Korea weighs US trade demands with economic impact study SEOUL, May 28 (AJP) - South Korea has begun an economic feasibility study as part of ongoing trade consultations with the United States, signaling preparations for potential agreements that could carry broad implications for the country’s economy, according to government officials, Wednesday. The Ministry of Trade, Industry and Energy has commissioned the Korea Institute for International Economic Policy to assess the economic ramifications of current discussions with Washington. The talks have increasingly centered on non-tariff barriers and the goal of achieving more balanced trade. The latest move follows a second round of technical consultations held in Washington from May 20 to 22. For the first time in the ongoing talks, American negotiators raised concerns over non-tariff barriers affecting a range of sectors. These included long-standing issues related to South Korean restrictions on beef and rice imports — topics highlighted in the U.S. Trade Representative’s annual National Trade Estimate report released in April. The list of U.S. concerns also extends to market access limits on pet food containing ruminant ingredients, offset requirements in defense procurement, and regulatory obstacles for imported vehicles. Additional topics reportedly include pharmaceutical pricing mechanisms and restrictions on Google’s precision mapping services in South Korea. While the two sides have not yet entered into substantive negotiations on individual items, Seoul is conducting preliminary assessments under the Act on the Conclusion Procedure and Implementation of Commercial Treaties. The law mandates economic feasibility evaluations and parliamentary briefings for trade deals that could materially affect the national economy. “The United States may have put many issues on the table as part of negotiations, but given the compressed timeline and South Korea’s domestic circumstances, Washington is also aware that finalizing discussions in the short term will be difficult,” a South Korean government official said. Negotiators face a July 8 deadline to wrap up discussions, but final decisions are widely expected to be deferred until after South Korea’s presidential election on June 3, leaving key choices in the hands of the next administration. 2025-05-28 17:11:27

Trump tariff relief lifts Korea's business sentiment temporarily SEOUL, May 28 (AJP) - Business sentiment in South Korea posted its sharpest monthly increase in two years in May, bolstered by a temporary reprieve from U.S. trade tariffs, according to data released Wednesday by the Bank of Korea. Yet despite the surge, overall confidence remains mired below levels typically associated with economic optimism. The central bank’s composite business sentiment index (CBSI) climbed 2.8 points to 90.7 in May, marking its third consecutive monthly gain and the most significant increase since May 2023, when the index rose by 4.4 points. Still, the index remains well under the neutral benchmark of 100, indicating that more companies viewed business conditions negatively than positively. Manufacturers led the improvement, with their sentiment index rising 1.6 points to 94.7 — the fifth straight month of gains since dipping to 87.1 in December. The recovery was fueled in part by improved funding and operating conditions, the central bank said. "While the all-industry index has shown steady improvement, it still falls short of the long-term average of 100, making it difficult to describe the outlook as optimistic," said Lee Hye-young, a senior official at the Bank of Korea, during a press briefing. Lee added that the tariff reprieve provided only a temporary boost and warned that export performance remained subdued in most sectors, with the notable exceptions of semiconductors and shipbuilding. 2025-05-28 14:42:51

