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Parts and materials technology development
Foreign direct investment pledged to Korea total $3.3 billion in Q1 2020-04-10

The Ministry of Trade, Industry and Energy announced on April 9 that foreign direct investments (FDIs) pledged to Korea in the first quarter of this year increased 3.2 percent year-on-year to USD 3.3 billion. The FDIs that actually arrived in Korea over the same period declined 17.8 percent to $2.4 billion.

Despite the difficult external conditions caused by the spread of the new coronavirus, FDI commitments to Korea increased 3.2 percent compared to the first quarter of the previous year. The virus had limited impacts in the first quarter, but as it spread to the United States and Europe, which are major investors, FDI in the next quarter is likely to be affected.

FDI to materials, parts and equipment sectors contributed to the expansion of the domestic supply chain and strengthened global competitiveness of the manufacturing industry. In addition, new industries including electronic commerce platforms, biohealth, and healthcare attracted foreign investment. High-end consumer goods and video contents production related to the Korean Wave drew active investment activities as well.

The Ministry will support foreign investors’ businesses according to plan, and attract new investment strategically via online investment promotion activities. The Ministry will also attract investments in promising new industries such as biohealth and medical devices including coronavirus diagnostic kits.

By country, FDI pledged from the U.S. to Korea soared 136.8 percent to $372 million while that actually arrived jumped 98.7 percent to $186 million.

EU investment pledged to Korea fell 24.4 percent to $746 million while that arrived declined 62.4 percent to $569 million.

New FDI commitments from Japan went down 50.2 percent to $127 million, and those arrived contracted 72.0 percent to $75 million.

Investments pledged from China and other regions (including Hong Kong, Singapore, Taiwan, and Malaysia) increased greatly to $1.5 billion (up 172.3 percent) and that actually arrived also jumped 251.0 percent to $1.3 billion.

By industry, the manufacturing sector saw a pledged investment of $620 million, down 48.7 percent year-on-year. The FDI arrived shrank 51.8 percent to $431 million. Industries that experienced growth were electrical and electronics, metal and processed metal products. Those that experienced decreases were transportation machinery and food.

The service sector saw a pledged investment of $2.6 billion, up 37.8 percent. The FDI arrived also went up 50.8 percent to $2.0 billion. Growth was experienced in finance and insurance as well as R&D and technology. Decreases were seen in wholesale and retail, business support and leasing.

By type, greenfield investment pledged to Korea dropped 13.4 percent to $1.9 billion, and that arrived went down 32.1 percent to $1.1 billion.

For merger and acquisition (M&A) investment, foreign investors pledged $1.4 billion, which is 39.0 percent more compared to the first quarter of last year. Meanwhile, M&A investment that arrived inched up 1.2 percent to $1.3 billion.

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