FDI in Korea soars 40% with investors leaving China

Foreign direct investment (FDI) has surged by approximately 40% as of May year-on-year, reaching a record high. Amid the US-China conflict, global companies have been shifting away from China, and Korea has benefited from this trend. Overseas companies have recognized Korea's excellent advanced industrial infrastructure and skilled workforce as strengths.

According to the Ministry of Trade, Industry, and Energy on Thursday, the FDI inflow reported from January to the end of last month amounted to $10.73 billion, setting a record for the January to May. The FDI reported in the first quarter of this year increased by 3.4% from a year ago, reaching $5.63 billion, and it has nearly doubled in just two months.

The government attributes this significant increase to the spillover effects of the U.S.-China conflict. As the United States strengthens its restrictions on advanced industries against China, global companies are expanding their supply chains to Korea, Japan, and ASEAN countries, and Korea is reaping the benefits. Korea possesses excellent infrastructure in the semiconductor and secondary battery sectors, leading many global companies to choose to invest in Korea. As the trend of "divestment from China" spreads, countries are fiercely competing to attract capital. They are offering substantial subsidies and tax incentives to attract FDI from companies investing in their own countries.


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