U.S. investors asks Washington to probe Seoul's treatment of Coupang SEOUL, January 22 (AJP) -Two major U.S. investors in Coupang Inc. have asked the U.S. government to investigate its Korean counterpart over what they describe as discriminatory treatment of the U.S.-based e-commerce platform commanding dominant market in Korea, raising the prospect that a corporate dispute could spill into a bilateral trade issue. Technology investment firms Greenoaks and Altimeter said Thursday that they have petitioned the U.S. Trade Representative (USTR) to examine South Korea’s actions under U.S. trade law and consider remedies, including tariffs or other measures. Separately, the investors notified the South Korean government of their intent to file arbitration claims under the U.S.–Korea Free Trade Agreement (KORUS). The moves follow a consumer data breach disclosed by Coupang in November, after which a number of Korean authorities launched sweeping investigations and lawmakers called for tougher penalties. The investors argue that the government response went far beyond normal regulatory enforcement and has inflicted heavy losses on shareholders. Coupang reported that personal data of about 33 million users in South Korea had been compromised, triggering public backlash, regulatory scrutiny and a wave of lawsuits from consumers and investors. Since the disclosure on Nov. 30, Coupang’s New York–listed shares have fallen about 27 percent, according to market data. Greenoaks and Altimeter allege that South Korean authorities mounted a “whole-of-government” response against Coupang, involving labor, tax, financial and customs probes that they say are unrelated to the data incident. They claim the actions amount to discriminatory treatment of a U.S.-based company operating in Korea. “Our main concern is the scale and speed of the government’s response, which has led to significant damages and threatens the value of our investment,” said Marney Chee, a partner at law firm Covington, which represents Greenoaks. The investors said their notice under KORUS triggers a 90-day consultation period before full arbitration proceedings can begin. Separately, the USTR has up to 45 days to decide whether to launch a formal investigation under Section 301 of the U.S. Trade Act of 1974, a step that could lead to hearings and potential U.S. countermeasures. Seoul has stood firm on its stance and rejected claims of discrimination. President Lee Jae Myung, who previously called for tougher penalties following the data breach, said at a news conference Wednesday that South Korea would address the issue “fairly according to the law and principles,” emphasizing the country’s sovereignty. Trade Minister Yeo Han-koo said earlier this month that the government was not singling out Coupang and that U.S. officials had “misunderstandings.” Speaking after meetings in Washington with USTR Jamieson Greer and members of Congress, Yeo said the data breach — which he described as unprecedented — and Coupang’s response should be treated separately from trade and diplomatic issues. Greenoaks was founded by Neil Mehta, a Coupang board member. Greenoaks and related entities hold more than $1.4 billion worth of Coupang shares, according to filings. In 2023, Coupang partnered with Greenoaks to acquire luxury fashion platform Farfetch in a $500 million deal. Altimeter is a technology-focused investment firm investing across public and private markets. 2026-01-22 21:11:22

Washington makes a rare Korean won-supporting remark SEOUL, January 15 (AJP) - In a rare departure from Washington’s long-held opposition to currency intervention, the U.S. Treasury secretary echoed Seoul’s concerns over the weak Korean won, lending verbal support to efforts to stabilize the currency. U.S. Treasury Secretary Scott Bessent met with South Korea’s Deputy Prime Minister and Finance Minister Koo Yun-cheol on Monday (local time) to discuss market developments and preparations for the upcoming critical minerals ministerial meeting, according to a Treasury Department readout released Wednesday. During the meeting, the two officials exchanged views on economic conditions in both countries and ways to deepen bilateral economic ties. Bessent specifically addressed the recent depreciation of the Korean won, noting that the currency’s weakness does not align with South Korea’s underlying economic fundamentals. He emphasized that excessive volatility in foreign-exchange markets is undesirable, while underscoring South Korea’s role as a critical U.S. partner in Asia — particularly given the strength of its key industries that support the American economy, the readout said. The remarks mark an unusual shift in tone for Washington, which has traditionally cautioned Seoul against interventionist moves seen as supporting exports at the expense of the U.S. dollar and trade balance. Bessent and Koo also discussed the full and faithful implementation of President Donald Trump’s Korea Strategic Trade and Investment Deal. Bessent said he expects the rollout to proceed smoothly and stressed that the agreement would further deepen bilateral economic cooperation and contribute to the revitalization of U.S. industrial competitiveness. The comments appeared to have an immediate market impact. The dollar weakened sharply against the won overnight, sending the U.S. dollar down 13.50 won to 1,465.00 won. 2026-01-15 06:15:19

