(AFP) – Feb 12, 2008

SEOUL (AFP) — South Korea's overseas direct investment increased dramatically last year as local firms rushed to develop natural resources and new markets, a government report said Wednesday.

According to the Ministry of Finance and Economy, South Korean companies invested 27.64 billion dollars in foreign countries last year, up 49.2 percent from a year earlier.

"Foreign direct investment has been increasing fast over the past few years as a result of eased regulations, mounting efforts to develop overseas resources and business firms' globalization tactics," the report said.

China remained as South Korea's largest investment destination, receiving 6.49 billion dollars or 23.5 percent of the 2007 investment. From a year earlier, South Korea's investment in China increased 43.8 percent.

The United States came next with 15.7 percent or 4.35 billion dollars, up 100 percent from the previous year.

Vietnam was third, attracting 9.2 percent, followed by Hong Kong which received 5.7 percent of the 2007 investment by South Korean companies.

South Korea's foreign direct investment had slumped in the aftermath of the 1997 financial crisis. But it has improved over recent years.

However, South Korea's overseas investment accounted for only 5.3 percent of its gross domestic product at the end of 2006, far less than the average 30.7 percent for advanced countries, the ministry said.

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