Stablecoin push by candidates raises alarm among regulators, experts SEOUL, May 28 (AJP) - South Korea’s leading presidential candidates have pledged to support the development of won-pegged stablecoins even as financial authorities urge caution. With an estimated 10 million South Koreans actively trading crypto, both front-runners have made digital asset policy central to their campaigns. Lee Jae-myung’s camp has formed a digital assets committee tasked with drafting comprehensive legislation, while Kim Moon-soo has proposed incorporating stablecoin regulation into a broader financial reform agenda. The candidates contend that South Korea must act swiftly to counter the growing influence of foreign-issued stablecoins, which are increasingly used for cross-border payments and decentralized finance platforms. Stablecoins — digital tokens typically pegged to fiat currencies like the U.S. dollar or euro — have gained traction globally for their potential to enable faster, lower-cost transactions while promising greater price stability. Yet the proposals have met with sharp scrutiny from monetary policy experts and financial regulators, who warn that privately issued won-backed stablecoins could encroach on sovereign monetary authority. Analysts argue that granting such power to non-governmental entities risks undermining the Bank of Korea’s control over the money supply. “There is a fundamental question of whether private issuers should have the ability to create won-denominated assets that effectively function as currency,” said Professor Park Sun-young of Dongguk University. “Without rigorous oversight, the risks are significant.” Skeptics also question the practicality of a won-based stablecoin, noting that the South Korean currency lacks the global demand enjoyed by the U.S. dollar. As a result, adoption of won-backed tokens beyond national borders would likely be limited, potentially constraining their utility in global crypto markets. Industry insiders further warn that unchecked issuance could introduce new risks to financial stability. A surge in redemptions — akin to a digital-era bank run — could trigger liquidity crises, as seen in prior cryptocurrency collapses. Professor Park pointed to past failures stemming from inadequate vetting of token issuers as a cautionary tale. Concerns about illicit activity are also rising. A 2024 report from blockchain analytics firm Chainalysis found that stablecoins were involved in approximately 63 percent of global crypto-related illicit transactions. Despite these concerns, both candidates are also pushing for regulatory changes that would allow for spot cryptocurrency exchange-traded funds (ETFs), which would enable South Koreans to invest in indices tied to bitcoin and ethereum through traditional stock exchanges. Current financial law prohibits virtual assets from serving as underlying components of ETFs. While crypto ETFs could broaden investor access to digital assets, regulators remain wary that they could siphon capital away from domestic equities, potentially undermining broader efforts to strengthen corporate governance and boost shareholder value in local markets. 2025-05-28 14:29:02

Lee Jae-myung's labor agenda could face resistance from chaebol, foreign firms Editor's Note: This is the second and last in a two-part series examining the economic campaign promises of Democratic Party presidential candidate Lee Jae-myung. SEOUL, May 27 (AJP) - South Korea's leading presidential candidate Lee Jae-myung of the Democratic Party has vowed to overhaul the country’s labor system and market practices in a bold attempt to forge what he calls a “basic society." Speaking days after a fatal industrial accident at an SPC bakery plant, Lee underscored the urgency of reform. “We must improve the shameful reality of a ‘labor-backward' country, where workplaces become sites of death, not life,” he said during a campaign stop on May 20. “As befits the world’s 10th-largest economy, we must correct the contradictions in our labor system.” Lee, a longtime advocate for labor rights, has made revitalizing the labor market a centerpiece of his campaign ahead of the June 3 presidential election. His platform includes backing the controversial Yellow Envelope Act, a legislative effort that seeks to expand the scope of legal labor disputes and limit employers’ ability to sue workers and unions for damages incurred during strikes. The measure, repeatedly vetoed by former President Yoon Suk Yeol, returned to the spotlight during the first televised debate of the campaign. The ruling People Power Party’s candidate, Kim Moon-soo, criticized the act as unconstitutional, while Lee defended it, citing support from both South Korea’s Constitutional Court and the International Labour Organization. The origins of the bill trace back to a turbulent labor dispute at SsangYong Motor in 2009, where a 77-day strike ended in violence and long-term trauma for many of the workers involved. A Supreme Court ruling in 2014 deemed the strike illegal and imposed 4.7 billion won in damages on the workers. In response, civic groups launched a donation campaign, symbolized by yellow envelopes — a gesture that later gave the act its name. If passed, the legislation would extend protections to indirectly employed workers and shield unions from excessive financial penalties. But business leaders warn it could embolden strike activity and deter foreign investment. A 2024 survey by the Federation of Korean Industries found that 59 percent of foreign firms operating in South Korea were skeptical of the proposal, fearing a 20 percent uptick in strike activity and a potential 15.4 percent drop in foreign direct investment. “The act could foster a culture of resolving disputes solely through strikes, rather than dialogue and cooperation,” said Lee Sang-ho, vice president of the FKI’s economic research department. Others have criticized the bill’s legal underpinnings. Cho Dong-geun, a professor emeritus at Myongji University, said it defies civil law norms. “The act obscures the distinction between legal and illegal strikes,” he said, warning that it “disrupts the fine line that defines the relationship between employers and employees.” Lee’s pro-labor vision goes even further. He has pledged to introduce a 4.5-day workweek with no reduction in pay — a move aimed at reducing South Korea’s notoriously long working hours. In a Facebook post in April, he called for aligning the country’s labor standards with the OECD average by 2030, with the ultimate goal of transitioning to a four-day week. Labor unions have welcomed Lee's idea, with both the Korean Confederation of Trade Unions and the Federation of Korean Trade Unions voicing support. Pilot programs at companies like SK Telecom and POSCO have shown early signs of feasibility, allowing employees to take alternating Fridays off. Business groups, however, remain wary. On May 8, leaders of South Korea’s five major business lobby groups, including SK Group Chairman Chey Tae-won, met with Lee to voice concerns that the reduced workweek could hamper competitiveness and widen disparities between large corporations and small firms. According to a recent survey by the Korea Federation of SMEs, 42.4 percent of small business operators already struggle under the current 52-hour workweek. Lee’s labor agenda also includes enhancing workplace safety. He has pledged greater investment in healthcare and protections for workers exposed to hazardous environments. Parallel to his labor reforms, Lee has laid out an ambitious economic plan to boost fairness and transparency in South Korea’s markets. He has promised to crack down on stock price manipulation and pledged to implement a “one-strike-out” policy targeting malicious traders. Central to his economic vision is South Korea’s long-anticipated inclusion in the Morgan Stanley Capital International (MSCI) World Index — a designation that could attract significant foreign investment and enhance market stability. The country has pursued MSCI “developed market” status since 2008, and recent signs suggest momentum is building. In late 2024, the Financial Services Commission expressed optimism, citing progress in transparency and market infrastructure. Lee has also promised to address the so-called “Korea Discount,” a term used to describe the persistent undervaluation of South Korean stocks. In a social media post on May 25, he declared his intention to push the benchmark KOSPI index to 5,000 points — a level that would signal unprecedented investor confidence. “The revitalization of our stock market is the fastest and most accessible path to healthy asset growth for the people,” he wrote. As the June 3 election nears, Lee’s sweeping proposals — from labor rights to market reform — have sparked vigorous debate over whether South Korea can balance ambitious social change with economic competitiveness. But for Lee, the answer is clear. “We must boldly shift our policies to achieve a sustainable work-life balance,” he said. “Only then can our economy and our people truly thrive.” 2025-05-28 11:01:50

