Steady flow of S. Korea FDI into Malaysia
Investment in manufacturing sector totalled RM95mil as of August
SEOUL: South Korea’s foreign direct investment (FDI) in Malaysia’s manufacturing sector totalled US$23mil (RM95mil) as of August, as the republic acknowledges the country’s strength in the industry.
Overall, South Korea’s total FDI in Malaysia reached US$35mil (RM145mil) during that period, said Asean-Korea Centre (AKC) secretary-general Lee Hyuk.
Last year, South Korea was the sixth biggest investor in Malaysia’s manufacturing sector.
Lee said the progress on South Korea-Malaysia ties had been most notable in the trade sector ever since South Korean president Moon Jae-in kicked off the New Southern Policy last year.
Under the policy, Seoul is pushing for greater economic ties with Asean to reduce its dependence on traditional trade partners such as China and the United States.
Asean is South Korea’s second biggest trading partner after China. Trade volume recorded US$150bil last year.
The target is to raise bilateral trade between Asean and South Korea to US$200bil by 2020.
Between January and October this year, the bilateral trade volume between Asean and South Korea hit US$132bil.
“Malaysia is South Korea’s fourth largest trade partner among the 10 Asean countries with a bilateral trade volume of US$16.8bil (RM70bil) last year.
“The biggest export item to Malaysia is electrical equipment and its components, mineral fuels, and machinery components,” he told a group of Asean journalists from Asia News Network who visited Seoul last week.
The AKC is an inter-governmental organisation whose role is to spur economic and socio-economic cooperation between Asean members and South Korea.
It has carried out a wide range of programmes on trade, culture, tourism and investments.
Besides organising trade fairs and facilitation workshops, its most notable activity is the annual Asean Connectivity Forum which serves as a platform to introduce energy, transportation and ICT projects in Asean countries to South Korean businesses.
The forum also seeks to connect South Korean private companies with the relevant government agencies in Asean.
Lee said the biggest challenge faced by South Korean firms wanting to do business in Asean is to find bankable and commercially viable projects.
“Profitability of a project is a key factor to get loans from financial institutions. Clear regulations and transparency in law enforcement are required to attract more South Korean companies,” he said.
Lee also acknowledged that there was an imbalance of sorts in South Korea’s trade relationship with each Asean member.
He spoke of a “Vietnam rush” among South Korean companies, with bilateral trade volume between Vietnam and South Korea taking up more than half of that between the region and South Korea last year.
“We need to expand and balance our trade volume with other Asean countries,” he said.