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China's investment in Korean assets hits near 5 tln won this year

All Headlines 10:53 October 09, 2011

SEOUL, Oct. 9 (Yonhap) -- Chinese investors have poured almost 5 trillion won (US$4.24 billion) into buying South Korean assets so far this year, on the back of China's economic growth and massive foreign exchange reserves, data showed Sunday.

Chinese investors injected 4.74 trillion won into South Korean assets including stocks, bonds and property in the January-September period, according to data compiled by the financial watchdog and the government.

Chinese investors bought a net 3.13 trillion won in South Korean bonds during the first nine months of the year, compared with British investors' net selling of 2.18 trillion won and France's net unloading of 2.05 trillion won, according to the Financial Supervisory Service.

In the cited period, China purchased a net 1.25 trillion won worth of local stocks and its direct investment in South Korea reached $228 million in the first half, up 251 percent from the previous year, data showed.

Experts said that China, the world's largest holder of foreign reserve, is expanding investment in Korean assets due to the strength of South Korea's economic fundamentals. The sputtering growth of the U.S. economy and the eurozone debt crisis have made Korean assets attractive investment vehicles.

"As the U.S. and Europe are undergoing troubles, Korean markets can be viewed as stable and profitable markets for Chinese investors," said Kwon Soon-woo, a senior economist at the Samsung Economic Research Institute.

As of the end of June, China's FX reserves stood at $3.19 trillion, up from $2.8 trillion at the end of last year.

Han Jae-jin, an economist at Hyundai Research Institute, said that with its massive holding of FX reserves, there is a high chance that China will continue to expand its investment in South Korea in a bid to diversify its portfolio.


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