The Korea Times

Korea's wobbly economy

By Kim Jae-kyoungFinance editorWith the world economy coming closer to recession, the Korean economy is becoming more and more fragile. Its financial markets are jittery amid an escalating trade war between the U.S. and China. The country is facing a myriad of short-term economic risks with its key growth engines faltering. It is also challenged by structural issues, such as a low birthrate, fast-aging population and falling productivity.In short, Asia's fourth-largest economy is losing resilience, meaning that its growth potential has been declining and it's fast becoming more vulnerable to external shocks.Korea is underperforming most of its OECD peers, including even larger economies, such as the U.S. and Japan.According to the OECD report, Korea showed the worst economic performance in the first quarter among 32 members of the wealthy nations' club, with its GDP contracting 0.4 percent from the previous quarter, behind Latvia (-0.3 percent) and Mexico (-0.2 percent).The nation's financial markets are mirroring this unsavory macroeconomic trend.The benchmark KOSPI and the Korean w

Sep 4, 2019By Kim Jae-kyoung

Economy

KIF cuts 2019 growth outlook to 2.1%

By Kim Jae-kyoungThe Korea Institute of Finance (KIF) has downgraded its 2019 growth forecast for the Korean economy to 2.1 percent from an earlier prediction of 2.4 percent, citing sluggish exports and investments.In its report released Tuesday, the private think tank said the country's GDP growth will slow to 2.1 percent this year due to a delay in the private sector's recovery amid unfavorable conditions abroad. “Private spending is expected to show relatively stable growth but its growth will be affected by worsening consumer sentiment and sluggish spending on durable goods,” the institute said.It expects private spending to grow 2.1 percent this year, but facilities investment is forecast to contract 5.3 percent putting a major drag on economic growth.“The downturn of the semiconductor industry will weigh on the growth of facilities investment. Also, sagging exports caused by deepening trade disputes will hamper investment growth,” it said.The institute called on the government and the central bank to pursue an optimal mix of accommodative monetary and fi

Aug 13, 2019By Kim Jae-kyoung

Banking & Finance

Korean Re Switzerland gets 'A' rating from S&P

By Kim Jae-kyoungS&P Global Ratings has assigned a long-term issuer credit and financial strength rating of “A” to the Korean Reinsurance Switzerland AG, the global ratings agency said, Monday.Korean Reinsurance Switzerland AG is a Swiss subsidiary of Korean Re, a reinsurance company based in Seoul.Korean Re logoThe agency said that the Swiss subsidiary's rating reflects its view that the company is integral for the group's strategy to expand its business in Europe. “We expect Korean Reinsurance Switzerland to receive strong support from the group in operations, underwriting, reinsurance, and risk management,” the agency said in a press release.“We view the Korean Reinsurance Switzerland as a core subsidiary of Korean Re,” it added.It said that the latest ratings on the Swiss unit are equalized with the group's credit profile.“As a wholly owned entity, Korean Reinsurance Switzerland benefits from Korean Re's established track record of operating in the European region with almost 20 years of history,” it said. “We do not regar

Jul 1, 2019By Kim Jae-kyoung

Korean Re Switzerland gets 'A' rating from S&P

Banking & Finance

S&P assigns 'A' rating to Shinhan

The headquarters of Shinhan Financial Group / Korea Times fileBy Kim Jae-kyoungS&P Global Ratings has assigned its “A” long-term and “A-1” short-term issuer credit ratings to Shinhan Financial Group, the global credit ratings agency said Wednesday.The outlook on the long-term rating is stable.The agency said the Shinhan ratings reflect the group's strong market position as the largest financial holding company in Korea. “Shinhan has a diversified business structure across banking and non-banking businesses and adequate capitalization to support its business growth,” it said. “We also believe that Shinhan will likely maintain its asset quality backed by prudent underwriting standards. The group's extensive retail customer deposit base underpins its overall stable funding and liquidity profiles, in our view.”S&P said Shinhan has a high likelihood of receiving extraordinary government support if the bank were to fall into financial distress. It expects Shinhan to maintain its strong business franchise in Korea. “The group has

May 29, 2019By Kim Jae-kyoung

Banking & Finance

Open banking to erode card firms' market share

gettyimagesbankBy Kim Jae-kyoungThe financial regulator's move to give fintech firms' access to a bank settlement system will hurt credit card companies, Moody's Investors Service said Monday.The concern came after the Financial Services Commission announced plans Feb. 25 to establish an open banking system with all banks' mandatory participation and a unified commission rate, which will allow fintech firms to develop payment services based on the banks' settlement system.In its report, the global credit ratings agency said the plan is credit positive for banks, but credit negative for credit card companies such as Shinhan Card and Woori Card because increased competition from alternative payment services will weigh on their profitability.“The new plan will erode credit card companies' market share of consumer expenditure, which is uniquely high in Korea,” it said.It pointed out that card issuers are likely to experience a major setback as the new plan was announced as they started to wind down consumer benefits in response to the regulators' plan to cut merchant fee rate

