (FTAs) Korea signed with major economies.
European and Chinese companies increased investment applications on the Korean government's aggressive steps to attract more FDI, officials said.
The Ministry of Trade, Industry and Energy said Monday that the new FDI commitment to Korea was a considerable improvement from $14.6 billion in 2013.
By industries, FDI to the manufacturing sector increased by 64.6 percent to $7.7 billion, while the services sector drew $11.2 billion, up 13.6 percent from the previous year.
Investment through M&As recorded $8 billion, while green field investment, where a new plant or a business is set up, totaled $ 11 billion.
Kwon Pyung-oh, head of the ministry‘s trade and investment policy, explained that the government has been actively attracting FDIs through President Park Geun-hye's "sales diplomacy."
"The government also tried to improve corporate surroundings, which includes diverse deregulation measures. It seems the promotion of foreign investor-friendly policies has paid off," he added.
Korea's FTAs with major economies helped increase the FDI into Korea.
Chinese investment into Korea increased by 147.2 percent to $1.2 billion last year, with the Chinese government's encouragement of investments overseas and increasing economic cooperation between the two countries. The ministry added that some of the Chinese investment into Korea is coming via Hong Kong and Singapore.
It's notable that Chinese investment into Korea is becoming diversified, with the most recent investments including a comprehensive resort project in Jeju Island and a mobile game business, as well as a food and garment businesses.
Japanese investment into Korea, meanwhile, decreased 7.5 percent, though its $2.5 billion investment is still more than double the investment by China. The EU is Korea's biggest investor, totaling $6.5 billion last year, followed by the United States at $3.6 billion.
"This year, we will try to attract businesses from major investor countries such as China, the United States and EU. They will be able to use Korea as a stepping stone for advancement into global markets that have become Korea's ‘second domestic market' following the FTAs," Kwon added.
The ministry aims to attract $20 billion in FDI this year, on economic recovery in the United States and the positive effects of the FTAs.
"We will select sectors where foreign investment can exert a more positive effect on domestic economy, such as creating jobs and strengthening industrial competitiveness, and beef up efforts to attract FDIs by each country," the official said.
The amount of new FDI that has arrived also reached a new high of $11.52 billion last year, up 17.1 percent from the previous year.
Foreign direct investment (FDI) pledged to Korea increased 30.6 percent last year to a record high of $19 billion on expectations of free trade agreements (FTAs) Korea signed with major economies.
European and Chinese companies increased investment applications on the Korean government's aggressive steps to attract more FDI, officials said.
The Ministry of Trade, Industry and Energy said Monday that the new FDI commitment to Korea was a considerable improvement from $14.6 billion in 2013.
By industries, FDI to the manufacturing sector increased by 64.6 percent to $7.7 billion, while the services sector drew $11.2 billion, up 13.6 percent from the previous year.
Investment through M&As recorded $8 billion, while green field investment, where a new plant or a business is set up, totaled $ 11 billion.
Kwon Pyung-oh, head of the ministry‘s trade and investment policy, explained that the government has been actively attracting FDIs through President Park Geun-hye's "sales diplomacy."
"The government also tried to improve corporate surroundings, which includes diverse deregulation measures. It seems the promotion of foreign investor-friendly policies has paid off," he added.
Korea's FTAs with major economies helped increase the FDI into Korea.
Chinese investment into Korea increased by 147.2 percent to $1.2 billion last year, with the Chinese government's encouragement of investments overseas and increasing economic cooperation between the two countries. The ministry added that some of the Chinese investment into Korea is coming via Hong Kong and Singapore.
It's notable that Chinese investment into Korea is becoming diversified, with the most recent investments including a comprehensive resort project in Jeju Island and a mobile game business, as well as a food and garment businesses.
Japanese investment into Korea, meanwhile, decreased 7.5 percent, though its $2.5 billion investment is still more than double the investment by China. The EU is Korea's biggest investor, totaling $6.5 billion last year, followed by the United States at $3.6 billion.
"This year, we will try to attract businesses from major investor countries such as China, the United States and EU. They will be able to use Korea as a stepping stone for advancement into global markets that have become Korea's ‘second domestic market' following the FTAs," Kwon added.
The ministry aims to attract $20 billion in FDI this year, on economic recovery in the United States and the positive effects of the FTAs.
"We will select sectors where foreign investment can exert a more positive effect on domestic economy, such as creating jobs and strengthening industrial competitiveness, and beef up efforts to attract FDIs by each country," the official said.
The amount of new FDI that has arrived also reached a new high of $11.52 billion last year, up 17.1 percent from the previous year.
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