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FDI pledges to S. Korea dip 37 pct in H1

Economy 10:30 July 11, 2019

By Kang Yoon-seung

SEJONG, July 11 (Yonhap) -- Foreign direct investment (FDI) pledged to South Korea in the first half of 2019 nosedived 37 percent on-year as the prolonged trade row between Washington and Beijing weighed on investor sentiment, data showed Thursday.

South Korea received US$9.87 billion worth of FDI commitments from January to June, plunging from the record high of $15.7 billion a year earlier, according to the data from the Ministry of Trade, Industry and Energy.

The decline was in part due to a base effect after a 64.2 percent on-year surge in the first half of 2018, the ministry said, claiming that FDI around the globe has also been falling over recent years.

The FDI pledged during the first half of the year, however, is still above the average of $8.45 billion posted from 2009 to 2018, the ministry added.

Investment pledges from the United States moved up 3.1 percent over the first six months of this year to reach $3.11 billion, or 31.5 percent of the total, the data showed.

FDI from China, on the other hand, plunged by a whopping 86.3 percent to just $300 million, following Beijing's imposition of tougher regulations on capital flows amid the prolonged trade row with Washington, the ministry said.

Investment from the European Union nosedived 41.5 percent to $2.68 billion, due mostly to the sluggish European economy coupled with uncertainties stemming from Brexit.

FDI pledges from Japan slipped 38.5 percent on-year to $540 million, as Japanese companies focused on expanding domestic investment ahead of the 2020 Summer Olympics in Tokyo, according to the ministry.

By sector, manufacturing drew in $3 billion worth of FDI pledges, down 57.2 percent from a year earlier, and the service industry attracted $6.72 billion of new investment from abroad, down 19.7 percent on-year, led by sluggish performances in the financial and real estate segments.

For the remainder of 2019, South Korea aims to attract FDI especially in the non-memory chip, next-generation car and biotechnology sectors, according to the ministry.

The FDI pledge for this year will surpass the $20 billion mark for the fifth consecutive year. Asia's fourth-largest economy received $26.9 billion worth of FDI commitments in 2018, up 17.2 percent from a year earlier, the ministry said.

FDI pledges to S. Korea dip 37 pct in H1 - 1

colin@yna.co.kr
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