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New Highlights on Korea’s FDI, Trade and Commerce

Updated: Sep 5, 2023



Foreign Direct Investment

S. Korea's 2021 outbound FDI at record-high USD 76 bn

S. Korea's outbound direct investment in 2021 soared 32.8 percent from the year previous to a record-high USD 75.9 billion, led by financial investors and manufacturing companies, according to the Ministry of Economy and Finance on Mar. 23. By country, the US made up 36 percent of the country's 2021 foreign direct investment (FDI) with USD 27.6 billion, an 81.8 percent on-year surge, the ministry said. One year into the COVID-19 pandemic, Korean exporters led by chipmakers and electric vehicle (EV) battery producers resumed largescale facility investments abroad. The country's outbound FDI in 2021 was more than double the USD 29.5 billion inbound FDI into S. Korea in the same year. By industry, insurance and other financial services firms were the most active investors with a combined USD 29.3 billion, up 58.5 percent on-year. Manufacturing companies came next with USD 18.2 billion in FDI, followed by real estate companies with USD 7 billion. EV makers such as LG Energy Solution Ltd. and SK On Co. were among the companies most aggressive in overseas investments last year, setting up multibillion-dollar joint ventures with General Motors Co. and Ford Motor Co., respectively. POSCO Chemical Co. joined them in building overseas facilities to produce EV materials in the US, jointly with General Motors. This year, Korean exporters are likely to continue to expand overseas facility investments. For the fourth quarter of 2021 alone, S. Korea's outward FDI totaled USD 30.2 billion, a 62.7 percent jump on-year. Excluding the proceeds from investment exits or fund liquidations, net FDI outflows swelled 82.7 percent on-year to USD 26.1 billion.


Trade & Commerce

10 years after KORUS FTA, bilateral trade soars nearly 70 percent

Trade volume of goods between S. Korea and the United States grew nearly 70 percent, and bilateral investment more than doubled over the past decade since their free trade agreement, Seoul's industry ministry said Mar. 11. The Korea-U.S. Free Trade Agreement (KORUS FTA) marked its 10th anniversary this month, as the trade deal came into force in March 2012. The bilateral trade of goods stood at USD 169.1 billion last year, up 67.8 percent from USD 100.8 billion logged in 2011, according to the Ministry of Trade, Industry and Energy. S. Korea's exports to the U.S. surged 70.6 percent during the cited period to USD 95.9 billion in 2021, data showed. The free trade agreement also boosted bilateral investment, with the U.S. being the No. 1 destination for S. Korean firms' overseas investment. The U.S. also accounted for the largest share of foreign direct investment made to S. Korea, according to the ministry. S. Korea's investment in the U.S. more than doubled from around USD 7 billion in 2012 to USD 18.2 billion in 2020, and the U.S.' investment in S. Korea advanced to USD 5.3 billion in 2020 from 3.67 billion, the data showed.


Industry

S. Korea ranks 10th on global top selling product list in 2020

S. Korea had 77 globally top-selling products in 2020, placing 10th in the world, data showed Mar. 14. The number of S. Korea's top-selling goods was up six from a year earlier, and the country retained the No. 10 spot for two years running, according to the Korea International Trade Association (KITA). By segment, S. Korean-made chemicals (29 products) and nonferrous metal products (20) accounted for 63.7 percent of the country's export items with top global market shares. Polarizing sheets used in making liquid crystal displays, laser equipment and 15 other products newly made the list of S. Korea's globally top-selling items, with 11 goods dropping out of the list.



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**This article is extracted from Invest KOREA Magazine April, 2022.

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