EU emerges as largest investor in Korea

Foreign direct investment into Korea from the European Union has surpassed that of the United States and Japan, making it the largest investor in the nation.

 "European firms partly invested in the manufacturing sector in the 1980s, but have recently focused on finance, distribution and other service areas," LG Economic Research Institute (LGERI) said in a report.

 "Korea has become an 'independent market' to them, a change from a low-priced manufacturing base." The EU invested $980 million in Korea from 1962 to 1990, very little compared to the United States and Japan. But it surpassed Japanese direct investment in the mid-1990s and is now the number one foreign direct investor in Korea.

Last year, EU investment in the country reached $6.26 billion, 40.3 percent of the total $15.5 billion foreign investment.

The United States invested $3.75 billion and Japan $1.75 billion.

"Companies begin with trading when they start a business with a foreign country because of low risk and then move into direct investment when the timing is right, and that is seemingly the sentiment in Korea," an LG analyst said.

Some EU firms are using Korea as a base to advance into China, and most European companies hold a positive perception on the recovery of the Korean economy, he said.

At a trade seminar hosted by the EU Chamber of Commerce in Korea last week, participants agreed that Korea's economic crisis is almost over.