OPINION: Musk may be wrong on doctors — Seoul still needs to listen Elon Musk has a habit of compressing time. What most people describe as decades, he calls years. What institutions treat as distant futures, he presents as near inevitabilities. The result is often exaggeration. Occasionally, it is also illumination. Musk lately suggested that humanoid robots could surpass the world’s best human surgeons within three years. The remark, made on the Moonshots podcast hosted by physician and engineer Peter Diamandis, was quickly dismissed by medical experts. Arthur Caplan, a bioethicist at New York University, called the timeline “not credible,” pointing to the complexity and variability of human surgery. Three years is almost certainly wrong. But focusing on the timeline misses the significance of the question Musk was really posing: what happens to healthcare when expertise itself becomes scalable? Musk’s argument rests on a simple observation. Training a great surgeon takes more than a decade. Even then, human doctors are constrained by fatigue, limited hours and the inevitability of error. Medical knowledge evolves faster than any individual can fully absorb. Machines, by contrast, do not tire, do not forget and can replicate best practices endlessly once trained. This is not a claim that robots will replace surgeons tomorrow. It is a claim that the bottleneck in healthcare may soon shift from human availability to system design. That idea feels distant — until it suddenly does not. At CES this year, the most consequential advances were not flashy consumer devices but what the industry now calls “physical AI”: systems that can perceive, reason and act in the real world. Humanoid robots are moving beyond scripted demonstrations into logistics, manufacturing and service roles. Robotics firms are no longer asking whether machines can move reliably, but where they should be deployed first. Healthcare is already on that list. Robotic-assisted surgery has been standard in certain procedures for years. AI systems now read radiology images with accuracy rivaling specialists. What is changing is integration: software, sensors, chips and mechanical precision are improving together, not in isolation. This matters particularly in Korea, where the debate over doctor shortages has returned with familiar intensity. Government projections suggest that if current trends hold, Korea could face a shortfall of up to 4,923 doctors by 2035 and more than 11,000 by 2040. The policy response has been predictably narrow: how many medical school seats to add, and how to manage resistance from the medical profession. The debate is framed almost entirely as a numerical problem. Musk’s provocation exposes the limitation of that framing. It assumes that the future of medicine will resemble the past — only with more people working harder. That assumption is increasingly fragile. Korea is not a country lacking in medical or industrial capacity. It is one of the few nations capable of producing the full robotics value chain domestically, from semiconductors to precision manufacturing. Its clinical outcomes in cancer treatment, organ transplantation and cerebrovascular surgery already rank among the world’s best. Korean hospitals routinely train foreign doctors who return home carrying Korean techniques. The global spread of SMILE LASIK surgery is a revealing example. Initially, the procedure was limited by the skill threshold required of surgeons. Its global expansion accelerated only after Korean clinicians refined surgical planning and execution methods, effectively turning individual expertise into a reproducible system. Today, SMILE LASIK is performed in more than 60 countries. This is what scalable medical knowledge looks like. The same pattern appears in medical tourism. The global market is growing at more than 20 percent annually. A routine appendectomy that can cost around $14,000 in the United States is available in Korea for a fraction of that price. Even after travel and accommodation, the cost advantage remains decisive. More importantly, foreign patients are increasingly seeking comprehensive internal medicine and complex care, not just cosmetic procedures. This suggests trust not only in individual doctors, but in the system itself. The industrial foundations are already shifting. Hyundai Motor Group and Kia have unveiled on-device AI chips designed for robotics. Boston Dynamics’ humanoid robot Atlas is approaching near-commercial readiness. These technologies will not replace doctors first. They will augment them — extending reach, standardizing precision tasks and reducing burnout. In such a world, the key constraint may no longer be how many doctors Korea trains, but how effectively medical knowledge is captured, encoded and deployed. Musk’s three-year prediction may be far-fetched. But his exaggeration is useful precisely because it destabilizes comfortable assumptions. Korea’s healthcare debate remains anchored in a 20th-century logic: supply versus demand, quotas versus resistance. The harder question — how medicine itself is being reorganized by AI and robotics — remains largely unasked. That is the question Korea is unusually well positioned to answer. Few countries combine world-class medical outcomes with advanced manufacturing and robotics capabilities. Fewer still have an urgent demographic and workforce challenge forcing the issue. The future of healthcare will not be decided by how loudly professions defend their boundaries, but by how intelligently societies redesign their systems. Musk’s provocation is flawed, premature and overstated. But it points, uncomfortably, toward a future that will arrive whether the debate is ready or not. And that, more than the timeline, is what Korea can no longer afford to ignore. *The author is the managing editor of AJP 2026-01-11 12:00:26

