Overview of Economic Interaction between Korea and Northern Territory

Transcription

1 Overview of Economic Interaction between Korea and Northern Territory 6 July, 2017 KOTRA Sydney, Director General Gang Suk, Suh

2 Contents 1. Current situation of Korean Economy - Korea s Economy - FDI in KOREA 2. Economic interactions between Korea and Australia(NT) - General Figures & Economic Data - Trade - Investment - Why invest in Korea? - Where to invest in Korea? 3. Global Link to Success (Invest KOREA)

3 Current situation of Korean Economy - Korea s Economy - FDI in KOREA

4 Why Korea Key Economic Indicators 11th GDP USD 1.5 T (2016) 8th Trade Volume USD B (2015) 4th 8th 8th Current Account Balance USD 98.7 B (2016) Foreign Exchange Reserves USD B (2016) No. of Listed Companies (Korea Exchange) 1,948 (2015) *Source: IMF, WB, WFE, BOK, Korea Exchange

5 Korea s Economy Economic Growth GDP Growth Rate( 06~ 16) 20% 15% 10% 5% 2.8% 6.7% 0% -5% -10% % 0.8% *Source: OECD(December 2016) "Economic Outlook No.100 November 2016"

6 Korea s Economy Fiscal Stability 120% 100% 80% 60% 40% 20% The Ratio of Public Debt to GDP( 06~ 16) 38.5% 107% 97% 89% 68% 46% 45% 0% *Source: IMF(April 2017) World Economic Outlook Database

7 Korea s Economy Unemployment Unemployment Rate( 06~ 16) 10.1% 14% 12% 10% 8% 6% 4% 2% 0% 3.7% % 4.8% 4.3% 4.6% 3.1% *Source: The Bank of Korea(2017), World Bank

8 Korea s Economy Stock Market (Change) 80% 60% 40% 20% 0% -20% -40% -60% Nikkei 225 Index (^N225) - Index Value FTSE Straits Times Index (^FSSTI) - Index Value Hang Seng Index (^HSI) - Index Value KOSPI 200 Index (^KS200) - Index Value *Source: Capital IQ(May 2017)

9 Korea s Economy Stable Sovereign Credit Rating AA (Aa2) AA- (Aa3) A+ (A1) *Source: Moody's, S&P, Fitch(As of April 19, 2017)

10 Korea s Economy Export Growth World s 8th Largest Exporter B (1996) B (2006) B (2016) *Source: KITA(2016)

11 Korea s Economy FTA with 52 countries World s 3rd Largest FTA Territory( 16) EFTA 82 E.U. 985 Canada 88 Turkey 61 China India 158 1,097 2,114 Vietnam 451 Singapore 213 U.S. ASEAN Colombia 1, Peru Australia 227 New Zealand 24 Trade Volume as of 2016 (USD 100 Million) 25 Chile 53 *Source: Ministry of Trade, Industry & Energy, Korea International Trade Association 11

12 Korea s Economy FTA network Korea signed FTAs with 52 countries (3 rd largest FTA network) FTA History of Korea Korea & Chile : Apr, 2004 Korea & Australia : Dec, 2014 Korea & Singapore : Mar, 2006 Korea & Canada : Jan, 2015 Korea & EFTA : Sep, 2006 Korea & China : Dec, 2015 Korea & ASEAN : Jun, 2007 Korea & New Zealand : Dec, 2015 Korea & India : Jan, 2010 Korea & Vietnam : Dec, 2015 Korea & EU : Jul, 2011 Korea & Colombia : Jul, 2016 Korea & Peru : Aug, 2011 Korea & Central America : Nov, 2016 (agreed) Korea & USA : Mar, 2012 More than five FTAs are under negotiations Korea & Turkey : May, 2013 * Israel, Ecuador, Korea-Japan-Korea, RECP that includes Korea, Japan, China, Australia, New Zealand and India

13 FDI in Korea FDI Statistics 21.3 Billion (USD Million) 25,000 20,000 15,000 10,000 5, *Source: Ministry of Trade, Industry & Energy(based on declared amount)

