According to the ‘2020 Foreign Direct Investment’ released by the Ministry of Trade, Industry and Energy on the 12th, FDI last year recorded $2.75 billion, down 11.1% from the previous year on a reporting basis. FDI has been on the decline for the second year since peaking at $26.9 billion in 2018.
Even on the basis of arrival at which investment was made, it was only $11.90 billion, down 17% from the same period last year.
Last year’s FDI declined by 22.4% in the first half of the year as the spread of Corona 19 rapidly cooled investment sentiment. Then, in the second half of the year, it declined by 2.8%, showing a slight recovery.
According to the United Nations Conference on Trade and Development (UNCTAD), global FDI in 2020 is expected to decrease by 30-40% compared to the same period last year. Global FDI in the first half of the year was $399.9 billion, down 49% from the same period last year.
The Ministry of Industry emphasized that there are positive signals, such as increasing investment in new industries related to the 4th Industrial Revolution, and turning to an increasing trend in the second half of the high-tech small department.
Both the scale and proportion of investments based on reporting standards for new industries related to the 4th industrial revolution such as AI, big data, cloud, eco-friendly vehicles, and biotechnology have increased. FDI investment of new industries increased 9.3% from $7.7 billion in 2019 to $8.42 billion last year. The share of total FDI also rose from 33% in 2019 to 40.6% last year.
Investment in high-tech materials, parts and equipment such as semiconductors, secondary batteries, and eco-friendly car parts recorded $3.81 billion, down 7.0% from the same period last year. In the first half of the year, investments plummeted 43.7% and then soared 30.9% in the second half.
Although it is still insignificant, the amount of investment in the fields related to the Green New Deal, such as wind power and solar power, renewable energy, water treatment and resource recycling, recorded 480 million dollars, more than doubled from the previous year.
An official from the Ministry of Industry explained, “It was reduced in terms of amount, but it is meaningful that investments related to the general manager, including non-face-to-face and bio-in response to the change in Corona 19, are continuing.”
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The government predicted that it will not be easy for FDI to rebound sharply this year. According to UNCTAD, global FDI is expected to decline by 5-10% this year and then recover after next year. This is because global investors’ investment sentiment is inevitably maintained for the time being due to uncertainties about the global economy, such as the prolonged economic recession caused by the re-proliferation of Corona 19, the launch of a new government in the US, and the realization of Brexit in the UK.
However, as investment sentiment for new industries, cutting-edge general managers, and Green New Deal continues to grow, the Ministry of Industry is planning to induce investment in high-tech companies by providing customized incentives.
An official from the Ministry of Industry said, “When investing in a high-tech investment zone, we will increase investment in the future market by notifying incentives such as granting subsidies or special cases for land use.”