It is encouraging that foreign direct investment in the country has continued to increase. New FDI that was pledged to or arrived in Korea last year rose by 30.6 percent and 17.1 percent from the previous year, reaching highs of $19 billion and $11.52 billion, respectively.

Announcing the figures Monday, the Ministry of Trade, Industry and Energy said the record amount of FDI, despite many unfavorable conditions confronting the global economy, was proof of foreign investors’ confidence in Korea’s economy.

Its statement may not be wrong. But the single largest factor behind the surge in foreign investment here has been a massive inflow of money from China. Newly pledged FDI from China jumped by 147.2 percent on-year to $1.19 billion last year. Investment pledges from China are expected to increase at a steeper pace in 2015, if a bilateral free trade agreement goes into effect within the year as planned.

The surge of Chinese capital has raised both concerns and expectations here regarding its impact on Korea’s economy.

What is especially worrisome for Korean officials is that Chinese investment has concentrated on real estate, mostly on the southern resort island of Jejudo. Summing up this mood, Jeju Gov. Won Hee-ryong recently said that underlying the island residents’ sentiments was “fear” regarding the flood of money from China. His remark seems somewhat exaggerated, as the proportion of land owned by Chinese investors is still negligible despite their increased investment.

But it is necessary to try to channel Chinese money into the areas that will help boost the country’s economy, which has been struggling with slumping domestic consumption. In this regard, it is desirable that the scope of Chinese investment here is being expanded to cover the cultural content industry, food sectors, and tourism and leisure facilities.

A cautious review will be needed to prevent Chinese companies’ acquisition of local high-tech firms from weakening Korea’s competitiveness over the long term.

Economic policymakers should strengthen efforts to ensure that FDI in the country continues to grow in a more balanced way. It is desirable to prevent the potential negative impact of a growing reliance on Chinese investment by attracting more investors from other countries, including Japan. New FDI pledges from Japan dropped by 7.5 percent on-year to $2.49 billion last year, indicating that the diplomatic friction between Seoul and Tokyo has spilled over into the economic field.

A broad range of measures should be taken to cut regulations to facilitate massive investment by foreign investors, including the establishment of research and development centers or regional headquarters of multinational corporations.