Bill proposed to curb foreign real estate purchases amid surge in Chinese investment SEOUL, May 27 (AJP) - A South Korean lawmaker has introduced legislation aimed at curbing foreign real estate acquisitions in the greater Seoul area, citing a sharp rise in Chinese purchases that he says are fueling speculation and distorting the housing market. Representative Koh Dong-jin of the ruling People Power Party submitted the bill to the National Assembly on Tuesday, proposing mandatory reciprocity measures and new permit requirements for non-citizens seeking to buy land in Seoul, Gyeonggi Province, and Incheon. The proposed restrictions come amid mounting concern over foreign investment in the country’s residential property market. According to government data cited by Koh, foreign real estate purchases in South Korea rose 12 percent in 2024 to more than 17,000 transactions. Of those, Chinese nationals accounted for approximately 65 percent, or 11,346 buyers. The capital region — already under pressure from soaring housing prices — has become a focal point. Gyeonggi Province recorded the highest number of foreign buyers at 7,842, followed by Incheon with 2,273 and Seoul with 2,089. Koh argued that the current legal framework creates a form of “reverse discrimination,” as South Korean citizens are subject to tight mortgage regulations, while some foreign buyers, particularly Chinese nationals, are able to obtain significant financing through banks in their home countries. “While our citizens are bound by stringent loan restrictions when purchasing homes, foreign nationals — especially from China — can access large-scale funding from overseas institutions and buy property here with relative ease,” Koh said during a press briefing. Although reciprocity clauses already exist in South Korean law, they are not compulsory and lack the enforcement mechanisms needed for implementation, Koh said. His bill seeks to make such measures mandatory, requiring the government to align real estate access for foreigners with the policies that South Korean nationals face in their respective countries. “When countries like China impose discriminatory restrictions on South Korean buyers, our government should respond with equivalent measures,” Koh said. 2025-05-27 16:05:54

