Why Korea? Without Lockdown, Korea's 3Q FDI Hits Record High
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Why Korea? Without Lockdown, Korea's 3Q FDI Hits Record High ONE-ON-ONE WITH GUDMUNDUR JONSSON Head of College Dulwich College Seoul Gudmundur Jonsson talks about his experience spearheading an international school in Korea as well as the country’s COVID-19 response measures to ensure a disruption-free learning environment. November 2020 www.kotra.or.kr www.investkorea.org BUSINESS NEWS Foreign Direct Investment FDI pledges Foreign direct investment (FDI) pledges to S. During the January-September period, S. Korea to S. Korea Korea shot up 43.6 percent in the third quarter of won FDI commitments of USD 3.78 billion in the up 43.6 pct 2020 from a year earlier, data showed Oct. 13, as manufacturing segment, up 9.2 percent from the in Q3 despite the manufacturing segment drew a massive invest- previous year, on the back of strong gains from pandemic ment commitment. the electronics and medical industries. The service Asia's No. 4 economy received USD 5.23 billion sector, however, received FDI commitments worth worth of FDI commitments over the July-Septem- USD 8.91 billion, down 9.5 percent on-year, due to ber period, compared with USD 3.61 billion logged the weak performance of the retail and real estate the previous year, according to the Ministry of industries, the data showed. Trade, Industry and Energy (MOTIE). Ulsan Free On Oct. 6, Ulsan City launched a feasibility data collection and analysis to better understand Economic assessment project, partnering with KOTRA to the trends of the hydrogen industry at home and Zones to set up a strategy to help bring foreign investment abroad, business comparative advantage, invest- partner with inflows into three Free Economic Zones—Hy- ment modeling, as well as targeting and support KOTRA to drogen Town, Auto Valley and R&D Biz Val- work for investor relations (IR). ley—across the city. The budget for the research project is estimat- attract FDI This annual project conducted by outsourced ed to total KRW 100 million with KRW 70 mil- researchers and sponsored by MOTIE extends to lion coming from the trade ministry. Industry S. Korean drug A number of major South Korean pharmaceu- the treatment of COVID-19 patients. firms ink major tical companies have recently signed a series Another industry leader, SK Bioscience, also COVID-19 of deals to manufacture vaccines and treatment inked a CMO deal with global pharmaceutical vaccine, drugs for the novel coronavirus, industry watch- company AstraZeneca in July to supply a candi- treatment ers said Nov. 18. date material for a COVID-19 vaccine. Among the front-runners is industry leader In August, the local biotech firm also signed a manufacturing Samsung Biologics Co., which successfully separate contract development and manufactur- deals inked two contract manufacturing organization ing organization (CDMO) deal with Novavax, (CMO) agreements this year. Earlier this week, a U.S. biopharmaceutical company, for a the company also signed a long-term agree- COVID-19 vaccine. ment with U.S. pharmaceutical firm Eli Lilly Under the deal, SK Bioscience will receive and Company to manufacture a novel corona- the antigen manufacturing technology from virus-neutralizing antibody. Under the CMO Novavax and will produce the vaccine at its agreement, Samsung Biologics will provide Eli plant in the country. Lilly's investigational neutralizing antibody for Consumer S. Korea's consumer sentiment rose by the ing marks the largest on-month increase since sentiment rises most in nearly 12 years in October as the eco- April 2009 when the index rose by 20.2 points. by most in nomic outlook improved amid relaxed social It also marks the highest mark since February nearly 12 years distancing measures, central bank data showed when the sentiment index reached 96.9. in Oct. amid Oct. 28. The BOK said the rebound in consumer The composite consumer sentiment index sentiment came as people presented a brighter eased virus (CCSI) came in at 91.6 for October, up 12.2 economic outlook following a slowdown in new curbs points from 79.4 recorded for September, ac- COVID-19 cases. cording to the Bank of Korea (BOK). The read- 02 BUSINESS NEWS Trade & Commerce S. Korea signs South Korea signed what will be the world's total. RCEP trade largest free trade agreement on Nov. 15 after "We note that the RCEP Agreement is an un- pact after concluding related talks during a virtual summit precedented mega regional trading arrangement summit with 14 of President Moon Jae-in and leaders of 14 part- that comprises a diverse mix of developed, de- partner nations ner countries. veloping and least developed economies of the The Regional Comprehensive Economic Part- region," Moon and his