Korea's job growth slows to 6-year low as young, middle-aged workers struggle A job fair held in Incheon, Sept. 26, 2024/ Yonhap SEOUL, February 20 (AJP) - South Korea’s labor market saw its slowest job growth in six years during the third quarter of 2024, as employment opportunities for workers in their 20s and 40s declined at an unprecedented rate, according to government data released Thursday. The number of jobs increased by 246,000 from a year earlier, marking the smallest third-quarter gain since 2018, Statistics Korea reported. The deceleration continues a downward trend from the 597,000 jobs added in 2022 and 346,000 in 2023. The losses were particularly severe among younger and middle-aged workers. Jobs for workers in their 20s declined by 146,000, while positions for those in their 40s dropped by 77,000 — the sharpest declines recorded since data collection began in 2017. By contrast, employment among those aged 60 and older surged by 274,000. Workers in their 50s gained 119,000 jobs, while those in their 30s saw an increase of 66,000. “While short-term employment opportunities have expanded for older workers, major industries are slowing their hiring, exacerbating job losses among younger workers and those in their 40s,” said Choi Jae-hyuk, deputy director of statistical research at Statistics Korea. 2025-02-20 15:55:20

Lotte Chemical to sell Pakistan unit to address liquidity concerns An aerial view of Lotte World Tower/ Getty Images Bank SEOUL, February 20 (AJP) - Lotte Chemical announced plans to sell its Pakistan subsidiary, Lotte Chemical Pakistan (LCPL), for 97.9 billion won ($67.9 million) as it seeks to address concerns over its financial health. The Seoul-based firm will divest its entire 75.01 percent stake in LCPL to a consortium comprising Pakistan’s Asia Park Investment and the United Arab Emirates-based Montage Oil DMCC. The transaction is expected to close in the first half of 2025. Lotte Chemical acquired LCPL in 2009 for approximately 14.7 billion won. The subsidiary operates a plant with an annual production capacity of 500,000 tons of purified terephthalic acid (PTA), a critical component in polyester fibers and plastic bottles. In 2023, LCPL reported sales of 532 billion won and an operating profit of 19.8 billion won. Since 2022, Lotte Chemical has received 29.6 billion won in dividends from LCPL, bringing the total value of its exit from the unit to approximately 127.5 billion won. The sale follows a failed attempt to offload the business to a local chemical company, a deal that collapsed due to regulatory hurdles. The company framed the divestiture as part of a broader strategy to streamline operations. “We will continue to optimize our portfolio by divesting non-core assets to strengthen our competitiveness and operational efficiency,” a Lotte Chemical official said. Lotte Chemical has been grappling with investor concerns over liquidity risks. In November, its parent conglomerate, Lotte Group, pledged the Lotte World Tower as collateral to reassure creditors. The group’s chairman later warned affiliates of an “existential threat” to the business. 2025-02-20 13:45:36

Celltrion, SK Bio brace for US tariff fallout Celltrion's plant/ Courtesy of Celltrion SEOUL, February 20 (AJP) - South Korean pharmaceutical and biotechnology companies are scrambling to devise contingency plans following U.S. President Donald Trump’s announcement of proposed tariffs of 25 percent or higher on imported drugs, a move that could disrupt one of their most critical export markets. Trump's announcement has sent ripples through South Korea’s pharmaceutical sector, where leading firms such as Celltrion and SK Biopharmaceuticals have established strong footholds in the U.S. market through various distribution channels. Celltrion sought to reassure shareholders, stating that it has already implemented preemptive measures to minimize the potential impact of tariffs in 2025. “As of the end of January, we have transferred approximately nine months’ worth of inventory for our products scheduled for U.S. sale in 2025,” the company said in a statement on Wednesday. In anticipation of regulatory shifts, Celltrion is pivoting toward exporting drug substances rather than finished products, as raw materials are expected to be subjected to lower tariff rates. The company also confirmed it is evaluating the possibility of securing U.S.-based production facilities for manufacturing active pharmaceutical ingredients if necessary. SK Biopharmaceuticals, which exports its epilepsy treatment through a Canadian contract manufacturer, said that it is considering alternative production arrangements, including the possibility of transferring production to U.S.-based facilities, as Canada could also be subjected to tariffs under Trump’s administration. Other major industry players, including Samsung Biologics, Samsung Bioepis, and Yuhan Corp., are closely monitoring the situation as they assess the potential ramifications for their U.S. operations. 2025-02-20 10:00:41

