[THE INVESTOR] Cross-border investment between South Korea and China has risen sharply this year, fanned by the Korea-China free trade agreement, industry data showed on July 13.

The trade pact took effect in December 2015.

According to the Kora International Trade Association, South Korean entities invested US$2.2 billion in China during the first five months of the year. The figure is 12.2 percent higher than that recorded during the same period last year. 

At the rate recorded in the January-May period, South Korean investment in China throughout the year is estimated to reach US$ 5.3 billion. In comparison, Japanese entities invested US$ 1.47 billion in China during the first five months of the year.

The figure for Chinese entities’ investment in South Korea remains lower than South Korean investment in China, but is increasing at a much higher rate.

According to the Korea Trade-Investment Promotion Agency, Chinese entities invested a total of US$ 710 million in South Korea during the first half of the year, rising 79.5 percent from a year ago. By sector, the service industry saw the largest influx of Chinese capital followed by manufacturing. The service industry saw US$ 389 million of Chinese capital invested during the first six months of the year, while the figure for the manufacturing sector came in at US$ 313 million.

By Choi He-suk (cheesuk@heraldcorp.com)