counterparts said in their nership (RCEP) involves 10 members of the As- joint statement. sociation of Southeast Asian Nations (ASEAN) They added, "We believe that RCEP, being the as well as South Korea, China, Japan, Australia world's largest free trade arrangement, represents and New Zealand, and their combined gross do- an important step forward toward an ideal frame- mestic product accounts for a third of the world's work of global trade and investment rules." FTA partners S. Korea's free trade agreement (FTA) partners trade surplus of USD 40.4 billion with its FTA help S. Korea have played a key role in helping the country partners in the January-September period, ac- continue trade maintain its trade surplus and volume this year cording to the data from the Korea Customs Service. surplus amid amid the coronavirus pandemic, government data In contrast, S. Korea posted a USD 12.8 billion virus showed Oct. 28. trade deficit with non-FTA partners, resulting in Asia's fourth-largest economy registered a an overall surplus of USD 27.6 billion. Government & Policy In budget President Moon Jae-in declared a full-fledged said regarding the direction of the government's speech, Moon policy drive on Oct. 28 for the clear recovery of fiscal operation plans. says time for S. Korea's economy, coupled with the firm stabi- He emphasized the importance of maintaining full-scale push lization of the COVID-19 situation here. and creating jobs, saying it is a starting point to revitalize In his parliamentary speech on the state bud- for an economic recovery, as well as the most get, Moon assured lawmakers that the govern- important issue associated with people's liveli- economy ment would create a record high budget, pro- hoods. posed for 2021, with a focus on creating jobs, He cited the Korean version of the New Deal reinvigorating the economy and winning the aimed at transforming the nation into a "paceset- fight against the coronavirus. His administration ting" economy via job creation and the develop- has drawn up a KRW 555.8 trillion (USD 469.8 ment of future growth engines, especially in dig- billion) budget bill, a 8.5 percent hike from this ital and environment friendly sectors, a project year. to cost a total of around KRW 160 trillion. "It's time to operate full-scale measures to in- Moon said S. Korea is proving to be a country vigorate our economy to put it on a normal track "strong in crises," as it has done better so far in starting next year," he said during the annual both virus control and economic stimulus than address at the National Assembly. He described many other countries. a clear economic recovery and a win in the anti- S. Korea's economy, the fourth largest in Asia, virus fight as "two rabbits" that S. Korea should grew in the July-September period mainly on a catch at the same time without fail. rebound in exports after having contracted for "First, (the government) will put its priority on two consecutive quarters, according to the Bank a quick and strong economic recovery," Moon of Korea. Source: www.investkorea.org, Yonhap News Agency 03 NEWS HIGHLIGHT Without Lockdown, Korea's 3Q FDI Hits Record High FDI pledges to S. Korea hits quarterly record high in Q3 to foreign investors because it is successfully responding to and protecting against the COVID-19 crisis, and because it The Ministry of Trade, Industry and Energy of Korea is continuing its industrial and economic activities without announced that country’s foreign direct investment (FDI) implementing lockdown measures. in the third quarter of 2020 recorded USD 5.23 billion on A recent OECD report noted that, “the Korean economy reporting basis, the largest quarterly amount in history. This has experienced a serious recession due to the COVID-19 figure is 43.6 percent up from the third quarter of 2019. pandemic, but the level of its economic contraction is very The cumulative investment attraction amount from the first low compared to those of other OECD member countries, to the third quarter of 2020 reached USD 12.89 billion, down thanks to its prompt and effective policy development and 4.4 percent from the same period in the previous year as implementation.” In fact, Korea’s economic growth rate in reported. The figure plunged by 22.4 percent in the first half 2020 is expected to be the highest among OECD member of this year compared to the same period last year due to the countries and second-highest in the Group of 20. effects of the COVID-19 pandemic, but the amount increased significantly in the third quarter, reducing the percentage of Korea’s flagship and future growth industries decrease to 4.4 percent. Such figures stand in contrast to the current global trend of In particular, demand for investment with the aim to decreasing FDI due to the COVID-19 pandemic.