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    Korea
     Sep 16, 2005
Overseas investment exceeds foreign investment

SEOUL - South Korean overseas investment surpassed foreign investment in Asia's fourth-largest economy in the first half of the year, a government report showed Wednesday, raising concerns about the so-called hollowing out of the local manufacturing sector.

Local manufacturers invested a total of US$1.92 billion overseas in the first six months of the year, $762 million higher than the amount of foreign direct investment into the country, according to a report submitted by the Finance Ministry to the National Assembly. South Korean manufacturers' overseas investment has been hovering above foreign investment between 2001 and 2003, as local companies rushed to build plants and transfer production bases in wage-competitive overseas markets.

Local manufacturers' investment overseas reached $5.05 billion last year, lower than $6.21 billion foreign investment, according to

the report. The report said that the industrial hollowing out, stemming from continued overseas relocation of South Korean manufacturers, may cut the country's industrial competitiveness and make the employment situation here worse.

According to the report, the manufacturers' contribution to economic growth in the second quarter was 45%, and the segment accounted for about 18% of all employment in the country as of the end of July.

(Asia Pulse/Yonhap)

 

 
 



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