South Korea's position in the global economy

摘要

South Korea remains relatively open to foreign direct investment, as it recognises the role that foreign firms play in creating jobs and adding to economic growth. The country's extensive free-trade agreements provide a regulatory environment conducive to attracting foreign capital. The government aims to build South Korea into a global powerhouse of high-tech industries by investing in the already excellent digital and physical infrastructure, fostering the development of indigenous start-ups and encouraging research and development. However, rising wages, the relatively low level of corporate transparency, the prevalence of unofficial government meddling and negative public sentiment towards foreign ownership of domestic assets have remained as obstacles for investors. South Korea has already become one of the first OECD countries to restore its economy to its pre-coronavirus (Covid-19) size. Merchandise exports will recover in 2021 as global trade growth picks up from its trough in 2020. South Korean electronic devices and healthcare products will remain in high demand, and outbound shipments of vehicles and automotive parts will also recover. However, the external sector will remain vulnerable to intensifying US-China conflict in trade and technology, as well as to increasing competition from regional neighbours, especially in the electronics and automotive industries.