Japan’s announcement in March that it would seek to join the trans-Pacific Partnership looked like great news for the US. The TPP, intended to lower trade barriers among some of Washington’s key trading partners in the Pacific region, is an important part of the Obama administration’s “rebalancing” to Asia – and having the continent’s second-biggest economy on board would give it greater clout.
But as US undersecretary of commerce Francisco Sánchez told beyondbrics on Tuesday, Washington still has concerns about Japanese trade policy – particularly in cars. Continue reading »
Governor Kim Choong-soo and his colleagues were probably just being polite in not pointing the finger at Tokyo. But it’s likely that the Japanese currency’s plunge on the forex markets looms much larger in their minds that the word-count suggests. Just look at the chart: perhaps Seoul might have held fire if the yen-won rate had stabilised in April. The latest drop in the Japanese currency may have pushed the central bank into action. Continue reading »
Concerns over possible intervention by the South Korean authorities are growing as the Korean won neared it’s strongest level to the dollar in two-months.
The won ended onshore trading at 1,091.4 per dollar on Tuesday, the strongest since March 8, marking its third consecutive day of gains. Although there were no signs of any major action by local financial authorities, traders are becoming more cautious as the stronger won raises the prospect of intervention. Continue reading »
Hyundai Motor Group’s rise to prominence in the global autos market may have sparked alarm from Detroit to Wolfsburg – but the pace of growth has slowed of late. Chung Mong-koo, the South Korean group’s chairman, has adopted a cautious approach to capacity expansion in order to avoid the dangers of growing too fast.
So the market sat up and took notice on Friday after he hinted at a possible change of heart. Continue reading »
The weaker yen is slowly hampering South Korea’s growth momentum, with the country’s industrial output falling 2.6 per cent in March from February.
The latest data marked a fall for a third straight month, clouding the country’s economic outlook. Industrial production fell 3.0 per cent last month from a year earlier, severely undershooting market estimates, as labour unions at Hyundai Motor, the country’s largest automaker, refused to work on weekends. Continue reading »
After that ad, and a drop in profits, some good news for Hyundai. To the relief of many investors, the labour union has ended its seven-week dispute with the company over weekend work.
The 45,000-strong union will resume their overtime work from this weekend after refusing it for the past eight weekends, demanding higher wages. The temporary work stoppage cost the company more than Won1tn ($900m) in production losses. Continue reading »
Given that South Korea has one of the world’s highest suicide rates, one would expect its leading companies to treat the subject with the utmost sensitivity. So it is surprising to see a recent promotional video for Hyundai Motor using it as the basis for a comic skit. Continue reading »
Faltering exports, war threats, China slowdown, low inflation and a stalling economy, and a new government keen to promote growth: Korea’s central bank had a huge range of reasons to cut rates at its last couple of meetings.
But Thursday’s GDP data has vindicated the recent decisions to hold. Quarter on quarter growth was 0.9 per cent – it might not sound like much, but that’s the highest for two years. Continue reading »
Lock&Lock is a curious entity in modern manufacturing. Despite fierce competition in a crowded sector with few entry barriers, the South Korean kitchenware company consistently boasts double-digit operating profit margins.
Cho Moon-sun, head of investor relations, puts it down to branding. “Once you are recognised as a premium brand, consumers will buy your products even if they are three or four times more expensive,” she says. Continue reading »
Many Korean banks, hard pressed to find growth at home, have tried to expand into emerging markets across Asia, their main targets due to cultural affinity.
But a decade on after launching aggressive expansion plans, they have struggled to gain a strong presence overseas because of their limited international experience and a lack of an extensive international network. Continue reading »
China may be Taiwan’s historic enemy number one but recently it seems South Korea’s Samsung has made a bid for the title.
The smartphone to semiconductor chaebol competes against Taiwanese electronics groups in nearly every category. Now Samsung may find itself stung by Taiwan’s regulators investigating whether it broke the law by posting nasty comments about Taiwanese smartphone maker HTC in online discussion groups. Continue reading »
The bigger-than-expected extra budget was unveiled on Tuesday to much fanfare with finance minister Hyun Oh-seok predicting that it will help drive up the country’s growth rate to about 3 per cent in the second half. Continue reading »
Politicians and diplomats tell people to stay calm, but for international residents of Seoul, the threat of war is worrying. Meanwhile, South Korean workers on the border in Kaesong and Chinese truckers have seen their work affected.
Despite the crisis with the North and political pressure for rate cuts to boost flagging growth and push down the won in response to the yen shock, the central bank on Thursday left its policy rate unchanged at 2.75 per cent. But for how long it can resist the calls for cuts is moot. Continue reading »
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