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Korea Report - April, 2017.

Chinese President Xi Jinping was belatedly reported to have said during his summit talks with US President Donald Trump, “Korea actually used to be a part of China.” His remark was revealed by Trump in an interview with the Wall Street Journal, but what Xi said precisely has so far not been confirmed. It is hard to believe that US president quotes such a sensitive remark made by his counterpart. But if Xi actually said so, his words show how the Chinese leadership perceives Korea and its history. Xi’s distorted view on history cannot be overlooked. Korea has never been a subordinate state of China, though it was influenced by China. China opposes the deployment of the THAAD anti-missile system, no matter what Korea says. It has even economically retaliated over the system. Xi has to say China was a part of Mongolia, Manchuria in old days and Old Korea in ancient time, even a part of Japan recently.

US President Donald Trump on 28th called for SKorea to pay $1 bil for a missile shield’s deployment here, and vowed to renegotiate a bilateral FTA, stirring heated reactions in SKorea, stressing the system is intended to protect SKorea. Seoul refuted his argument on THAAD, saying it has not been “informed” of any payment. The deployment plan had also been settled in line with the SKorea-US Status of Forces Agreement, which governs the stationing of 28,500 US troops here. “Our basic position remains unchanged that according to SOFA, we provide the land and related facilities and the US will pay for the THAAD system’s operation and maintenance costs,” the Defense Ministry said. Security chiefs of SKorea and the US reaffirmed the initial agreement on US advanced missile defense system that Washington would shoulder expenses for deploying and operating the weapon system. Trump’s security adviser praised the US alliance with SKorea as the “strongest alliance” and as Washington’s strategic priority in the Asian-Pacific region, saying that the US will be with SKorea “100 percent.” It looks like watching a Western movie. A gunman on the mad horseback shooting his shiny gun into the air with the aim lost.

HHI racked up KW10.0756 tril in sales while operating income in the first quarter stood at KW618.7 bil, 90.3% up on-year, posting profits for 5 straight quarters. HHI mainly attributes the profit increase to KW127.1 bil operating profits from HHI’s Shipbuilding Division which is 251% up on year, thanks to an increased building volume of high value-added ships. HMD posted operating profit of KW51.2 bil ($45.3 mil, provisional) for the first three months of 2017, down by 11.1% on-year and up by 36.8% on-quarter. HMD saw a decrease in its revenue to KW985.6 bil during the same period, down by 13.9% on-year (down by 9.8% on-quarter), but its net profit reached KW35.9 bil, representing a 28.2% decrease on-year.

SHI posted revenue of KW2.4307 tril ($2.1 bil) and operating profit of KW27.5 bil, turning to the black for three consecutive quarters. The revenue showed a 3.7% downturn on-year. However, the operating profit increased by as much as 350.8%. As of end March 2017, meanwhile, SHI’s loan reaches about KW4.7 tril, down by KW600 bil on-year. SHI also saw a 25% reduction in its debt ratio at the end of last March from 174% posted at the end of 2016.

DSME posted revenue of KW2.7840 tril ($2.4 bil), operating profit of KW291.8 bil and net profit of KW261.3 bil. The revenue decreased by about 20.1% on-year. However, DMSE achieved operating profit and net profit turnaround. The surplus resulted from the uncertainties of its offshore plant business were mostly reflected last year, as well as change order made towards offshore projects of which delivery times are drawing near. For higher value-added ships like LNG carrier and mega containership, DSME has been capable of ensuring profit on the strength of keeping track of budget, improving productivity and on-time delivery.

TOPICS.

THAAD system started to be installed at site (p.2)

Chinese President Xi is quoted to have said “Korea actually used to be a part of China” (p.3)

US president Trump called for SKorea to pay $1 bil for THAAD deployment (p.3)

NKorea fired a ballistic missile off its east coast on 5th (p.6)

NK threatened to sink USS Michigan and Carl Vinson (p.8)

IMF raised its forecast for SKorea’s economic growth this year to 2.7% (p.8)

SKorea’s trade surplus jumped to $13.3 bil in April from $6.3 bil in March (p.9)

PERFORMANCE of Chaebols in first quarter (p.12)

Samsung Electronics reclaimed No 1 position in global smartphone market (p.13)

SEC’s flagship smartphone Galaxy S8 and Galaxy S8 Plus hit the market (p.13)

LG Electronics remained No 1 player in the global market for monitors (p.14)

Amorepacific Group was listed as No 7 cosmetics firm in “The Beauty Inc Top 100” (p.15)

HMC and Kia sold 509,645 eco-friendly vehicles worldwide since 2009 (p.16)

Domestic sales of Korea’s top 5 local automakers surpassed $35.2 bil for first time (p.16)

KOSPI crossed the 2,200 mark on 27th for the first time after May 2011 to hit 2,209 (p.17)

Korean major yards achieved operating profit and net profit turnaround (p.18)

HHI will suspend operations at its Gunsan shipyard next month (p.21)

FSC plans to change domestic shipbuilding industry from current Big3 to Big2 system (p.22)

DSME avoided court receivership and will receive KW2.9 tril on approval of bondholders (p.22)

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