14 FDI in Korea FDI by Region and Country( 16) FDI in Korea by Region FDI in Korea by Country Canada 2% U.K. 2% Germany 1% North Ameri ca 25% Other 2% E.U. 35% Asia Ocean ia 38% Japan 6% Netherlan ds 7% Hong Kong 10% China 10% Singapo re 11% U.S. 18% Others 33% *Source: Ministry of Trade, Industry & Energy(based on declared amount) 14

15 FDI in Korea FDI by Sector and Industry ( 16) FDI in Korea by Sector FDI in Korea by Industry (USD Million) Electricity Gas Water Construction 3 % Manufacturing 24% Chemical engineering 1,455 Electricity Electronics 1,069 Transportation machinery 915 Machinery Equipment 558 Biotechnology Medicine 264 Service 73% (USD Million) Finance Insurance 6,224 Business service 3,707 Real estate Leasing Service 2,394 Wholesale/Retail(Distribution) 1,459 Food Accommodation 815 *Source: Ministry of Trade, Industry & Energy(based on declared amount)

16 FDI in Korea FDI by Investment Type( 16) Ratio by Investment Type Investment Type by Year M&A 30 % Greenfield 70% 23% 34.2 % 42% 77% 65.8 % 58% 32.5 % 67.5 % 30% 70% Greenfield *Source: Ministry of Trade, Industry & Energy(based on declared amount)

17 FDI in Korea Foreign-Invested Companies in Korea (2016) (1997) (1990) *Source: KOTRA(2016) 17

18 FDI in Korea Foreign-Invested Companies in Korea 223 of 500 companies invested in Korea Major Industries Industrials 8 Technology 23 Transportation 8 Energy 24 Retail 5 Wholesale Chemicals 9 8 Hotels, Restaurant & Leisure 5 Financials 52 Tele- Communications 9 Materials 8 F&B, Tobacco 10 Motor Vehicles & Parts 27 Health Care 11 * Source: Fortune, Invest KOREA(2015)

19 FDI in Korea Reasons for Investing in Korea Reasons for Investing in Korea Entry into Korean market Market growth potential Global networks Technology, R&D, innovation Talented workforce Gateway to adjacent markets High productivity Easy delivery of parts FTA network Government incentives Customer requests 12.7% 9.4% 8.8% 8.5% 6.2% 3.9% 3.6% 1.3% 28.3% 44.6% 39.4% (the combined percentage of first and second choice) *Source: Invest KOREA(April 2016)

20 FDI in Korea Sales of Foreign-invested Companies in Korea( 16) Key Sales Channels Key Export Markets Domestic market Export 84.5% 15.5% China Japan U.S. Germany Hong Kong Singapore Other 28.2 % 23.9 % 14.9 % 3.9 % 2.8 % 2.5 % 23.7 % *Source: Invest KOREA(January 2017) "2016 Survey on the Management Status of Foreign-invested Companies"

21 FDI in Korea Economic Contributions of Foreign-invested Companies('16) 21% 11.8% 5.8% 6.4% Sales Employment Exports R&D *Source: Invest KOREA(January 2017) "2016 Survey on the Management Status of Foreign-invested Companies"

22 Economic Cooperation between Korea and Australia(NT) - General Figures & Economic Data - Trade - Investment - Why invest in Korea? - Where to invest in Korea?