Samsung-Google partnership revives interest in smart glasses SEOUL, May 27 (AJP) - Google’s announcement of a smart glasses collaboration with Samsung Electronics at its annual developer conference has injected new life into the extended reality (XR) market, following a period of waning consumer and investor enthusiasm. The partnership marks a significant push by two of tech’s most influential players to regain momentum in the XR sector, a broad category that encompasses augmented reality (AR), virtual reality (VR), and other technologies blending the physical and digital worlds. According to a report released Tuesday by the research arm of KPMG Samjong Accounting, global XR patent filings have surged from just 738 in 2013 to 14,958 in 2023. The growth suggests sustained innovation in the field, even as hype around the so-called metaverse — a term popularized during the pandemic — has cooled. Microsoft holds a commanding lead in XR intellectual property, with 8,393 patents to its name, positioning it as the front-runner in AR and VR technology development. LG Electronics follows with 5,681 filings, with a focus on device portability and user experience. Intel, Meta, and Samsung round out the top five. Despite Microsoft’s patent dominance, Meta currently leads the XR hardware market, claiming 60.5 percent of global device sales as of the second quarter of last year, according to industry data. Sony and Apple trail with 10.4 percent and 9.1 percent, respectively. The competitive landscape is expected to shift in the second half of 2025, when Samsung is slated to launch its own XR headset, code-named Project Moohan. The device, developed in collaboration with Google, is poised to leverage Google’s Gemini AI model for advanced contextual understanding and will support Android-based applications through Google Play — potentially giving it an edge in the evolving XR ecosystem. Chinese tech firms are also stepping up their efforts. This year, Rokid debuted AI-powered smart glasses incorporating Alibaba’s large language model, while TCL Technology introduced ultra-lightweight smart glasses equipped with ChatGPT-based features. 2025-05-27 10:47:36

OpenAI sets up South Korean subsidiary SEOUL, May 26 (AJP) - OpenAI said on Monday that it has established a Korean subsidiary and plans to open its first office in Seoul in the coming months. The move is part of the company’s broader international strategy, dubbed “OpenAI for Countries,” which aims to deepen partnerships and infrastructure investments worldwide. Over the past year, OpenAI has opened offices in 11 cities, including London, Dublin, Brussels and Paris. Seoul will join Tokyo and Singapore as one of the company’s key hubs in Asia. “We see Korea’s comprehensive AI ecosystem as one of the most promising in the world — from silicon to software, and from students to seniors,” Jason Kwon, OpenAI’s chief strategy officer, said in a statement. He emphasized the company’s commitment to supporting the development of “truly Korean AI.” Kwon said the new office would help strengthen ties with South Korean policymakers, businesses, developers and researchers. He has met with officials from both the ruling People Power Party and the opposition Democratic Party to discuss the country's AI infrastructure agenda. Both parties have identified artificial intelligence as a priority ahead of the June 3 presidential election. South Korea has emerged as a key market for OpenAI. The company said the country ranks second globally in paid ChatGPT subscriptions, trailing only the United States. The number of weekly active users in South Korea has surged more than fourfold in the past year, placing it among the top 10 markets by user volume. South Korean developers using OpenAI’s application programming interface (API) also rank among the top 10 globally. Corporate adoption of the company’s paid services places the country in the top five markets worldwide. OpenAI has already forged partnerships with major South Korean firms, including tech giant Kakao, gaming company Krafton and telecom leader SK Telecom. It has also signed a financial cooperation agreement with the state-run Korea Development Bank. Despite OpenAI’s growing presence in the country, the company offered few details about whether it plans to build local data centers. Kwon said the firm has a “strong interest” in expanding AI infrastructure in South Korea, but declined to provide a timeline or scope for any future construction. 2025-05-26 16:05:36

Homeplus lease terminations leave small businesses in limbo SEOUL, May 26 (AJP) - Homeplus, a South Korean retail chain undergoing court-supervised restructuring, has begun notifying landlords of plans to terminate leases at 17 stores, deepening uncertainty for hundreds of small businesses operating within those locations. The potential closures span major metropolitan areas, including Seoul, Incheon, and Busan, and affect stores in Gayang, Ilsan, Siheung, Jamsil, and other key commercial districts. An estimated 200 to 300 small businesses operate across the affected stores, typically with 10 to 30 vendors per location. Roughly half of those vendors are brand franchisees; the remainder are independent operators, many of whom lack the legal protections afforded to traditional retail tenants. As vendors within large discount chains, they occupy a regulatory gray area, leaving them without access to compensation for key money — a standard practice in South Korean commercial leasing. Homeplus entered corporate rehabilitation proceedings last month, a process that has already led to noticeable declines in customer traffic and revenue. Several vendors report sales drops of 20 to 30 percent since the announcement, and many say they are unsure whether they can continue operating. Communication from Homeplus management has been sporadic, according to affected vendors. Some say they learned of the potential closures through media coverage rather than official notice, further fueling frustration and anxiety. At the center of the crisis are protracted negotiations with landlords — primarily real estate investment trusts — over significant rent reductions and lease transfer terms for sub-tenants. Homeplus is reportedly seeking rent cuts of up to 50 percent. The impasse has already delayed key milestones in the company’s rehabilitation timeline, including required reporting to the court. 2025-05-26 14:48:27

