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By APD writer Alice
Foreign direct investment (FDI) pledged to South Korea in 2019 reached $23.3 billion, according to data released by the South Korean Ministry of Trade, Industry and Energy on January 6.
2019 marked the fifth consecutive year South Korea received more than $20 billion of annual registered FDI.
However, as compared to the record high of 26.9 billion USD recorded in 2018, the registered FDI capital dropped by 13.3%. The ministry explained that foreign investors had already registered many super-large projects early in 2018 because the South Korean government removed corporate tax incentives for foreign companies after 2019. Therefore, the FDI committed in 2018 hit record high.
The ministry announced that FDI disbursement hit $12.8 billion, down 26% year-on-year.
Foreign direct investment tended to level off in the first half of last year and then sharply improved in the second half. FDI decreased by 35.7% in the first quarter and 38.1% in the second quarter. But, it increased 4.7% in the fourth quarter and 27.9% in the fourth quarter.
That's because unfavorable external conditions for the first 6 months, such as the US-China trade war, reduced global investment demand, and removal of corporate tax exemption. However, in the second half of the year, the Government and localities of South Korea actively attracted investment by increasing business support in cash, causing FDI inflows to rise again.
The US registered $6.84 billion in FDI in South Korea, up 16.4% compared to 2017. However, the actual disbursed capital was only $1.35 billion, a 64.6% reduction. In contrast, the European Union registered 7.13 billion USD, down 20.1%, but the disbursed capital reached $6.99 billion, up 27.7%. Japan had a pledged capital of $1.43 billion, up 9.9%, of which $1.03 billion was disbursed, down 0.6%. China's registered FDI capital reached $980 million, down 64.2%, with $190 million disbursed, down 76.2%.
(ASIA PACIFIC DAILY)