23 Economic Cooperation Korea & Australia (NT) Economic Data of Korea and Australia(NT) (US$B) 01 Index Korea Australia NT Land Area (ratio) 99,720 km² (1) 7,692,024 km² (77) 1,421,000 km² (14) Population (ratio) 51,600,000 (211) 24,128,876 (99) 244,880 (1) GDP Nominal 1,378 1, GDP Growth Rate 2.9% 1.7% 2.7% Trade Volume (2016) Export Import *Source: World Bank, KITA-Korea International Trade Association, RBA-Reserve Bank of Australia, BOK-Bank of Korea, Global Trade Atlas-gtis, Trading Economics, Northern Territory Government, Department of Foreign Affairs and Trade

24 Economic Cooperation Korea & Australia (NT) Korea s export and import to the world 02 EXPORT (2016) World s 9 th country to exceed 1 trillion USD trade in volume : $495,426 M (Increased by 20 times in the last 30 years) - main goods : semiconductor, vehicle, vessel, appliance and etc IMPORT (2016) - volume: $406,193 M (recorded current account surplus for last 17 years. excluding 2008) - main goods : crude oil, natural gas, petroleum products and etc ($M) 700, ,000 Export Import 500, , ,000 Exceed 1 trillion USD 200, , *Source: World Trade Atlas

25 Economic Cooperation Korea & Australia (NT) Korea s export to Australia 02 Korea s export(australia s import) increased by 2 times in 10 years Trading Relationship - Korea s 12 th -largest export market / Australia s 6 th largest import market - Korea s export to Australia decreased by 30% and ranked down to 6 th place from 4 th place of 2015 Main goods : Mineral Fuel/ Oil/ Wax, Vehicles, Electric Machinery, Nuclear Reactors, Boilers, Machinery and etc ($M) 12,000 10,000 8,000 6,000 4,000 2, % 5.0% 4.0% 3.0% 2.0% 1.0% % Portion of Australia in Korean export Portion of Korea in Australian import Total Export *Source: World Trade Atlas

26 Economic Cooperation Korea & Australia (NT) Korea s import from Australia 02 Trading Relationship Korea s import(australian export) gradually decreasing after Korea s 7 th largest import market / Australia s 3 rd largest export market - Impact on Australian economy lower export in general Main goods : Mineral Fuel, Oil, Ores, Slag and Ash, Meat and Edible Meat Offal, Aluminum, Sugars and Sugar Confectionary, Cereals and etc ($M) 30, % 25,000 20,000 15,000 10,000 5, % 6.0% 4.0% 2.0% 0.0% Portion of Australia in Korean import Portion of Korea in Australia export Total Trade *Source: World Trade Atlas

27 Economic Cooperation Korea & Australia (NT) Korea s export to Northern Territory 02 Trading Relationship Korea s export(nt import) has decreased by 40% in NT s import volume from Korea increased by 31.2% in 5 years - Thailand, Japan, Singapore, China and US are the top five import countries NT s main imports : Live animals, Aluminium ores & conc, Crude petroleum, Other ores & concentrates and Beef *Source: ABS, Foreign trade, Qeensland Government *Source: Department of Foreign Affairs and Trade

28 Economic Cooperation Korea & Australia (NT) Korea s import from Northern Territory 02 Trading Relationship Korea s import(nt export) has gone down by 13% in NT s exports to Korea decreased A$17M, from A$133M to A$116M NT s main imports : Iron, steel, aluminium structures, Tubes & pipes of iron or steel, Refined petroleum, Heating & cooling equipment & parts *Source: ABS, Foreign trade, Qeensland Government *Source: Department of Foreign Affairs and Trade

29 Economic Cooperation Korea & Australia (NT) Korean investment into the world 03 Trend by industry Korea s outbound FDI, reached 30 billion USD in Weight : Manufacturing(23.8%), Finance(19.5%), Real Estate(17.4%), Sales(16.3%), Mining(6%) - Investment in 2016 in major industries has all increased from the previous year except Mining Trend by country - Top 10 countries : US(36.8%), China(9.4%), Cayman Islands(9.2%), Vietnam(6.5%), HongKong(4.3%), Singapore(3.2%), Saudi Arabia(2.5%), Australia(2.4%), UK(2.2%), Turkey(2.1%) ($M) 40,000 30,000 Total FDI of Korea 20,000 10,000 0 *Source: The Export-Import Bank of Korea

