Foreign direct investment in South Korea surges 29.2%

New foreign direct investment (FDI) pledged to South Korea surged significantly from a year earlier in the first half on a large increase in fresh investment pledges from China, the government said Tuesday.
In the first six months of the year, the amount of new FDI pledged to the country came to US$10.33 billion, up 29.2% from the same period last year, according to the Ministry of Trade, Industry and Energy. The figure marks the highest-ever amount for the first half.
The amount of new FDI that arrived here in the first half also surged to a record high of $7.2 billion, up 55.9% from a year earlier, (Yonhap) news agency reported.
Kwon Pyung-oh, head of the ministry's trade and investment bureau, earlier said the increase in new FDI showed the strength of the local economy.
"I believe the increase in FDI was possible despite various negative factors, such as the North Korea risk, as foreign investors and companies have a strong faith in the fundamentals of the South Korean economy," he has said.
Ministry officials partly attributed the rise to a series of steps taken by the government to help boost foreign investment.
Under a set of measures announced at the start of the year, the government is set to offer additional tax breaks to foreign companies that bring their headquarters to the country, as well as to those that employ a certain number of workers here.
The trade ministry has also vowed to eliminate at least 19 out of 62 regulations that currently apply to trade or foreign investment within the next four years.
Ministry officials said the country's FDI may top $20 billion for the first time in the country's history this year. The government's earlier target was at $17 billion, which, if reached, will still mark a new record.
In the first half, new FDI pledges from the United States slipped 0.4% on-year to some $2.51 billion, with those from Japan plunging 15.2% to about $1.15 billion.
New FDI pledges from China, on the other hand, more than quadrupled to $776 million from $155 million in the first half of 2013 with the combined total from all Chinese-speaking countries, including Hong Kong and Taiwan, spiking more than 200% on-year to $2.38 billion, according to the ministry.