We start with a brief review of trends and patterns in the economy, somewhat hard to judge YoY when the Chinese New Year shifts from Jan to Feb at the same time. January figures would suggest a slight improvement in the domestic economy if it were not for the drop in retail sales YoY of -3.4%. Manufacturing in January was up partly spurred by Galaxy 24 production. February export figures show a drop in auto exports which may just be a Sollal blip.  March 21 is also our last session before the April 10 election so the progression of public opinion as measured by the polls and the upheavals in the parties big and small will be reported and the group will be invited to speculate on the outcome.

We will turn then to discuss the current feelings of foreign business in Korea. Back in 2014 there was a debate about whether staying in Korea was profitable, and a number of companies dropped out, thereafter we have measured the mood year by year. For existing companies the recently published survey of the European chambers in 2023 gives the picture of a year in which foreign companies saw their enthusiasm for Korea whether measured in sales or profit slip slightly. They also reported that Korea in 2023 was somewhat less central in their company’s strategy. Regarding reforms there was scepticism about reforms promised this year. Amcham scorecard gives a briefer overview with similar results.  Possibly American companies are more enthusiastic about business in Korea and this is reflected in the rise in exports going to the US over the past 14 months.

There is a steady increase in the value of FDI pledged to Korea and this year Korea’s goal is to achieve US$35 bn. (2023 US$32.5) So we shall be looking at which sectors have attracted more investment in 2023 and from which countries?  In general US pledges of investment exceeded European pledges a reversal of recent years.

However what is happening in the offshore wind and renewable sector makes Korea looks much more old school than in other sectors and companies are thinking about giving up including several majors.  Amcham’s list of issues for 2024 includes RE100.

In 2022 I wrote “KABC’s opinion is that the Republic of Korea has come of age in the last three years and has a higher global standing in nearly every field of activity and this should help raise interest in the Korean market and consequently more investment”   During 2023 KBF members collectively produced the thesis that Korea was a safe haven for investment and that for certain classes of product Korea could be the plus 1 in a China plus 1 strategy. This does not negate the fact that Korea is still considered a hard market to do business in successfully.

Whether you find Korea a hard market or a satisfying market, join us in person or online for this popular session to witness the KBF advantage in developing an understanding in the Korean market and its future direction.

Yours sincerely