Last year, foreign direct investment (FDI) reached 20 billion dollars for six consecutive years since 2015.
The Ministry of Trade, Industry and Energy announced on the 12th that the FDI in 2020 was $2.75 billion, down 11.1% from the previous year, and the arrival criterion decreased by 17% to $11.9 billion.
With the spread of Corona 19 in earnest, FDI in the first half of 2019 decreased by 22.4% from the first half of 2019 to only $7.66 billion, but decreased in the second half through online IR such as K-defense, video consultation, webinars, and strategic attraction efforts for promising companies. The width has eased to 2.8% ($13 billion).
Investment Policy Officer Park Jeong-wook of the Ministry of Industry said, “Last year, FDI decreased significantly in the first half amid the Corona 19 situation, but entered a recovery trend in the second half and reached 20 billion dollars for six consecutive years.” “Global FDI “The decline in Korea was relatively good,” he explained.
Last year, FDI increased investment in new industries related to the Fourth Industrial Revolution. In particular, investments in the field of online platforms and e-commerce that reflect changes in lifestyle after Corona 19, such as distance education, support for working from home, and non-face-to-face consumption, continued.
Investing to secure infrastructure was also active, such as a data center that supports corporate digital transformation and a logistics center that supports e-commerce services. The performance of investment in medicine and bio is based on K-quarantine for the Corona 19 diagnostic kit.
Investments related to new industries such as artificial intelligence (AI), big data, cloud, eco-friendly vehicles, and biotechnology were $8.42 billion, an increase of 9.3% from the previous year.
Investment in materials, parts and equipment decreased by 7% to 3.81 billion dollars. In the first half of the year, the decline reached 43.7%, but the amount of investment in the second half increased by 30.9%.
Investments in new and renewable energy such as wind power and solar power and green industry-related fields such as water treatment and resource recycling were $480 million, up 101.4% from the previous year.
By country, the US invested $5.3 billion, a decrease of 22.5% from the previous year on a reporting basis. On arrival, the investment was down 34.5% to $910 million.
The European Union (EU) is $4.72 billion, down 33.8% in reporting standards. By arrival, it was only $3.7 billion, down 47.0%.
Japan invested $730 million, down 49.1% on the basis of reporting, and $500 million, down 57.9% on arrival.
Greater China, including China, Hong Kong, Singapore, Taiwan, and Malaysia, invested $5.46 billion and $2.94 billion, up 26.5% and 34.4%, respectively, on the basis of declaration and arrival.
By industry and type, investment in the manufacturing industry was $5.97 billion on a reported basis, down 27.4% from the previous year. The investment in the service industry was $1.35 billion, down 2.7% from the previous year.
Greenfield investment recorded 14.5 billion dollars, down 8.8% from the previous year. Merger and acquisition (M&A) investment fell 16.0% to $6.23 billion.
The Ministry of Industry, citing data from the United Nations Council on Trade and Development (UNCTAD), predicted that this year’s global foreign direct investment would decrease by an additional 5-10%. Some analysts say that recovery can be expected only after 2022.
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The negative factors included the prolonged economic recession following the re-proliferation of Corona 19, the launch of a new US government, and the realization of Brexit in the UK.
The Ministry of Industry predicted that it will not be easy to attract FDI this year as there are both internal and external factors such as Corona 19 and global economic uncertainty.