Headlines, December 28, 2018

Round-up of important news from major Korean dailies and from international media today:

The Korea Post media (www.koreapost.com) in English, (www.koreapost.co.kr) in Korean.

Gov't marks up purchase price of rice for emergency reserves by 27.5 pct

The South Korean government said Friday it has decided to mark up the purchase price of rice set aside for emergency reserves to better help local farmers. The Ministry of Agriculture, Food and Rural Affairs said it decided to set this year's price for a 40-kilogram sack of rice at 67,050 won (US$59.76), up 27.5 percent from last year's 52,570 won.

Korean Air chief's family members face possible indictment over smuggling

Customs authorities have referred family members of Korean Air Chairman Cho Yang-ho to state prosecutors on smuggling charges, an official said Thursday. It the latest bout of negative attention to hit South Korea's largest national flag carrier, Cho's wife Lee Myung-hee and their two daughters -- Hyun-min and Hyun-ah -- are accused of smuggling a wide range of goods worth 150 million won (US$134,000) on 260 occasions between April 2009 and May this year, said Ryoo Ha-sun, an official at the spokesman's office of the Korea Customs Service.

Sluggish S. Korean manufacturers' biz outlook continues into Jan.

South Korean manufacturing companies' sluggish sentiment on the business climate is set to continue into the new year amid a sharp drop in oil prices, a central bank poll showed Friday. The business survey index (BSI) for manufacturers came to 71 for January, unchanged from this month, according to the Bank of Korea (BOK).

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KBS (http://world.kbs.co.kr/english/news/)

Potential Impact of Recent U.S. Rate Hike

On December 19, the U.S. Federal Reserve raised its benchmark interest rate for the fourth time this year by a quarter percentage point, widening the rate difference between the U.S. and Korea to 0.75 percentage point. But the U.S. central bank also hinted that it may slow down the pace of rate increases next year, lowering 2019 hike projections from three down to two.

CG Bio, a Promising Bio Firm to Develop Next-Generation Stents

Now it’s time to take a look at a Korean business bringing about changes in the global economy with some new ideas. Continuing our focus from last week, we’ll introduce you to company that drew special attention at the Korea Tech Show 2018, a showcase of industrial R&D and technology. The company we’re talking about today is CG Bio, a medical equipment provider. Let’s hear from company CEO Yoo Hyun-seung(유현승).

Potential Tasks of Moon’s Second Economic Team

Today, with Professor Choi Jin-bong at SungKongHoe University, we’ll discuss potential tasks of Moon’s second economic team, which seems to be moving quickly in a bid to boost the slumping economy. First, Professor Choi explains why the government has launched a new economic team.

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Yonhap (http://english.yonhapnews.co.kr)

Seoul stocks open higher on U.S. gains

South Korean stocks opened higher on the last trading session of 2018 on Friday, as the market tracked overnight gains on Wall Street. The benchmark Korea Composite Stock Price Index (KOSPI) added 10.51 points, or 0.52 percent, to reach 2,038.95 in the first 15 minutes of trading. The U.S. stock market gathered ground, with the Dow Jones industrial average advancing 1.14 percent and the Nasdaq composite moving up 0.38 percent, as investors digested the latest economic data.

Seoul stocks close nearly flat on ex-dividend day

South Korea's main bourse edged up after a choppy ex-dividend day session on Thursday, with the South Korean won rising against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) inched up 0.43 point, or 0.02 percent, to close at 2,028.44. Trade volume was moderate at 390 million shares worth 5.28 trillion won (US$4.71 billion), with gainers outnumbering losers 521 to 331.

Small firms face tougher punishment over accounting irregularities

Small and medium-sized firms will be subject to tougher punishment if they are found to have engaged in accounting irregularities under revised regulations, the financial watchdog said Thursday. If accounting irregularities worth 5 billion won (US$4.4 million) or more are found at a small firm, financial authorities could punish the company regardless of the company's size, the Financial Supervisory Service (FSS) said.