POSCO bets on innovation as tariffs, Chinese steel shake industry Editor's Note: This article is the seventh installment in our series on Asia's top 100 companies, exploring the strategies, challenges, and innovations driving the region's most influential corporations. SEOUL, February 19 (AJP) - For the 15th consecutive year, South Korean steelmaker POSCO has retained its title as the "World's Most Competitive Steelmaker," according to global steel analysis firm World Steel Dynamics. POSCO ranked as the world’s sixth-largest steelmaker by production volume in 2015 and has held the seventh spot through 2022 and 2023. As part of its sustainability efforts, POSCO recently achieved a significant milestone by localizing the manufacturing technology for electrode rods, a crucial component in electric furnace operations. These furnaces, which generate significantly lower carbon emissions than traditional blast furnaces, represent a key part of the company’s strategy to reduce its environmental footprint. However, POSCO — operating under its holding company, POSCO Holdings — faces mounting global challenges. The downturn in the electric vehicle market and disruptions in international trade have intensified pressures, exacerbated by U.S. President Donald Trump’s decision to impose a 25 percent tariff on imported steel and aluminum. A POSCO Holdings official told AJP that the company is closely monitoring the situation and will actively support government-led negotiations on the tariff. “We are maintaining vigilant oversight of the situation and will strengthen our efforts to pioneer the market through quality competitiveness, particularly in products that are challenging to manufacture in the United States,” the official said. Legacy of Growth POSCO was established on April 1, 1968, as part of South Korea’s drive for steel self-sufficiency, with Park Tae-joon serving as its first president. With substantial financial backing from the United States and Japan, the company reached its first milestone by producing its inaugural batch of molten iron in 1973. By the following year, POSCO had surpassed $100 million in steel exports. In 2022, the company underwent a strategic restructuring, creating POSCO Holdings as a parent entity focused on green energy materials, including lithium, nickel, hydrogen, and secondary battery components. Its steel-producing subsidiary, POSCO, remains Korea’s leading steel manufacturer. POSCO Holdings reported a 38.5 percent decline in annual operating profit for 2024, falling to 2.17 trillion won, reflecting the impact of a global steel market downturn and weakened demand in the electric vehicle sector. Sales declined by 5.8 percent to 72.69 trillion won, while net profit dropped 48.6 percent to 948 billion won. POSCO’s core steel business saw a 29.3 percent decline in operating profit, while its battery materials subsidiary, POSCO Future M, reported a sharp drop in operating profit to 1 billion won from 36 billion won year-over-year, affected by falling lithium and nickel prices as well as a U.S. Foreign Entity of Concern designation deferral. Beyond U.S. tariffs, POSCO faces additional pressure from an influx of low-cost Chinese steel flooding the market. Among the world’s top 10 steelmakers by volume, five are Chinese, including the industry’s largest producer. According to the Korea International Trade Association, South Korea’s steel imports from China surged 55.5 percent, from $6.67 billion in 2020 to $10.37 billion in 2024. In response, the South Korean government is considering anti-dumping measures to protect domestic manufacturers. While regional rival Nippon Steel is advancing its bid to acquire U.S. Steel, potentially strengthening its foothold in the American market, POSCO remains focused on navigating its own challenges. Analysts suggest that despite the U.S. tariff, Korean steelmakers may still find opportunities, as they are no longer constrained by the quota system that previously limited exports. POSCO Holdings and POSCO Group Chairman Chang In-hwa addressed these challenges in his New Year’s address on Jan. 2, warning that the company’s steel, battery materials, and engineering divisions face existential threats. Chang underscored the necessity of turning adversity into opportunity, emphasizing "absolute technological superiority" as the company’s cornerstone for maintaining competitiveness. Despite the current economic downturn, the steel giant remains committed to industry leadership, pledging to set new standards for environmental, social, and governance (ESG) practices in the sector. 2025-02-20 09:52:03

Korean government eyes railway underground project to revive construction sector An SRT train at Busan Station/ Getty Images Bank SEOUL, February 19 (AJP) - The South Korean government on Wednesday unveiled a 4.3 trillion won ($2.98 billion) initiative to move railway infrastructure underground in three major cities, an effort aimed at revitalizing the country’s struggling construction sector. Announced during an economic policy meeting at the Government Complex Seoul, the initiative is part of a broader social overhead capital (SOC) strategy. The project will cover railway sections in Busan, Daejeon, and Ansan, with construction expected to begin in approximately three years. The move comes at a critical time for South Korea’s construction industry, which has been grappling with a prolonged downturn. The industry’s struggles have already led to financial turmoil among major regional builders. In recent months, Sin Taeyang Construction in Busan, JEIL Engineering & Construction in North Jeolla Province, and Daezer Construction in South Gyeongsang Province have filed for bankruptcy. In Busan, the government plans to construct an artificial ground spanning approximately 370,000 square meters between Busanjin Station and Busan Station. The project, with an estimated cost of 1.4 trillion won, is expected to free up valuable urban space for development. A similar effort is planned in Daejeon, where 1.4 trillion won will be allocated to relocating railway switchyards underground, unlocking 380,000 square meters for redevelopment. In Ansan, a 1.5 trillion won project will move tracks beneath the surface between Choji Station and Jungang Station, facilitating the creation of a new urban center. To further bolster the construction industry, the government intends to frontload 70 percent of its annual social infrastructure budget, injecting 12.5 trillion won into the sector in the first half of 2025. The Construction Association of Korea welcomed the government’s plan, describing it as “sweet rain in a drought” for an industry struggling with dwindling orders. The railway initiative is part of a broader economic stimulus package that also includes port regeneration projects in Busan and Incheon, as well as plans for semiconductor industrial complexes in Yongin. 2025-02-19 16:54:37