30 Economic Cooperation Korea & Australia (NT) Korean investment to Australia 03 Attractive investment sectors of Australia for Korean investors Real estate - Korean financial institutions have invested in Australian buildings. Government leasing building-ato, Department of Human Services, Four Seasons hotel, Woolworth head office and etc - Attractiveness : high transparency, steady economic growth, currency, tax benefit Infrastructure - WestConnex Project(NSW) : Australia s biggest infrastructure project. Samsung has been involved since 1 st project in A number of Korean banks show their interest to invest in 3 rd project Mining - Korea invested a total of $9,267M to the Australian mining industry for the last 10 years - (Jun 2017) Korean consortium Newlake Alliance Management and JB Asset Management is selected preferred bidder in Arrium bids *Source: The Export-Import Bank of Korea

31 Economic Cooperation Korea & Australia (NT) Australian investment to Korea 03 Australia invested $507M to Korea in last five years By industry - Weight : Service(72.8%), Manufacturing(24.0%),Electricity, Gas and Construction(2.8%) - Finance/Insurance sector ranked top by 40.1% in service industry followed by business service(23.9%), real estate leasing(15.4%) and wholesale and retail(9.6%) ($M) % % 0.80% 0.60% 0.40% 0.20% % Portion of Australian investment into Korea FDI from Australia *Source: Ministry of Trade, Industry and Energy

32 Economic Cooperation Korea & Australia (NT) Why invest in Korea? 04 Reasons to invest Korea & Successful case Advantages to invest Korea - Geographic advantage : Gateway to Northeast Asia(20% of Global GDP) - Supportive business environment * Ranked in 4 th for ease of doing business by World Bank(2015) - High competitiveness in innovation * Ranked in 1 st for most innovative country in the world(bloomberg 2014) Prostar Capital acquired 95% of Kyungnam Energy s shares - Amount of equity acquisition : KRW 500b (May 2017) * Kyungnam Energy ("KE") is the largest independent city gas distribution in South Korea and supplies city gas to over 600,000 residential, 900 industrial, and 50,000 commercial customers Australia s investment into Korea remains $79M(2016) which is only 0.37% of total inbound FDI to Korea. Renewable energy, infrastructure, agro-livestock fields including LNG and beef are still prospective field to invest.

33 Economic Cooperation Korea & Australia (NT) Where to invest in Korea? New & Renewable Energy The total supply of Korea s new and renewable energy increased by 98.2% in 5 years ( ) Competitiveness - Strong growth potential : The proportion of new & renewable energy to primary energy in Korea, only 0.7% - Technological Prowess : Technological level of Korea s new & renewable energy industry, 81.7% on average

34 Economic Cooperation Korea & Australia (NT) Where to invest in Korea? Biopharmaceutical Korea s pharmaceutical market and production size : USD 16.4B (2015) Competitiveness - Biopharmaceutical powerhouse - New drug development : A total of 27 domestically-developed new drugs gained approval - Biosimilar development : Korea, Chair of the Working Group on Biosimilar Regulatory Harmonization

35 Economic Cooperation Korea & Australia (NT) Where to invest in Korea? Food & Beverage Production scale of the Korean food industry - Average annual growth rate : 6.9% (since 2005) Competitiveness - Technology : Korea s technological prowess in agri-food industry, approx. 70% of advanced countries. - R&D Capability : A mid to upper level of capability in food industry *Source: Korea Institute of Planning and Evaluation for Technology in Food, Agriculture, Forestry and Fisheries

36 Global Link to Success - Invest KOREA -

37 5. Global Link to Success (Invest KOREA)

38 FOREIGN Thank You INVESTMENT WEEK 2014 Global Business Platform Invest in KOREA, Invest in Success! October 29-31, 2014 RSVP Business Forum Networking 1 :1 Meeting Site Tour KOTRA, Sydney LOTTE Gang Hotel Suk, World Suh Seoul, Republic of Korea Foreign Company Day graham.worthington@kotra.org.au Korea Business Center, Sydney Level 24, 1 Market Street, Sydney, NSW 2000 Tel : +61 (0) suh@kotra.or.kr