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Kang Seung-woo

Korea Times Business Reporter

Kang Seung-woo is the Business Desk editor at The Korea Times. Prior to this position, he covered politics, national affairs, finance and sports.

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Companies

Competition heating up in credit card market

By Kang Seung-woo A couple of newcomers are set to join the credit card industry with the existing ones gearing up to increase their slice of the pie. The result is a level of competition that has not been seen before, spurring the credit card firms to give their all to recruit new clients, often offering incentives. That should be good news for consumers in terms of greater choice but it could quickly turn into a nightmare for the economy in a broader sense. The credit card debt crisis is still fresh in the collective memory of financial regulators. Financial Supervisory Service (FSS) Governor Kim Jong-chang said recently that his agency will impose stricter regulations. “We plan to force credit card companies to increase the level of allowance for bad debts in credit card loans as part of containing their excessive race to increase the loan amounts,” Kim told reporters. Growing debts from the soured card loans is one of the main problems the financial authorities are concerned about. Currently, the standard for loan-loss provision for credit sales is equal to those

Jan 9, 2011By Kang Seung-woo
Companies

North’s economic dependence on China deepening rapidly

By Kang Seung-woo North Korea’s economic reliance on China has been deepening rapidly over the past years, with the latter accounting for more than 80 percent of the country’s international trade amid soured relations with South Korea and sanctions by the United Nations. The change indicates that the reclusive country has been increasingly isolated from the rest of the world. The Korea Finance Corporation (KOFC) reported Sunday that the North suffered the largest drop in its international trade in 2009 since 1998, as its trade remained at $3.41 billion, down 10.6 percent from the previous year. Exports declined 6 percent to $1.06 billion, while imports fell 12.5 percent to $2.35 billion in 2009, bringing North Korea’s trade deficit to $1.29 billion. In order to offset the fall in trade with foreign countries, the North increased its trade with China, its biggest ally. As a result, China accounted for 80.4 percent of its total trade in 2009, and Pyongyang’s trade deficit with Beijing amounted to $1.1 billion. “The North’s industrial activities are not brisk as its tr

Jan 9, 2011By Kang Seung-woo
Companies

Insurance companies exploring overseas

By Kang Seung-woo Korean insurance companies are aggressively gearing up to make their foray into overseas markets to expand their businesses beyond the saturated domestic market. According to industry sources, Samsung Life Insurance has recently scaled up its overseas business team, while Korea Life Insurance is trying to advance into China. “Due to a low birthrate and an aging society, the insurance industry in Korea is likely to enter a low-growth era,” a source told The Korea Times. Samsung has selected Stephan Rajotte of Canada, who was the vice president for foreign operations, Tuesday, to head its newly-expanded Overseas Business Headquarters. The insurance veteran, who worked for Sun Life in Canada and MetLife in the United States, served as president of Sun Life Financial Asia for three years before joining the nation’s biggest life insurer in September 2010. Samsung’s first target is China. Newly-appointed President Park Keun-hee has visited China twice and discussed ways to expand its investment with Air China Group, the partner of joint venture Samsung Ai

Jan 6, 2011By Kang Seung-woo
Companies

US biggest foreign equity investor nation

By Kang Seung-woo Share holdings by foreign investors increased last year, with the United States topping the list by nation, the Financial Supervisory Service (FSS) said Thursday. According to the financial watchdog, foreigners held 386.36 trillion won in listed stocks, or 31.2 percent of total market capitalization as of the end of December, up 30.5 percent from 295.98 trillion won the previous year. U.S. investors held 150.611 trillion won in stocks, accounting for 39 percent of the foreign shareholdings, followed by the United Kingdom with 43.03 trillion won and Luxembourg with 28.08 trillion won apiece. Although China’s share holdings was the 17th largest, it marked the biggest year-on-year increase by reporting a 106.4 percent gain in Korean stock holdings. Ireland was up 53.3 percent and Australia increased 48.5 percent. As for stocks, foreign investors made net purchases of 22.89 trillion won in listed shares last year, down from 23.53 trillion won in 2009, but foreigners made net purchases of 14.439 trillion during the four months from September to December 20

Jan 6, 2011By Kang Seung-woo
Companies

Low income earners rely on private loans

By Kang Seung-woo The low-income bracket has turned to private loans more than to financial institutions due to low credit ratings, Statistics Korea said Wednesday. The statistics office said in its recent report that the lowest 20 percent of earners borrowed money from private loans the most, at 33.2 percent. Their dependency on banks stood at 32.5 percent; non-banking units accounted for 24.5 percent and insurance companies 2 percent. The data dates back to February last year, the latest available. The lowest 20 percent of earners are those who annually make 6.78 million won ($6,034). “As the low-income group’s credit rating is so low that they can’t borrow money from banks and tend to depend heavily on other sources,” said a state statistician. The top 20 percent of earners whose average income is 88.21 million won took loans from banks the most, with the proportion coming to 67.3 percent, followed by the non-banking sector with 18.1 percent, while private loans accounted for just 5.5 percent. The overall data showed that banks made up more than half of all loa

Jan 6, 2011By Kang Seung-woo
Companies

GDP regains pre-crisis level of $1 tril.