Political uncertainty stalls Korea's plan to develop next-generation reactors Nuclear reactors in Ulsan/ Courtesy of Korea Hydro & Nuclear Power SEOUL, February 19 (AJP) - South Korea’s ambitious plans for Small Modular Reactor (SMR) development have encountered setbacks as political disputes stall progress, while global competitors advance in the next-generation nuclear market. SMRs have emerged as a transformative force in power generation, offering cost-effectiveness and enhanced safety features, with expenses projected to be reduced by up to 33 percent compared with aging coal plants. According to industry experts, the global SMR market is expected to reach commercialization by 2030. The small reactors have also become crucial to the artificial intelligence boom, as mass computing requires unprecedented levels of electricity. Major technology firms, including Amazon, have invested in companies such as X-energy to secure their energy needs. Despite the global momentum, South Korea has struggled to advance beyond its initial plan to deploy a single SMR unit by 2035. The country has yet to select a construction site. Government agencies have also failed to provide clarity. The Ministry of Science and Technology missed its October 2024 deadline for a next-generation nuclear roadmap, while the Industry Ministry’s 2050 nuclear blueprint remains in limbo amid political turbulence surrounding President Yoon Suk Yeol. Further complicating matters, South Korea’s proposed K-ARDP program, modeled after the U.S. Advanced Reactor Demonstration Program (ARDP), faces uncertainty due to budget constraints. While South Korea’s SMR ambitions remain stalled, international counterparts are surging ahead, with roughly 80 designs under development worldwide. The United States leads with 20 designs, followed by Russia with 17 and China with nine. “SMRs are projected to supply about half of future nuclear power generation,” said Jeong Dong-wook, a professor of energy systems engineering at Chung-Ang University. “As this is an inevitable global technological trend, Korea needs to implement bold support measures, including regulatory reforms.” 2025-02-19 11:20:52

TikTok booms in Korea despite privacy concerns linked to DeepSeek TikTok's logo/ Reuters-Yonhap SEOUL, February 19 (AJP) - ByteDance’s TikTok has solidified its foothold in South Korea’s social media landscape, surpassing Facebook in combined monthly active users, even as concerns mount over data transfers linked to DeepSeek, a Chinese artificial intelligence app. According to data from mobile analytics firm Mobile Index, the short-video platform and its lightweight counterpart, TikTok and TikTok Lite, recorded approximately 4.9 million and 4.8 million monthly active users, respectively, in January. The combined user base of 9.7 million outpaced Facebook’s 8.6 million monthly active users but remained well behind Instagram’s 20 million users in the country. TikTok’s growth comes amid renewed scrutiny after South Korea’s Personal Information Protection Commission (PIPC) disclosed Tuesday that DeepSeek had transferred user data to ByteDance in violation of local privacy laws. In response, the commission has temporarily suspended new downloads of DeepSeek’s services but has yet to determine how the transferred data was utilized. The privacy concerns reflect broader international apprehensions surrounding the Chinese-owned platform. In the United States, where nearly half the population uses TikTok regularly, the platform remains a political flashpoint. While President Donald Trump has extended a previously imposed ban on the app by 75 days, his administration is reportedly pressuring ByteDance to divest its U.S. operations. Prospective buyers are now engaging directly with the White House rather than ByteDance, according to media reports. Despite these regulatory challenges, TikTok continues to gain traction in South Korea. Both the app maintained strong engagement, consistently drawing more than three million weekly active users in early February. 2025-02-19 11:08:03