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The Korea Herald (http://www.koreaherald.com)

House prices in Seoul, Busan to drop in 2019: BOK

House prices next year are anticipated to drop in most regions except for Gyeonggi Province, Daejeon and Sejong, according to a survey of real estate experts conducted by the Bank of Korea. In its regional economy report published earlier this week, the central bank said house prices would drop in most areas, including Seoul and Busan.

Korean public sector debt up in 2017

South Korea's public sector debt rose slightly in 2017 from a year earlier, but the ratio of debt to the country's gross domestic product fell, the government said Thursday. The country's public sector debt -- which includes the debt of the central government and nonfinancial public firms -- reached 1,044.6 trillion won ($931 billion) as of end-2017, up 8 trillion won from 2016, according to the data compiled by the Ministry of Economy and Finance.

S. Korea to extend period for NK defectors' settlement application

South Korea on Thursday decided to extend the period in which North Korean defectors can apply for settlement here from the current one year to three years to provide them with more support, the unification ministry said. Under the current law, defectors from the communist country can face restrictions in receiving state support in case they fail to express their intent to settle in South Korea within one year of arrival.

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The Korea Times (http://www.koreatimes.co.kr)

US-China trade feud likely to persist for years

Korea should brace for a renewal of deepening trade tension between the United States and China in 2019 as it is likely to persist for years, according to economists, Thursday. Korea is especially vulnerable, as it is a small, open economy with heavy reliance on external shipments. More importantly, the country has no control over the feud between the two economic giants.

Chief regulator concerned over revival of 'comprehensive audit'

The country's chief regulator has expressed concerns over the revival of a system enabling the Financial Supervisory Service (FSS) to launch so-called "comprehensive inspections" on financial companies. In a meeting with lawmakers of the National Assembly's policy committee on Dec. 27, Financial Services Commission (FSC) Chairman Choi Jong-ku said it was inappropriate to bring back this system, which was abolished three years ago, and use it as a weapon against companies.

Dow notches record point surge in miraculous comeback

The Dow Jones Industrial Average surged more than 1,000 points for the first time on Wednesday, leading a broad Wall Street rebound after a report that holiday sales were the strongest in years helped mollify concerns about the health of the economy.

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Chosun Ilbo (http://english.chosun.com)

No Work Gets Underway on Cross-Border Railway Project

The two Koreas held a ground-breaking ceremony in the North Korean border city of Kaesong on Wednesday for a project to reconnect railways and roads severed during the 1950-53 Korean War. Some 200 officials from both sides and international dignitaries gathered for the largely symbolic event. Actual work cannot begin until sanctions against North Korea are eased.

Gov't Accused of Spying on 'Politically Unsound' Public-Sector Execs

The government has been accused of illegally spying on executives at major state-run businesses whom they suspect of being too close to the Park Geun-hye administration and setting special investigators on their trail. Kim Tae-woo, a former member of the inspection team-turned-whistleblower, on Wednesday claimed that the government illegally collected information on the heads and auditors of 330 state-run companies and agencies to see "if they were appointed by the former administration and what their political affiliations are."

2 Koreas Hold Ground-Breaking Event for Railway Project

Some 200 government officials and international dignitaries are attending a ground-breaking ceremony in the North Korean border city of Kaesong on Wednesday for a project to reconnect railways and roads severed during the 1950-53 Korean War.

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HanKyoReh Shinmun (http://english.hani.co.kr)

S. Korea and Japan unable to reach agreement on compensation for forced labor victims

South Korean and Japanese government officials were reportedly unable to bridge their differences on Dec. 24 in their first round of discussions regarding a South Korean Supreme Court ruling ordering compensation to victims of forced conscription during the Japanese occupation.

NIS forfeits appeal of ruling on disclosure of documents on civilian massacre in Vietnam War

The National Intelligence Service (NIS) recently decided to give up appealing a court ruling ordering it to disclose information related to civilian massacres during the Vietnam War. Observers are now calling on the NIS to immediately release the related documents.

