We start with our revised brief economic update (BOK new numbers from February, Export performance, Currency fluctuations) and then taking a second chance look at February 16th’s session on where Koreans been investing in 2021-22? About US$190 billion has officially left Korea in 2021-22 – where did it go and how does it affect the Chaebol and Korea’s Financial Sector?
After our usual economic update tracking the degree to which the domestic economy is dipping, we will be looking at Korean investment in the US, EU, China and above all in SE Asia and anywhere else. The headlines of course are taken by the big investments in the US driven partly by the IRA and associated policy measures. But Koreans have been close to out investing anyone in Vietnam, and look as though they will invest more than the US and probably more than China in Indonesia, though one must distinguish between MOUs and pledges to invest and the actual arrival of the finance.
And is the investment only going into big manufacturing or is a sizeable amount of private and public money going into investment in critical minerals or less usual destinations? Largish service companies are also moving outwards particularly to Singapore.
The Yoon administration has a new slogan for public-private investment, public-private strategy and sector working groups – can we find any evidence of them in practice in new economic plans or discussions such as an IPEF strategy. Does the outflow of capital mean that jobs are leaving Korea and domestic sources short of investment?
About half the investment is in industry and services and the other half is financial investment where active investment as opposed to portfolio investment has previously been concentrated on South-east Asia. Are they making money or just buying rather restricted franchises? Now financial investors are moving further afield with the first opening of Mirae-Asset’s office in Australia and other investigations about offices in the EU.
If we put all of this together, what does this all mean for our image of Korean enterprises and financial institutions? Is it that the big fifteen chaebol are streaking ahead of SMEs and MMEs, or are the small companies following the large ones? Equally important can the companies maintain their planned investments in a year of economic downturn. Comments from SK suggest maybe not.
Join us on March 7th to take a second chance opportunity to discuss this.
Watch for our invitation for March 16th when we will be discussing the state of foreign invested enterprises in Korea
“Why we are here? The status of foreign business in Korea in 2023”
Tony Michell Ph.D
Managing Director, KABC Ltd.