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FDI pledged to Korea increases 4.8% to $3.6 billion in Q3 2019-10-11

The Ministry of Trade, Industry and Energy announced on October 10 that the foreign direct investment (FDI) pledged to Korea was USD 3.6 billion in the third quarter, posting a year-on-year growth of 4.8 percent after four straight quarters of contraction. Cumulative announced FDI inflows so far this year totaled $13.5 billion, indicating that the annual goal of attracting $20 billion will be well achievable.
FDI pledged from July to September exhibited three characteristics.

First, FDI continued to flow in advanced materials and components industries. In particular, global companies maintained their interest in Korean manufacturers related to petrochemicals, semiconductors, displays, and future cars.

Second, more investment was made in new areas such as information and communications technology (ICT) as well as biotech and medical fields. E-commerce, the sharing economy, and other service businesses that are based on ICT drew attention from foreign investors. The Korean biotech and medical sector was an eye-catcher as it boasts excellent research experts and clinical trial infrastructure.

Third and lastly, the Korean-wave led foreign businesses to invest in consumer goods and cultural products. Some overseas investors found opportunities in the cosmetics and cold chain industries, while others saw growth potential in cultural products, seeking cooperation with local game developers.

By region, FDI pledged to Korea from Japan soared 520.0 percent year-on-year to $594 million, while that arrived jumped 255.9 percent to $509 million. FDI pledged from the EU rose 25.2 percent to $705 million and that arrived grew 22.1 percent to $195 million.

Meanwhile, investment pledges from the U.S. fell 22.5 percent to $838 million, and that arrived declined 24.3 percent to $198 million. FDI pledges from China decreased 16.5 percent to $156 million while that arrived expanded 138.7 percent to $66 million.

By industry, investment pledged to the Korean service sector increased 37.5 percent to $3.1 billion, but FDI arrived in service decreased 35.8 percent to $1.1 billion. FDI pledged to the manufacturing sector amounted to $373 million, down 68.2 percent. FDI arrived in this industry also dropped 16.9 percent to $247 million.

By type, greenfield investment pledged to Korea advanced 30.6 percent to $2.7 billion, and that arrived contracted 43.5 percent to $799 million. For merger and acquisition (M&A) investment, foreign investors pledged $940 million, down 33.0 percent. M&A investment that arrived, on the other hand, slid 6.9 percent to $560 million.

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