By Kang Seung-woo Korea’s gross domestic product (GDP) is estimated to have surpassed $1 trillion (1,100 trillion won) last year to return to the level seen in 2007 before the global financial crisis, preliminary government data showed Tuesday. In addition, the country’s ranking in the global GDP standings is expected to go up a notch or two, while its per capita gross national income (GNI) is estimated to have reached around $20,500, also back to the level seen before the 2008-2009 crisis. According to the Ministry of Strategy and Finance, the nation’s nominal GDP eclipsed the mark for the first time since 2007 when it first reached the figure. The 2010 GDP is estimated to reach between 1,140 and 1,150 trillion won. Korea marked $1.04 trillion in GDP in 2007, but the global crisis sent the Korean won’s value plunging against the U.S. dollar, reducing GDP to $931 billion and $833 billion in 2008 and 2009, respectively. Asia’s fourth-largest economy, is expected to move up the ladder of the global rankings, competing with Australia and Mexico for the 13th spot. It plac

Jan 4, 2011By Kang Seung-woo
Companies

Is finance minister overly upbeat?

By Kang Seung-woo Strategy and Finance Minister Yoon Jeung-hyun is seemingly overly ambitious about this year’s growth forecast, considering his ministry’s prediction outpaced almost all other forecasters. The finance ministry’s projection of 5-percent growth for 2011 has been undercut by yet another organization. The U.N. Economic and Social Commission for Asia and the Pacific (ESCAP) became the latest to go below Yoon’s growth forecast Monday, when it said that Korea’s economy is expected to grow 4.2 percent. ESCAP is the regional development arm of the United Nations for the Asia-Pacific region. Following 6.1 percent growth last year, the ministry said last month that the nation’s economy is forecast to grow about 5 percent this year, driven by a steady rebound in global markets and robust domestic demand. “In the process of returning to a normal growth pace following the fast economic rebound, it is true that the economic growth rate appears to be slowing to some extent,” Minister Yoon said at a joint press conference. “But with domestic demand and exports remain

Jan 4, 2011By Kang Seung-woo
Companies

New FSC chief hints at greater intervention

By Kang Seung-woo The new chief of the nation’s financial regulator hinted Monday that government intervention and control is likely to get stronger. Financial Services Commission (FSC) Chairman Kim Seok-dong said in his inauguration speech that the government will strengthen its presence to protect stability in the financial market. “The government will take strict measures against whoever is found to have disrupted or distorted the financial market,” the 57-year-old said three days after his appointment. He continued to raise his voice over the strong role of the government. “When concerns over market failure are growing, the government will take an active role in stabilizing it as the nation’s top financial regulator,” he said. As President Lee Myung-bak selected Kim, the former deputy finance minister, Friday to replace former FSC Chairman Chin Dong-soo, there was speculation that unlike his predecessor, Kim, who is known for his line “The state governs, therefore it exists,” was expected to preach on the government’s strong role in supervising the financial ma

Jan 3, 2011By Kang Seung-woo
Companies

Can KOSPI repeat bullish run in Year of Rabbit?

By Kang Seung-woo Starting in the new year, an increasingly large number of stock traders may rush to the Seoul bourse on the grounds that the Year of the Rabbit in the 12-year cycle of the Chinese zodiac has repeatedly heralded a bullish run on the stock market. Since the Korea Composite Stock Price Index (KOSPI) started from a base value of 100 in January 1980, the Korea Exchange (KRX) has seen two rabbit years in 1987 and 1999 and both saw impressive performances. The KOSPI began 1987 at 264.82 points and jumped sharply to 525.11 ― a 98.3 percent gain ― by the end of the year; while 1999 saw the benchmark index post a 75 percent increase after it more than doubled from 587.57 to 1028.07. A market expert said that the preparation for the Seoul Olympics in 1988 had a positive influence on the stock market, along with the flourishing local economy. “At that time, the Korean economy enjoyed low interest rates, a weak dollar and low oil prices. As a result, companies could raise funds easily, which translated into aggressive investments, while they were able to increase

Dec 31, 2010By Kang Seung-woo
Companies

BOK chief vows to achieve dual goals

By Kang Seung-woo The nation’s top central banker said Friday that he will seek to achieve dual goals ― controlling inflation and boosting economic growth ― next year in order to ensure a sustainable recovery. “Economic uncertainty is still lingering in and out of Korea, so we need to raise the guard against fast-changing economic conditions,” BOK Governor Kim Choong-soo said in a New Year's message. “The BOK will manage the rate policy by focusing on maintaining price stability and helping support solid economic growth.” His remarks indicate that the central bank

Dec 31, 2010By Kang Seung-woo
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