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KOREA REPORT - AUGUST, 2018.
President Trump sought
to ratchet up pressure on China for trade concessions by proposing a higher 25%
tariff on $200 bil worth of Chinese imports. Trump directed the
increase from a previously proposed 10% duty because China has refused to meet
US demands and has imposed retaliatory tariffs on US goods. The higher tariff
rate, if implemented, would apply to a list of goods valued at $200 bil
identified by the USTR in July as a response to China¡¯s retaliatory tariffs on
an initial round of US tariffs on $34 bil worth of Chinese electronic
components, machinery, autos and industrial goods. China said on 3rd that
¡°blackmail¡± would not work and that it would hit back if the US takes further
steps hindering trade, including applying the higher tariff rate.
President Moon¡¯s anti-nuclear
campaign is facing backlash from critics with the recent scorching heat and
massive losses of energy public corporations. Korea¡¯s anti-nuclear
drive was one of Moon¡¯s key pledges during his election campaign in 2017. In
Dec, the government mapped out a new energy plan to increase the portion of
renewable energy to 20% in 2030. Critics say it will increase the burden on the
public in the form of increased electricity charges. On 13th, state-run Korea
Electric Power Corp, responsible for over 90% of Korea¡¯s electricity
generation, announced it posted an operating loss of KW814 bil ($720 mil) in
the first half of the year, a loss for three straight quarters for the first
time in six years. Chung Beom-jin, professor at Kyung Hee University¡¯s nuclear
engineering college, said, ¡°The vague fear of nuclear power plant has destroyed
KEPCO. The losses of KEPCO will ultimately burden the public.¡±
The government¡¯s
assessment that the Korean economy is still on the path to recovery is dented
as figures showing employment and corporate profitability are continuing to
worsen sharply. Data released by Statistics Korea showed the on-year increase in
the number of employees in the country was a mere 5,000 in July, a sharp drop
from 310,000 a year earlier. The figure was the lowest since Jan 2010 when the
number of employees shrank by 10,000 from the year before in the aftermath of a
global financial crisis. The number of jobless people rose by 81,000 on-year to
nearly 1.04 mil last month, with the unemployment rate climbing by 0.3% to 3.7%
over the period, attributing the poor employment mainly to a set of pro-labor
measures taken by the Moon administration to push for its income-led growth
policy. More than 180,000 jobs, mostly low-wage ones, were lost at small businesses
hit hard by labor-friendly steps including steep minimum wage hikes and reduced
limits on working hours.
US Ambassador to SKorea Harry Harris said
on 13th that it is still too early to consider declaring an end to the Korean
War. He stressed
that the US and NK have only begun ¡°the process¡± to achieve the goal of the
¡°final, verified denuclearization of the Korean Peninsula.¡± ¡°With regard to the
end of war declaration, I think it¡¯s too early for that even as we seek
improvement in relations between the North and the South and between the North
and the US,¡± NK demands that the US declare the war over first, while the US
maintains that the declaration can come only after the North takes concrete
steps to denuclearize.
Deputy PM for the
Economy Kim Dong-yeon met with Samsung Electronics (SEC) Vice Chairman Lee
Jae-yong on 6th. Kim reportedly asked Lee to take a leading role in building the
nation¡¯s growth momentum, while Lee said he would try to create jobs. Their
rare meeting ended in an event for show without an in-depth dialogue about
investment strategy or deregulation. Before the meeting, the presidential
office reportedly passed on its concerns to Kim over his planned visit to
Samsung, saying ¡°it is undesirable to be seen begging chaebol for investment
and employment.¡± The media said that the ministry eventually decided not to
announce SEC¡¯s investment and employment plan directly. The government needs
make the first move toward interaction with businesses. SEC is Korea¡¯s largest
company by assets and profits, and world¡¯s No 1 semiconductor manufacturer.
Many countries, developed or underdeveloped, offer all sorts of incentives to
induce investment. If Cheong Wa Dae is truly serious about job creation which
it vowed to pursue as top priority and given the seriousness of unemployment,
it would spare no efforts in doing so. It should be willing to do more than
beg.
The Korean shipbuilding
industry accounted for nearly half of global shipbuilding orders, winning 22
vessels in July, according to Clarkson Research. They recorded orders equal to
970,000 cgt last month, accounting for 48% of a total of 2.01 mil cgt in the
global shipbuilding market. The Korean firms, including HHI, SHI and DSME, won 22 vessels for container ships, LNGCs and VLCCs
out of a total of 52 vessels globally. China came in second with 280,000
cgt (15 vessels), followed by Japan recording 120,000 cgt (six vessels). A
spokesperson of SHI said expectations of a recovery in the global shipbuilding
market has been growing in recent months. ¡°Still, we are keeping an eye on
moves related to protectionism as trade barriers may reduce cargo volumes and,
consequently, shipbuilding orders,¡± he added. Korea retook the lead from China
during the first half of this year in three years. During the Jan to July
period, the Korean shipbuilders recorded 4.96 mil cgt, beating their Chinese
rivals, which recorded 4.39 mil cgt.
Trade war between the
US and China widened [p.2]
The government
approved next year¡¯s budget bill of $423.5 bil [p.3]
President
Moon¡¯s anti-nuclear campaign is facing backlash [p.3]
Park Enna
will take up the ambassador to the UK, as first female ambassador to key nation
[p.4]
Employment and
corporate profitability are continuing to worsen sharply [p.5]
SKorea¡¯s
bibimbap ranked eighth on a list of the world¡¯s 500 best cuisine [p.6]
North and South Korea
marched together at Asian Games [p.6]
A stalled
project to bridge the linguistic gap between 2 Koreas could be revived
[p.7]
UN
Command declined two Koreas¡¯ request to test-run a train on a cross-border
railway [p.7]
Families
separated during Korean War held reunion at Mt Kumkang Resort in 2 group [p.8]
President
Trump told Pompeo to call off his planned trip to Pyongyang [p.9]
US
Ambassador Harry Harris said it is too early to declare an end to the Korean
War [p.10]
Korean
economy decoupled from a robust recovery of the global economy this year [p.11]
DPM for
the Economy Dongyeon Kim met SEC Vice Chairman Lee Jae-yong [p.13]
SEC and SK hynix
dominated global DRAM market with 73.5% combined share in 2Q [p.15]
Posco signed a
contract to acquire mining tenements in Argentina for $280 mil [p.16]
Kakao, the operator
of KakaoTalk, will begin developing a medical big data platform [p.16]
HMC concentrates on
fuel cell and self driving technic [p.17]
BMW Korea
faced escalating criticism as cars repeatedly caught fire on motorways [p.17]
KOSPI slumped on
trade war between the US and China, and Turkish situation [p.18]
Korean shipbuilding
accounted for nearly half of global shipbuilding orders in July [p.20]
HHI and SHI jointly
won 93K cbm VLECs from Delos Shipping [p.22]
HMD has sold all of
its stakes (3.9%) in HHI through a block deal [p.23]
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