S. Korean naval vessel’s targeting radar locking onto Japanese plane turns into diplomatic issue

The appearance of a Japanese patrol aircraft within radar tracking range during a South Korean naval vessel’s rescue of a North Korean ship is turning into a diplomatic issue as Japan continues taking issue with a South Korean naval vessel locking its targeting radar on a Japanese patrol aircraft.

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The Dong-A Ilbo (http://english.donga.com/)

Trump declares end to America’s role as world’s policeman

“The United States cannot continue to be the policemen of the world,” said U.S. President Donald Trump on Wednesday, practically declaring an end to America’s global intervention diplomacy. Visiting U.S. troops stationed in a conflict zone in Iraq, the American president emphasized a clear shift in Washington’s diplomatic and security policy direction, saying America is no longer “suckers.” Concerns are growing that this will have a significant impact on various issues of ROK-US alliance such as defense costs sharing.

Ri Sun Kwon attends groundbreaking ceremony for railway project

Japan is stepping up its offensive against South Korea every day regarding a South Korean navy destroyer’s operation of a radar system while rescuing a North Korean boat in distress in the East Sea on Thursday. Even after the South Korean defense ministry’s explanation, Japan continues to claim that the destroyer targeted a fire control radar system toward a Japanese military surveillance aircraft, calling for an apology and punishing officials responsible for the situation.

Steve Biegun, the angler of denuclearization

“He acts as an angler who catches big fish,” a South Korean diplomat said. "In pursuit of resolving North Korean nuclear issues, he does not reveal any mood changes even if it is only natural that he gets angry at some point." This remarks describe U.S. Special Representative for North Korea Stephen Biegun, who delivered an appeasing message regarding North Korea over the recent South Korea-U.S. working level meetings and briefed U.S. President Donald Trump on the recent North Korean issues on Christmas Eve. Since he took office on Aug. 23, he has not met up with the North's Foreign Ministry official Choi Sun Hee, his North Korean counterpart. However, it has been assessed that his unwavering dedication to persuading North Korea in his own way has gained recognition gradually across the diplomatic arena.

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JoongAng Ilbo (http://koreajoongangdaily.joins.com/)

Blue House blamed for blacklist

The opposition Liberty Korea Party (LKP) urged the Blue House on Thursday to respond to suspicions that it compiled a blacklist of executives at public organizations affiliated with the Environment Ministry early this year, the latest in two weeks of revelations about illegal surveillance by President Moon Jae-in and his top aides.

Army apologizes for gift of DMZ barbed wire

The South Korean Army officially apologized on Wednesday after several of its officers earlier this month gave ruling party lawmakers pieces of barbed wire removed from the demilitarized zone (DMZ) as part of an inter-Korean military agreement.

Ground broken on railway, road project

South and North Korea held a joint ceremony in the border city of Kaesong on Wednesday to break ground on a project to reconnect their railways and roads - inaugurating a new era of exchanges across the heavily fortified border between the two countries.

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The KyungHyang Shinmun (http://english.khan.co.kr/)

President Moon Wants Innovation? Then First Change Existing Practices

On December 26, President Moon Jae-in presided over a meeting of the National Economic Advisory Council and said, "To breathe vitality into the economy of the Republic of Korea, we urgently need to innovate and advance our traditionally strong manufacturing industry and improve our competitiveness." The president also said, "Our economy was greatly successful until now as a "catch-up economy," which mainly applied technology that other countries first developed, but this model has reached its limits."

UAE Nuclear Power Plant Could End up in the Red: Are Nuclear Power Plants Still a Future Source of Revenue?

One of the main reasons people oppose a nuclear power phase-out is because nuclear power plants are a future source of revenue. However, according to the “United Arab Emirates (UAE) Nuclear Power Plant Construction Project Report” of the Korea Electric Power Corporation (KEPCO) obtained by the Kyunghyang Shinmun, the profitability of exporting nuclear power plants is questionable.

