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PRESS RELEASES

2017 Korean Foreign Direct Investment

  • DivisionInternational Economic Affairs Bureau - International Economic Cooperation Division
  • DateMarch 13, 2018
  • Tel044-215-7639

2017 Foreign Direct Investment

 

Korean FDI Rises to a Record High in 2017

 

 

Korean foreign direct investment (FDI) in 2017 rose to a record high of US $43.70 billion, up 11.8 percent from US $39.10 billion in the previous year.

 

Korean FDI, 2017

       (US$ billions, %)

 

2013

2014

2015

2016

2017

Amount invested

(y-o-y)

30.78

(4.9)

28.49

(-7.4)

30.29

(6.3)

39.10

(29.1)

43.70

(11.8)

Amount Reported

(y-o-y)

36.33

(-10.6)

35.91

(-1.2)

40.67

(13.3)

49.62

(22.0)

49.43

(-0.4)

 

 

By industry, FDI in finance & insurance (up 47.5%) and wholesale & retail (up 64.9%) surged to a record high, while FDI in manufacturing declined (down 3.4%).  FDI in real estate & renting also fell (down 43.3%) after rising steadily since 2013.

 

FDI by Industry, 2017

 (US$ billions, %, y-o-y)

 

2016

2017

Change

Finance & insurance

8.61

12.70

47.5

Wholesale & retail

5.80

9.56

64.9

Manufacturing

8.12

7.84

-3.4

Real estate & renting

6.62

3.76

-43.3

Publishing & communications

1.34

2.31

72.3

 

 

By region, FDI rose in North America (up 6.6%), Asia (up 11.4%), Latin America (up 15.8%) and Europe (up 55.6%), but fell in the Middle East (down 40.1%) as construction investment declined (down 55.6%) in the region.[1]

 

FDI by Region, 2017

 (US$ billions, %, y-o-y)

 

2016

2017

Change

North America

14.80

15.77

6.6

Asia

11.02

12.28

11.4

Latin America

6.05

7.00

15.8

Europe

4.40

6.85

55.6

Middle East

1.09

0.65

-40.1

 

 

By country, FDI increased in the US (up 12.8%), Cayman Islands (up 11.6%) and Hong Kong (up 90.2%),[2] but dropped in China (down 11.9%) and Vietnam (down 17.5%).[3]

 

FDI by Country, 2017

 (US$ billions, %, y-o-y)

 

2016

2017

Change

US

13.56

15.29

12.8

Cayman Islands

4.46

4.98

11.6

Hong Kong

1.56

2.97

90.2

China

3.37

2.97

-11.9

Vietnam

2.37

1.95

-17.5

 

 

By type, greenfield investment, such as establishment of a foreign subsidiary, fell 2.1 percent, but mergers & acquisitions increased 33.6 percent.

 

FDI by Type, 2017

      (US$ billions, %, y-o-y)

 

2016

2017

Change

Greenfield investment

23.41

22.91

-2.1

M & A

15.37

20.53

33.6

 

 

Foreign Direct Investment, Q4 2017

 

Korean FDI in the fourth quarter of 2017 declined 22.3 percent year-on-year to US $10.14 billion from US $13.05 billion in the same quarter of the previous year.

 

Korean FDI, Q4 2017

  (US$ billions, %)

 

2016

2017

Change

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

y-o-y

q-o-q

Amount Invested

8.30

9.03

8.72

13.05

13.40

10.30

9.86

10.14

-22.3

2.9

 

 

By industry, FDI rose in finance & insurance (up 37.2%), manufacturing (up 30.6%) and publishing & communications (up 12.7%), but fell in real estate & renting (down 34.0%) and wholesale & retail (down 83.9%).

 

FDI by Industry, Q4 2017

       (US$ billions, %, y-o-y)

 

Q4 2016

Q4 2017

Change

Finance & insurance

2.73

3.74

37.2

Manufacturing

2.30

3.01

30.6

Publishing & communications

0.25

0.28

12.7

Real estate & renting

1.36

0.90

-34.0

Wholesale & retail

3.74

0.60

-83.9

 

 

By region, FDI increased in Asia (up 10.4%) and Europe (up 96.9%),[4] but fell in North America (down 60.7%).[5]

 

FDI by Region, Q4 2017

      (US$ billions, %, y-o-y)

 

Q4 2016

Q4 2017

Change

Asia

3.32

3.66

10.4

Europe

0.77

1.51

96.9

North America

6.08

2.39

-60.7

Latin America

1.97

2.02

2.5

 

 

By country, FDI rose in Hong Kong (up 32.4%),[6] but fell in the US (down 60.1%), Cayman Islands (down 19.2%) and Vietnam (down 1.1%).[7]

 

FDI by Country, Q4 2017

 (US$ billions, %, y-o-y)

 

Q4 2016

Q4 2017

Change

Hong Kong

0.49

0.65

32.4

US

5.44

2.17

-60.1

Cayman Islands

1.67

1.35

-19.2

Vietnam

0.55

0.54

-1.1

 

 

By type, greenfield investment increased 30.7 percent, while mergers & acquisitions fell 57.9 percent.

 

FDI by Type, Q4 2017

      (US$ billions, %, y-o-y)

 

Q4 2016

Q4 2017

Change

Greenfield investment

5.22

6.82

30.7

M & A

7.78

3.28

-57.9

 

 

Korean FDI is expected to grow due to increasing corporate investment in advanced technologies and newly developing markets.  FDI is also expected to diversify in terms of sector and region.

 

 


[1] US $0.87 billion →US $0.39 billion

[2] FDI in the US wholesale & retail increased 68.9 percent (US $3.98 billion→$6.73 billion), while in Cayman Islands and Hong Kong, FDI in finance & insurance rose 17.3 percent (US $3.40 billion→$3.99 billion) and 2,403 percent (US $0.08 billion→$2.05 billion), respectively.

[3] Korean FDI in China and Vietnam’s manufacturing declined 12.9 percent (US $2.45 billion→$2.13 billion) and 21.2 percent (US $1.77 billion→$1.39 billion), respectively.

[4] FDI in Asia’s manufacturing and Europe’s finance & insurance rose 15.4 percent (US $1.77 billion→$2.04 billion) and 143.3 percent (US $0.22 billion→$0.55 billion), respectively.

[5] FDI in North America’s wholesale & retail dropped 90.2 percent (US $3.33 billion→$0.33 billion).

[6] FDI in Hong Kong’s finance & insurance surged 3,170.4 percent (US $0.01 billion→$0.41 billion).

[7] FDI in the US wholesale & retail, Cayman Islands’ finance & insurance and Vietnam’s manufacturing fell 90.2 percent (US $3.32 billion→$0.33 billion), 8.1 percent (US $1.23 billion→$1.13 billion) and 17.8 percent (US $0.43 billion →$0.36 billion), respectively.

 

Please refer to the attached PDF