Mar 5, 2019By Kim Jae-kyoung

Open banking to erode card firms' market share

Opinion

Policy risks weigh on Korean economy

 By Kim Jae-kyoungFinance editorThe Korean economy is reeling from a series of policy failures. As a result, it is losing vitality and resilience.Despite the government's all-out efforts to reinvigorate the economy, companies balk at making investments and hiring new employees. Consumers, particularly those in middle- and low-income brackets, are tightening their purse springs.On the surface, the sluggish economy seems to be the result of structural problems, such as a falling population, the weakening competitiveness of manufacturing industry and labor market rigidness.There is no doubt that those issues are putting a drag on Asia's fourth-largest economy. But there is an underlining factor that is worsening the situation ― economic policies against the principles of a market economy.Growing risks associated with the Moon Jae-in administration's policies have heightened uncertainty, undermining business and market confidence.The government claims that it will take more time for its policies to make their way through the economy but various data have already shown that its polic

Feb 27, 2019By Kim Jae-kyoung

North Korea

Jim Rogers denies Pyongyang's invitation

Jim Rogers / Korea Times fileBy Kim Jae-kyoungLegendary investor Jim Rogers Wednesday denied media reports that he would visit Pyongyang in March to meet North Korean leader Kim Jong-un.In an email inquiry about North Korea's invitation and his plan to travel to Pyongyang, he answered that he had not heard anything from the reclusive regime about any such meeting.“We know nothing about it at all. No one has contacted us about the meeting. We will let you know if we know more,” Rogers, chairman of Rogers Holding, told The Korea Times via email. On Tuesday, citing sources from the ruling Democratic Party of Korea and the government, local newspaper Kyunghyang Shinmun reported that Kim invited Rogers, and the U.S. government approved the visit.Rogers' denial is likely to come as a big disappointment for Cheong Wa Dae, which viewed the potential visit as a move to provide the impetus for the opening of the Kim Jong-un regimeThe 76-year-old investor, who visited North Korea twice before as an individual tourist, has drawn keen attention in South Korea after he first expressed

Feb 13, 2019By Kim Jae-kyoung

Jim Rogers denies Pyongyang's invitation

Jim Rogers set to visit NK next month: report

Economy

SMEs' exports hit record high of $114.6 bil.

Exports by small- and medium-sized enterprises (SMEs) reached a record high of $114.6 billion in 2018 / YonhapBy Kim Jae-kyoungExports by small- and medium-sized enterprises (SMEs) reached a record high of $114.6 billion in 2018 on the back of the booming global manufacturing industry, the minister of SMEs and startups said, Sunday.The figure is the largest amount in history, up 8 percent from a year ago. It was the second consecutive year of the external shipments exceeding $100 billion.The ministry said that the handsome performance was attributed to a sharp increase in consumer goods and semiconductor-related equipment.The SMEs' exports accounted for 18.9 percent of the nation's total last year, up 0.4 percentage points from a year before.By product, plastics, cosmetics, auto parts and equipment for chip production showed outstanding performance. The SMEs' top 10 export products accounted for 32.1 percent of the total.External shipments of equipment for chip manufacturing jumped by 34 percent to $3.1 billion, while auto parts' exports grew by 2.5 percent to $4.9 billion.Cosmetics

Jan 20, 2019By Kim Jae-kyoung

SMEs' exports hit record high of $114.6 bil.

Economy

Let 'invisible hand' rule markets

Government urged to be a referee, not a playerBy Kim Jae-kyoungThe English Premier League is now the most successful soccer league in the world. As the favorite among soccer fans, it attracts a lot of world-class players and massive investments from abroad.There are several reasons behind its overwhelming success, such as the market being open to the outside, unique marketing efforts and free competition. However, there is, although often disregarded, another important factor ― quality referees.When watching any matches in the League, you can easily realize that they are much faster and more dynamic than those in other leagues. It is because the League retains many top-tier players but referees' roles should not be underestimated.Not all but in most matches, referees are almost “invisible” throughout the games. This means they try to minimize intervention to let players fulfill their ability.They only step in when there are serious fouls. They have no hesitation in throwing red cards to dirty players. They are well aware that they should play a “supporting role,&rdq

Jan 7, 2019By Kim Jae-kyoung

Politics

Korea shares legislation knowhow with Indonesia

Kim Oe-sook, minister of Government Legislation, delivers a keynote speech at the seminar on the improvement of Indonesia's legislative process held by the Cabinet Secretariat of Indonesia at the Grand Hyatt Jakarta on Nov. 28. /Courtesy of the Ministry of Government LegislationBy Kim Jae-kyoungSouth Korea has stepped up its efforts to globalize its legal system by strengthening its cooperation with Indonesia.From Nov. 27 to 30, Kim Oe-sook, minister of Government Legislation, visited the Cabinet Secretariat of Indonesia, an executive office of the President, to support the country in establishing a united legislative organization.She also discussed strengthening legislative exchanges and cooperation with ranking Indonesian officials. In a keynote speech at the seminar on the improvement of Indonesia's legislative process held by the Cabinet Secretariat at the Grand Hyatt Jakarta, Nov. 28, Kim said, “The Ministry of Government Legislation was established when Korea was founded. And our ministry has made efforts to meet government policy objectives through legislation.” &l

Dec 13, 2018By Kim Jae-kyoung

Kim Jae-kyoung

Read more

Korea's wobbly economy

KIF cuts 2019 growth outlook to 2.1%

Korean Re Switzerland gets 'A' rating from S&P

S&P assigns 'A' rating to Shinhan

Open banking to erode card firms' market share

Policy risks weigh on Korean economy

Jim Rogers denies Pyongyang's invitation

SMEs' exports hit record high of $114.6 bil.

Let 'invisible hand' rule markets

Korea shares legislation knowhow with Indonesia

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