Foreign Companies Unwilling to Invest in H2

Seven out of 10 foreign-invested companies in Korea are unwilling to invest in the country in the second half of this year.

The Korea Chamber of Commerce and Industry conducted a survey of 845 foreign-invested companies in Korea. In the survey on the prospects and challenges for foreign firms` investment, 68.9 percent of the respondents answered they would not invest in Korea in the second half. Only 31.1 percent said they plan to invest in Korea.

Asked how Korea’s investment environment will change, 57.9 percent answered it would aggravate, 28.1 percent said it will not change, and 14 percent answered it would improve.

Among those who provided negative prospects for Korea’s investment environment, 34.5 percent chose uncertainties in foreign exchange rates and interest rate as the reason behind their forecast. The answer was followed by an economic slowdown in Korea (31.6 percent), price instability (29.9 percent), and aggravating labor-management relations (2.9 percent).

When asked to evaluate the investment environment of major economies in seven sectors, respondents gave Korea 2.89 points out of five. It is lower than the figures of Singapore (3.60), Hong Kong (3.51), the United States (3.46), Taiwan (3.18) and Japan (3.25). It was slightly higher than that of China (2.71).

abc@donga.com