Korea-Japan Relations on Edge: Conflict over Radar Used to Detect a Fishing Boat in Distress

A P-1 patrol plane of the Japanese Maritime Self-Defense Force was detected by a radar on the South Korean destroyer, ROKS Gwanggaeto the Great, which was rescuing a North Korean fishing boat in the East Sea on December 20. This incident has come under attack from Japan. For two days straight since the day after the incident, the Japanese defense ministry protested claiming, "The South Korean Navy targeted the Japanese Maritime Self-Defense Force patrol plane with its radar," and on December 23, Parliamentary Vice Minister of Defense Hiroshi Yamada wrote on Twitter, "It is an act hard to forgive, for it threatened the lives of the Self-Defense Force soldiers. It is like shooting a gun at our backs, when we thought they were on our side." Japanese politicians are ignoring the explanations by South Korea and instead raising their level of criticism. We find it bitter and regrettable for it seems to show the current status of bilateral relations, which have deteriorated so far that issues that the two countries would have simply brushed aside in the past are now the cause of conflict.

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AJU Business Daily (http://www.ajudaily.com)

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Maeil Business News Korea ( http://www.pulsenews.co.kr/)

AirAsia sells 25 aircraft to US private investment firm for US$768mil
AirAsia Group Bhd, Asia`s leading low-cost carrier, has sold 25 existing aircraft to AS Air Lease Holdings 5T DAC, an entity indirectly controlled by Castlelake LP (Castlelake), in a deal valued at US$768 million. Castlelake is a US-based global private investment firm and an experienced leader in aircraft ownership and servicing.

Korean budget carrier T’way Air adds four new routes to Japan, Vietnam
South Korea’s oldest and third-largest low-cost carrier T’way Air Co. has added four new international routes departing from regional airports to serve growing demand for overseas trips across the country. The company said on Monday that it launched four new routes from Busan, Korea, to Saga, Japan, Oita, Japan, and Hanoi, Vietnam, as well as from Muan, Korea, to Oita on Dec. 22. Launching ceremonies were held at respective airports Gimhae International Airport and Muan International Airport.

HMM to initiate radical reform next year with help of external team
South Korea’s state lender Korea Development Bank (KDB) will put the nation’s leading container carrier Hyundai Merchant Marine Co. on a massive reform next year by injecting a team of outside experts including former workers of now-defunct Hanjin Shipping to snap its loss-making streak for three straight years.

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Maeil Business News Korea ( http://www.pulsenews.co.kr/)

SK Hynix to abolish retirement age of talented engineers

South Korea’s second largest chipmaker SK Hynix Inc. will allow its talented engineers to work beyond the minimum normal retirement age to boost the company’s research and development capability. The new plan was unveiled at SK Hynix’s campus in Icheon, Gyeonggi Province, on Thursday, in the presence of CEO Lee Seok-hee and 400 other employees. Along with this, SK Hynix has made changes in other corporate policies aimed at improving its overall evaluation system and enhancing cooperation among co-workers.

Korea’s top 10 chaebol groups lose $173bn in market cap this year

Market value of top Korean corporate names shriveled by 20 percent over a year due to bearishness of Korean stocks this year and growing doubts about outlook on the Korean Inc. According to chaebol.com that tracks conglomerates, the combined market cap of the listed companies under the country’s top 10 family-owned chaebol groups stood at 193.8 trillion won ($173 billion) as of Thursday, down 20.0 percent from the end of last year. The combined market cap was calculated based on the number and per-piece price of both common and preferred shares.

LG Elec to debut upgraded exoskeleton suit at CES

At CES 2019, LG Electronics will debut an updated version of its wearable CLOi SuitBot that supports the lower body to reduce stress when lifting and bending, the company said on Thursday. Originally unveiled last fall in Berlin, the wearable exoskeleton supports the user`s waist and augments their own muscle power to reduce the risk of injury and fatigue when performing physically demanding and repeated tasks such as lifting and lowering heavy loads.

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Lee Kyung-sik edt@koreapost.com