World Economy

Pledged FDI to S. Korea Up 18%

Pledged FDI to S. Korea Up 18%Pledged FDI to S. Korea Up 18%

New foreign direct investment pledged to South Korea hit a record high in the first six months of the year despite rising business uncertainties at home and abroad, the government said Monday.

Fresh FDI committed to the country in the January-June period came to $10.52 billion, up 18.6% from $8.87 billion a year earlier, according to the ministry of trade, industry and energy, Yonhap reported.

It marked the largest amount of FDI pledged in history on a half-year basis, surpassing the earlier record of $10.33 billion tallied in the first half of 2014.

The amount of new FDI arriving here, however, tumbled 23.2% on-year to $4.84 billion over the cited period due mainly to a one-off factor.

“The rise in fresh FDI commitments is driven by foreign investors’ confidence in South Korea’s economic fundamentals and business potential,” the ministry said in a release.

The ministry said the country’s vast free-trade network makes South Korea a key investment destination in Asia.

Asia’s fourth-largest economy has signed free trade agreements with 15 countries, including the United States, the European Union and China.

“South Korea is the only country that has FTAs with the US, EU and China at the same time among the Organization for Economic Development and Cooperation members,” Deputy Trade Minister Cheong Seung-il said in a press briefing. “Such FTAs encourage many corporate investors to use South Korea as a production base.”

New FDI pledges from the EU surged more than threefold to $4.21 billion during the six-month period from a year earlier, while those from China also soared 79.5% on-year to $710 million.

In contrast, US investment contracted 13.7% on-year to $1.81 billion and that of Japan slumped 28.8% to $690 million over the cited period.

Fresh FDI commitments into the country’s manufacturing sector soared 159.6% on-year to $2.85 billion in the first half, while new FDI pledges to the country’s service sector gained 13.7% to $7.24 billion.