Our main session on November 18th took a brief look at economic development, and the second chance session will give a quick update on the economy in November and the Covid surge. In the November 18th session (well before Omicron) we concluded that covid was going to be with us much longer than anyone had expected.
The main topic was a look at the continuing evolution of Korean investment overseas whose momentum is easily overlooked. Throughout the Covid era, Korean companies have continued to move industry out of Korea and to expand production in other parts of the world, most particularly SE Asia, but also in China, India, Europe, and the USA. The amounts are significant. Korean investment into the US is between two and three times US investment into Korea. Samsung is the largest foreign investor in a number of countries, notably Vietnam. Already by 2016 34% of all FDI in Vietnam was from Korea, and Korea has maintained about this level ever since.
In recent years, financial overseas investment has overtaken manufacturing, and while banks have invested in SE Asia, financial houses and funds have invested in the USA and other financial hubs.
Despite the difficulties of travel in the Covid era, Korea has continued to invest overseas more than double the amount of in-bound FDI and this figure is likely to be triple in-bound investment in the period August 2021-August 2022. So in the November session we reviewed Korea’s growth as an investor overseas, the evolution of the chaebol as a multinational force and consider whether this is creating a mid-power effect as in the New Southern Policy. As a result of the change in global tax policy at the G-20 in Rome, the Korean tax office expects to increase tax collection from some of Korea’s multinational investments.
These trade links have crisscrossed with cultural patterns and other ties which should be noted. For anyone who could not make the main session please join our more intimate second chance meeting.
We shall be considering COP-26 in our December session of December 16 when we expect Korean government plans to be fully laid out to turn promises into action, and an overall assessment of what COP-26 has achieved can be made.
Managing Director, KABC Ltd.