January 13, 2021 11:18
Foreign direct investment into Korea declined for the second year running last year as the coronavirus pandemic crimped ventures around the world, and Japanese investment halved.
Foreign investment on a reported basis declined 11.1 percent from $23.3 billion in 2019 to US$20.75 billion last year, the Ministry of Trade, Industry and Energy said Tuesday.
The actual amount invested fell even more by 17 percent to $11.1 billion. Investment from Japan halved from $1.4 billion to $700 million over the same period amid strained bilateral relations.
The manufacturing industry suffered a sharper drop from $8.2 billion to $6 billion than the service industry (from $14.8 billion to $14.4 billion).
A growing number of foreign businesses packed up and left.
According to the Korea Institute for Industrial Economics and Trade, 173 foreign businesses closed their operations in Korea in 2019, up from 58 in 2016, 80 in 2017, 68 in 2018.
Forty-five of the companies were Japanese, 35 from the U.S. and 17 from Hong Kong.
The big business lobby Federation of Korean Industries cited scrapped tax incentives for foreign companies, the shorter working week and the minimum-wage hike as the main factors that drove them away.
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