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Foreign direct investment (FDI) in South Korea surged to a record high in 2012
as investment from China more than doubled, the government said
According to the Ministry of Knowledge Economy, the total amount of new FDI pledged to South Korea last year came to US$16.26 billion, up 18.9 percent from 2011. The amount that actually arrived here in 2012 jumped 57.8 percent on-year to $10.38 billion.
Such an increase "was made possible partly due to a growing confidence of foreign investors in the South Korean economy following a rise in the national credit ratings and enactment of the country's free trade agreements with the United States and European Union," the ministry said in a press release.
Despite the positive effect the Korea-EU FTA may have had on overall investors, FDI from EU countries to South Korea plunged 46.6 percent on-year to $2.69 billion last year.
Fresh investment pledges from China, Japan and the United States more than offset the drop in FDI from Europe.
New FDI pledged by Chinese investors in 2012 jumped 107 percent from a year earlier to $4 billion with that from Japan also surging 98 percent to $4.5 billion. New investment from the United States also gained 55 percent on-year to $3.7 billion.
The ministry said the $16 billion in foreign investment will help create over 100,000 new jobs with over 70,000 new jobs expected to be added in the service industry over the next three years.
Of the total amount that arrived here in 2012, about $4.12 billion was invested in the manufacturing sector, up 7.8 percent from a year earlier. New investment made in the service industry surged 31.7 percent on-year to $6.16 billion.
The ministry forecast this year's FDI to slightly dwindle to about $15 billion in new pledges, largely due to a further drop of investment from Europe.
"Investments from the U.S. and China are expected to continue growing, but new investments from Japan and the EU are expected to somewhat shrink in terms of their size," it said.