South Korea's US Investment Surges Amid Manufacturing Concerns
Concerns are growing over South Korea's escalating investment in the United States, which may undermine its domestic manufacturing base. Experts warn of the potential economic repercussions, as significant capital outflow to the US contrasts with limited domestic spending, potentially leading to industrial decline.
- Country:
- South Korea
As trade negotiations between South Korea and the United States remain at an impasse, worries are escalating about the potential hollowing out of Korea's manufacturing industry amidst increasing US investments, according to a report by Pulse, the English service of Maeil Business Newspaper Korea.
Professor Hur Jung of Sogang University voiced concerns at a National Assembly forum, highlighting the difference in impact between past and present foreign direct investment (FDI) waves. The recent rise of FDI in the US has seen declines in both manufacturing jobs and value-added output in Korea, unlike the FDI surge in China between 2000 and 2010, which benefited Korea's manufacturing sector.
The Korean government's USD 350 billion investment package with the US and additional commitments totaling nearly USD 500 billion have drawn criticism for overshadowing domestic spending. Concerns center around the potential risks to foreign exchange stability and the domestic industry, paralleling Japan's agreement to let the US dictate significant investments. Calls for policy adjustments to reinforce Korea's manufacturing base have intensified.
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