FDI pledges to S. Korea dip 11 pct in 2020 amid pandemic

By Kang Yoon-seung

SEOUL, Jan. 12 (Yonhap) -- Foreign direct investment (FDI) pledges to South Korea dipped 11 percent in 2020 from a year earlier, data showed Tuesday, as the unprecedented virus pandemic has dealt a harsh blow to business activities around the globe.

Asia's No. 4 economy received US$20.7 billion worth of FDI commitments last year, compared with $23.3 billion logged in 2019, according to the Ministry of Trade, Industry and Energy.

The amount of investment that actually arrived here also dropped 17 percent over the cited period to $11 billion.

It still marked the sixth consecutive year that FDI pledges to South Korea hovered above the $20 billion threshold.

The ministry said that while the amount of FDI pledges sharply lost ground over the first half of 2020 due to COVID-19, the country managed to attract more investment during the second half on the back of its relatively successful control of the pandemic.

FDI pledges moved down 22.4 pct in the January-June period, but the margin narrowed to just 2.8 percent for the remaining six months of 2020, the ministry data showed.

The United Nations Conference on Trade and Development estimates that the combined volume of global FDI dropped from 30 to 40 percent on-year in 2020.

By segment, FDI pledges for so-called emerging areas, including artificial intelligence, big data, cloud computing, eco-friendly automobiles and biotechnologies, increased especially. The areas garnered $4.9 billion worth of FDI pledges last year, up 9.3 percent from 2019.

Investment in the manufacturing segment dropped 27.4 percent on-year in 2020 to reach $5.97 billion, while investment in the service area edged down 2.7 percent to $14.35 billion.

For 2021, South Korea said uncertainties still remain due to the prolonged economic jitters from COVID-19, coupled with the launch of the new U.S. administration and Britain's full-fledged departure from the European Union.

The country, however, said it will seek to attract more investment by utilizing its free-trade networks.

By investors, the United States pledged to make $5.3 billion worth of investment in South Korea in 2020, down 22.5 percent on-year. The decrease was attributable to the sharp decline from the service segment.

Investments from the European Union, including Britain, fell 56 percent over the period to $4.7 billion. Those from Japan halved on-year as well.

FDI pledges made by China, on the other hand, doubled over the period to $1.99 billion on the back of the robust performance of the manufacturing segment.

colin@yna.co.kr
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