Overseas Direct Investment Drops 22.2% Due to High Interest Rates... Investment in China Falls 78.1%
Last year, overseas direct investment decreased by 22.2% amid a high interest rate trend. In particular, investment in China plummeted by 78.1% amid the economic slowdown in China and the deterioration of Korea-China relations.
The Ministry of Economy and Finance announced on the 15th that last year's overseas direct investment amounted to $63.38 billion based on total investment, down 22.2% from the previous year ($81.51 billion). Net investment, which deducts recovery amounts such as equity sales and liquidation from total investment, also decreased by 20.6% to $51.43 billion from $64.79 billion the previous year.
By region, investment declines were notable in Europe and Asia. Europe recorded $10.66 billion, down 32%, and Asia recorded $10.66 billion, down 47.3%. During the same period, North America decreased by 1.8% to $31.32 billion, and Latin America fell by 18.3% to $9.41 billion.
By country, the United States recorded $27.72 billion, down 5.7%, and China recorded $1.87 billion, down 78.1%, mainly in manufacturing investment. The Cayman Islands, known as a "tax haven," also recorded $6.17 billion, down 34.9%.
By industry, all sectors except mining showed a downward trend. The finance and insurance sector recorded $25.66 billion, down 15.5% from the previous year; manufacturing recorded $20.25 billion, down 19.7%; and real estate recorded $4.24 billion, down 42.6%. In contrast, mining increased by 40.1% to $3.38 billion.
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The government emphasized, "The decrease in overseas direct investment last year was the result of the global high interest rate trend continuing, with U.S. interest rates reaching their highest level since 2001, along with factors such as China's economic slowdown and geopolitical risks in Europe. Investment in the U.S., focused on advanced industries such as semiconductors and batteries, continues according to the global supply chain restructuring strategy of our companies."
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