Foreign Direct Investment in S. Korea Hits Fresh High in 2016

New foreign direct investment (FDI) pledged to South Korea increased 1.9% on-year to hit a record high in 2016 thanks to a rise in investment in the service segment, the government said Tuesday.

    New FDI pledges came to US$21.3 billion last year, up from the previous record of $20.9 billion set in 2015, according to the Ministry of Trade, Industry and Energy.

    The ministry said the amount of new FDI in the country had surpassed the $20-billion mark for two years in a row, South Korea's news Agency (Yonhap) reported. Last year's jump was attributed to a 5.3% on-year increase of new FDI for the service industry worth $15.51 billion, officials said. 

    Fresh FDI commitments to the country's manufacturing sector also jumped 12.4% on-year to $5.13 billion last year, the ministry said. "The FDI commitments to both the manufacturing and service sectors increased despite Brexit," the ministry said in a press release. 

    New FDI pledges through value-creating "greenfield investment" also jumped 6.5% to $15.02 billion in 2016 from a year earlier, the ministry said. Greenfield investment refers to a form of FDI where a parent company builds its operations in a foreign country from the ground up. 

    New FDI pledges from the European Union almost tripled to $7.4 billion in 2016 and FDI commitments from China also increased 3.6% on-year to $2.05 billion. On the other hand, fresh FDI pledges from the United States inched down to $3.8 billion, with those from Japan sinking four years in a row to $1.2 billion.

    The amount of new FDI arrivals, however, tumbled 40.9% on-year to $9.76 billion in 2016. New FDI pledges through M&As declined 7.8% on-year to $6.27 billion last year, the ministry said