FDI Continues to Increase at Steady Rate This Year

With improving business conditions, foreign direct investment has been increasing at a steady rate, hitting $1.121 billion in January, up 15.9 percent over the same month last year.

Ministry officials said there were 302 cases of foreign direct investments in January _ the first month ever in which the monthly figure has exceeded 300 cases.

FDI in Korea in 1999 showed a sharp increase in both the amount and cases with the economic recovery.

Foreign investments made immediately in response to the economic crisis were mainly large-scale projects related to corporate restructuring programs, the officials said. From the latter half of 1999, the large-scale and small and medium-scale investments both increased substantially and became well balanced.

``More recently, the small and medium-scale investments have been leading the increase in FDI. This trend is in accordance with the government's efforts to promote FDI in Korea,'' one official said.

In January, small and medium-scale investments of less than $10 million accounted for 98 percent.

By investment type, the proportion of investment through new investment, such as business start-ups and capital increase participation, made up 88.1 percent of all investments.

There were 20 cases of investments made through the acquisitions of outstanding stocks, which totaled $131 million. Foreign investments through M&As, including P&A investments totaling $800 million, recorded $931 million _ accounting for 83.1 percent of the total investment.

By region, investments from Japan ($165 million) showed a 185.9 percent increase over the same period last year.

Investments from the U.S. and the EU recorded $66 million and $26 million, respectively, below the rates of last year.

By industry, the manufacturing sector showed a sharp rise while investments in the service sector decreased.

There were 866 cases of FDI in the manufacturing sector, recording a 95.5 percent increase over the same period last year.

However, investment in the service sector decreased to $254 million, representing a 51.5 percent decline compared with the same period last year.

2000.02.28