South Korea launches $29 billion battery storage initiative SEOUL, May 26 (AJP) - South Korea has launched its most ambitious energy storage initiative yet, opening the door to what officials estimate could become a $29 billion market by 2038 — offering a much-needed boost to domestic battery manufacturers grappling with a global slowdown in electric vehicle demand. The Ministry of Trade, Industry and Energy unveiled plans for a nationwide tender to install 540 megawatts of battery energy storage systems (BESS), marking the country's first major government-led deployment of its kind. The project is part of a broader effort to modernize South Korea’s power grid and support the transition to renewable energy. South Korea’s battery makers, including LG Energy Solution and SK On, have been squeezed by waning EV subsidies and shifting demand, prompting a strategic pivot toward North America, where demand for grid storage is accelerating. Under the terms of the government tender, operators will be required to construct battery storage facilities by 2026 and operate them for 15 years, managing the systems in coordination with the Korea Power Exchange. The installations must meet a combined storage capacity of 3,240 megawatt-hours — enough to power approximately 40,000 electric vehicles equipped with 80-kilowatt-hour batteries. The total investment is estimated at around 1 trillion won, or $731 million. The initiative is closely tied to South Korea’s 11th Basic Plan for Electricity Supply and Demand, which outlines an aggressive ramp-up in renewables. The plan aims to boost the share of green energy from 8.4 percent of the national energy mix in 2023 to 29.2 percent by 2038. Solar and wind generation capacity is expected to quadruple — from 30 gigawatts to 121.9 gigawatts—necessitating large-scale energy storage to stabilize supply amid fluctuating output. But South Korea’s battery industry faces mounting pressure from China, whose manufacturers, led by CATL, currently account for nearly 90 percent of global energy storage battery capacity. CATL expanded its footprint in January by establishing a South Korean subsidiary, signaling an aggressive push into the local market. CATL also dominated the global EV battery market last year with a 37.9 percent share, far outpacing LG Energy Solution’s 10.8 percent, according to industry data. In an effort to shield domestic producers and encourage local development, the South Korean government is introducing selection criteria for the BESS project that go beyond price. Bidders will be scored on a 100-point scale, with 24 points allocated for domestic industrial contribution and job creation. Authorities will also evaluate the sourcing of critical battery materials such as cathodes, anodes and electrolytes. “Energy storage systems are essential for integrating renewables, which are inherently volatile,” said Yoo Seung-hoon, a professor of future energy convergence at Seoul National University of Science and Technology. “The right policies must incentivize companies to use domestically produced secondary batteries.” 2025-05-26 11:15:11

HD Hyundai Electric to supply high-voltage transformers to Scottish firm SEOUL, May 23 (AJP) - HD Hyundai Electric, a subsidiary of South Korea’s HD Hyundai specializing in power equipment and energy solutions, announced on Friday that it has secured a contract to supply four ultra-high voltage transformers to SP Energy Networks, a major utility in Scotland. The agreement marks HD Hyundai Electric’s first foray into the Scottish market. Key representatives from both companies attended the signing ceremony, including Cho Seok, vice chairman of HD Hyundai Electric, and Eddie Mulholland, SP Energy Networks’ director of process and technology. Under the contract, HD Hyundai Electric will supply four 400-kilovolt transformers as part of a substation expansion project aimed at bolstering the stability of power supply across Scotland’s central and southern regions. Final delivery is slated for the second half of 2028. The company has seen a surge in European demand, reporting $437.75 million in orders from the continent so far in 2024. That figure reflects an average annual growth rate of approximately 44 percent since 2020, as HD Hyundai Electric seeks to strengthen its presence in what it describes as one of the world’s most demanding and technically advanced energy markets. “Europe is a conservative, high value-added market with high technical barriers, where orders are won based on quality and technological strength,” an HD Hyundai Electric official said in a statement. “We intend to broaden our footprint in Europe through enhanced research and development and deeper engagement with our customer base.” 2025-05-23 15:09:32