Korean newspapers to file complaint against Naver over AI training Combined logos of the Korean Association of Newspapers (KAN) and Naver/ Courtesy of KAN and Naver SEOUL, February 18 (AJP) - The Korean Association of Newspapers (KAN) announced plans to file a complaint with the nation’s antitrust agency against Naver, alleging the company used news content without permission to train its artificial intelligence models. The move follows Naver’s recent acknowledgment that it had utilized news articles to develop its generative AI services, including HyperCLOVA and HyperCLOVA X. “With this complaint, we aim to establish a fair trade framework between newspaper companies and AI firms while ensuring the proper recognition of news content value,” the KAN said in a statement. The association contends that the unauthorized use of news articles for AI model training violates copyright laws and constitutes an abuse of market dominance under fair trade regulations. A task force comprising ten digital strategy executives has been evaluating the legality of AI companies’ use of news content. Key concerns include the lack of compensation for publishers, the use of news articles in language model training, and AI search services reproducing content without proper attribution. The KAN also plans to push for legislative reforms, including mandatory disclosure of AI training data sources and amendments to copyright laws to strengthen protections for news content. In response, Naver stated, “We have not officially received details of the complaint. However, since June 2023, following a revision of our terms of service, we have not been using news service data without consent.” 2025-02-18 16:38:45

New Balance to establish Korean subsidiary in 2027 New Balance's flagship store in Seongsu-dong, Seoul/ Courtesy of E-Land World SEOUL, February 18 (AJP) - New Balance plans to establish a South Korean subsidiary in 2027, a move that could signal a shift away from its longstanding partnership with E-Land World, which has overseen the brand’s operations in South Korea since 2008. The Boston-based athletic wear manufacturer said it would extend its licensing agreement with E-Land World until 2030, covering children's footwear and apparel lines. The decision comes as New Balance solidifies its presence in South Korea, where sales surpassed 1 trillion won (approximately $691.8 million) last year, making it the second-largest sportswear brand in the market, trailing only Nike. The new subsidiary is scheduled to begin operations on Jan. 1, 2027. While E-Land World is expected to remain a key business partner beyond that date, the specifics of their future collaboration remain unclear. Industry analysts suggest the arrangement could resemble that of luxury brand Thom Browne, which transitioned to direct operations while maintaining a retail management contract with Samsung C&T, its former licensee. However, shifting to direct operations in South Korea has posed challenges for some global brands. Puma, for instance, struggled after ending its 13-year licensing agreement with E-Land Group in 2008, with sales plunging nearly 50 percent from 200 billion won. “New Balance is eager to establish a direct presence in the Korean market, but severing ties with E-Land Group, which has successfully managed the brand for years, would be a delicate matter,” said an industry insider familiar with the negotiations. An E-Land Group official said that while details regarding the subsidiary remain undecided, dealer relationships will play a crucial role in determining future contract terms. 2025-02-18 15:52:47

Korea's move to regulate platforms faces US trade pressure U.S. President Donald Trump lands on West Palm Beach, Florida, Feb. 16, 2025. Reuters-Yonhap SEOUL, February 18 (AJP) - South Korea’s attempt to rein in dominant online platforms has hit a roadblock, as recent trade threats from the Trump administration cast uncertainty over the initiative. The Korea Fair Trade Commission (KFTC) is reassessing its position on the Platform Competition Promotion Act (PCPA), a proposed law designed to curb unfair practices by major digital platforms. The bill has faced resistance from Washington, raising concerns over potential trade frictions. “We will strengthen communication with the U.S. and coordinate with the National Assembly to ensure that changes in the trade environment are fully considered during the legislative process,” KFTC Chairman Han Ki-jeong said Monday at the Government Complex in Sejong. The proposed legislation seeks to shift the burden of proof onto platform operators in cases involving four types of violations, including self-preferencing and tied selling. It would also increase potential fines from 6 percent to 8 percent of revenue for noncompliance. Momentum for the regulatory push grew after the Tmon-WeMakePrice crisis in July, which underscored the need for stronger oversight of online platforms and galvanized public support for intervention. However, the initiative has faced stiff opposition from U.S. officials, particularly following comments by U.S. Trade Representative nominee Jamison Greer. On Feb. 6, Greer denounced the measure as “intolerable,” arguing that it discriminates against American companies. If enacted, the law would apply to platforms with market shares exceeding 60 percent and user bases of more than 10 million — a threshold that would encompass U.S. tech giants such as Google and Apple. Google is already under scrutiny by the KFTC over allegations of bundling its YouTube Music service with other offerings, though a final decision on the case has yet to be made. Facing mounting pressure, South Korean lawmakers are seeking to salvage the bill by emphasizing similar regulatory efforts underway in the United States. The issue is expected to be a focal point in an upcoming meeting of the National Assembly’s Policy Committee. “Even in the U.S., there is growing support for regulating big tech companies like Google and Apple to create more opportunities for new technology firms,” said Kim Nam-keun, a lawmaker from the opposition Democratic Party. 2025-02-18 14:25:22