The Ministry of Trade, Industry and Energy announced on January 10 of 2022 that the annual foreign direct investments (FDIs) for 2021 increased by 42.3 percent to USD 29.5 billion. The FDIs that actually arrived in Korea over the same period expanded 57.5 percent to $18.0 billion.
Both FDI pledges and arrivals recorded all-time high annual figures on record.
Despite the COVID-19 pandemic, robust influx factors within the supply chain, vaccine and bio-healthcare, hydrogen economy and energy policy roll-out prospects contributed to an expansion in recovery and investment.
By industry, investment pledged to the manufacturing sector contracted 16.2 percent to $5.0 billion in 2021. However, the FDI arrived gained 26.1 percent to $2.8 billion. Investments to core MPEs (materials, parts, equipment) maintained its steady upward pace, helping to stabilize the supply chain. By FDI arrived, food products, transport machinery, electrical and electronics, and machine equipment/precision medical devices saw growth, whereas areas like chemical engineering and pharmaceuticals experienced declines.
The service sector for 2021 saw a leap in pledged investment of $23.6 billion, up 64.2 percent from last year. The FDI arrived jumped 68.6 percent to $15.0 billion. Investments in information and communications technology, wholesale/retail, and R&D advanced, while those for insurance and real estate fell.
By region, FDI commitments from the U.S. to Korea for 2021 dropped by 0.9 percent to $5.3 billion and those arrived hiked 138.9 percent to $2.5 billion.
Investment from the EU soared 169.0 percent to $12.8 billion and that actually arrived amounted to $7.9 billion, up 98.3 percent.
FDI pledges from Japan to Korea jumped 52.8 percent to $1.2 billion, and those actually arrived increased 20.1 percent to $0.7 billion.
Investments pledged from China and other regions (including Hong Kong, Singapore, Taiwan, and Malaysia) surged 38.1 percent to $7.5 billion, and those actually arrived soared 63.4 percent to $4.9 billion.
By type, greenfield investment pledged to Korea saw a 24.7 percent growth to $18.1 billion, and that arrived saw a 61.4 percent increase to $10.0 billion.
For M&A investments of 2021, FDI pledged recorded $11.4 billion, posting a 83.2 percent rise. M&A investments that arrived recorded $8.1 billion, up 53.0 percent.