Foreign direct investment by South Korean companies reached record levels in 2018, a rise that has continued through the first quarter of 2019.

South Korean global companies are increasing their international reach, while adjusting to the challenges thrown up by the US-China trade dispute. The country’s companies announced 304 greenfield projects in 2018, including a record number of projects in the US (46), as well as Germany (16), and Russia (15). This is alongside their traditional preferred investment destinations of Vietnam (35) and China (34), according to greenfield investment monitor fDi Markets.

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In terms of capital expenditure, South Korean companies’ value is estimated in the order of $28.7bn. While not a record in itself, this is still one of the highest levels since 2003, fDi Markets records began.

South Korea’s manufacturing powerhouses such as Samsung, Hyundai Motor, LG, Lotte Group and Hankook Tire led the charge, combining for about one third of the announced projects and half the capital expenditure, according to fDi Markets.

Headline FDI figures, which include materialised greenfield investment, as well as cross-border M&A and intracompany operations, are consistent with data on announced greenfield FDI projects as figures from the Ministry of Economy and Finance reported record levels of overseas direct investment by South Korean companies and 2018, as well as in the first quarter of 2019.

The largest single destination country for overseas investment by South Korean firms with 15.1% of the country’s 2018 announced ODI was the US, according to fDi Markets. This aligns with the ‘America First’ policy of US president Donald Trump, which is lifting trade barriers to correct the US trade deficit with Asia and the rest of the world, while encouraging global corporations to set up shop in the US by passing business-friendly reforms such as the 2017’s Tax Cuts and Jobs act.

In May Mr Trump announced on Twitter the $3.1bn investment made by Lotte Group in a petrochemical plant in Louisiana, one of the biggest investments by a South Korean company into the US. Lotte also released a statement to say it will increase investments in hotels in the US. Seoul unveiled plans to invest a combined $17.3bn in the US by 2021, according to a November 2017 report by Nikkei Asian Review.

Overseas investment by South Korean companies is running at a record pace against a backdrop of a rapidly slowing economy at home. The nation’s exporters, the main driver of its economic miracle for decades, are now navigating stormy waters as global value chains, particularly in Asia, are subject to the unfolding trade feud between the US and China. South Korea’s GDP grew by 1.7% in the first quarter of 2019, the first time in nearly a decade economic growth dipped below 2%, according to figures from the central bank.