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Foreign direct investment pledged to Korea jump 71.5% to $13.1 billion in H1 2021-07-07

The Ministry of Trade, Industry and Energy announced on July 7 that foreign direct investments (FDIs) pledged to Korea in the first half of the year jumped 71.5 percent year-on-year to USD 13.1 billion. The FDIs that actually arrived in Korea over the same period expanded 57.3 percent to $7.8 billion.

Both FDI pledges and arrivals recorded the second highest values for the first half of the year in history on the back of expectations of a global economic recovery and increased confidence in Korea’s economic fundamentals and pandemic response. In particular, large scale government-led projects related to the K-New Deal (up 163.4 percent), new industries (up 37.8 percent), and materials, parts and equipment sectors (up 14.7 percent) attracted strong investments, contributing to supply chain improvements.

By region, FDI pledged from the U.S. to Korea posted a 20.3 percent growth to $2.1 billion and that actually arrived moved up 48.9 percent to $814 million.

New FDI commitments from the European Union (EU, including the UK) soared 394.0 percent to $6.4 billion, and those arrived spiked 252.6 percent to $4.2 billion.

FDI pledges from Japan to Korea gained 1.4 percent to $465 million, but those actually arrived lost 19.6 percent to $328 million.

Investments pledged from China and other regions (including Hong Kong, Singapore, Taiwan, and Malaysia) inched up 1.7 percent to $2.8 billion, while those actually arrived shrank 33.1 percent to $1.1 billion.

By industry, the manufacturing sector saw a pledged investment of $2.0 billion in the first half of the year, down 11.7 percent from the same period last year. The FDI arrived contracted 46.0 percent to $631 million. Industries that experienced growth were transport machinery and fabricated metal products. Those that experienced declines were electrical and electronics and food products.

For the service sector, FDI pledges totaled $10.4 billion, up 95.0 percent. The FDI arrived recorded $7.1 billion, up 87.6 percent. While investments in information and communications technology and business support and leases climbed up, those in R&D and technology and public services contracted.

By type, greenfield investments pledged to Korea advanced 37.6 percent to $7.6 billion, and those arrived saw a 25.8 percent increase to $3.3 billion.

For M&A investments, FDI pledged was $5.6 billion, which is 157.7 percent more compared to the same period last year. M&A investments that arrived amounted to $4.5 billion, up 92.2 percent.

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