Despite equally chip-strong, South Korea overtaken by Taiwan in per capita GDP SEOUL, January 11 (AJP) Stronger economic growth and a stable currency allowed Taiwan to overtake South Korea in per capita gross domestic product last year, with the gap expected to persist this year, according to government data and economic forecasts released Sunday. South Korea’s per capita GDP in 2025 is estimated at $36,107, down 0.3 percent from the previous year, marking its first decline in three years. The drop reflects weak growth and a sharp depreciation of the won, government and central bank data showed. South Korea’s dollar-denominated nominal GDP fell 0.5 percent to $1.87 trillion, the first contraction since 2022, while real GDP growth slowed to an estimated 1.0 percent, its weakest pace since the pandemic-era contraction in 2020. The average won-dollar exchange rate rose to 1,422.16 last year, the weakest annual level on record. Taiwan, by contrast, recorded robust growth led by semiconductor exports, particularly those linked to artificial intelligence demand. Taiwan’s statistics agency estimates the island’s per capita GDP reached $38,748 in 2025, surpassing South Korea for the first time in 22 years. Taiwan’s real GDP growth estimate for 2025 was revised up sharply to 7.37 percent, while the New Taiwan dollar remained relatively stable, strengthening slightly against the U.S. dollar over the past year. According to Taiwan’s official outlook, per capita GDP is expected to exceed $40,000 this year, extending a four-year upward trend. Major global investment banks project Taiwan’s real GDP growth at around 4.0 percent in 2026 on continued strength in AI-related exports. South Korea’s per capita GDP is expected to recover modestly this year if economic growth improves to government-target of around 2 percent. Based on government projections, per capita GDP could rise to about $37,900 if exchange rates remain near last year’s levels, or to roughly $38,500 if the won strengthens to around 1,400 per dollar. South Korea first surpassed Taiwan in per capita GDP in 2003 and maintained a lead for more than two decades. The reversal highlights diverging economic trajectories, with Taiwan benefiting from its central role in the global semiconductor supply chain, led by Taiwan Semiconductor Manufacturing Co. (TSMC). The International Monetary Fund in October projected South Korea’s global ranking in per capita GDP will slip to 37th in 2025 from 34th in 2024, while Taiwan's goes up to 35th from 38th. 2026-01-11 10:19:24

OPINION: Why Korean words are likely to stay “Language is the dress of thought,” wrote Samuel Johnson, suggesting that the words a society adopts reveal what it values, often more clearly than any manifesto or statistic. If that is true, then the latest update to the Oxford English Dictionary offers an unusually revealing glimpse into the cultural mood of the moment. This year, the dictionary added several Korean-origin words, including haenyeo and ramyeon, alongside terms such as jjimjilbang, bingsu, sunbae, ajumma, Korean barbecue and officetel. The additions follow last year’s inclusion of words like dalgona, maknae and tteokbokki, marking a second consecutive expansion of Korean vocabulary in English’s most authoritative record. The Oxford English Dictionary does not chase trends. It documents language only after words have been used repeatedly, across contexts, and with enough consistency to leave a durable trace. Once entered, words are not removed, even if their popularity fades. Inclusion, therefore, signals not momentary fascination but cultural absorption. What stands out is the shift in emotional tone between last year’s additions and this year’s. In 2024, dalgona entered the dictionary on the back of the global phenomenon Squid Game. The candy, fragile and unforgiving, became a symbol of competition, survival and elimination—an object perfectly suited to a story about pressure and precarity. It captured the anxieties of an era defined by zero-sum contests and relentless performance. This year’s standout word, haenyeo, points in a different direction. The term refers to the traditional women divers of Jeju Island, whose lives have recently drawn global attention through the Netflix drama When Life Gives You Tangerines. Unlike spectacle-driven narratives, the series portrays endurance rather than victory, responsibility rather than escape. The haenyeo are not heroic in a conventional sense; they are steady, repetitive and deeply embedded in family and community. Their appearance in the English dictionary suggests a growing global attentiveness to quieter forms of dignity. The same sensibility runs through other newly added words. Ramyeon, long familiar as instant food, has taken on a broader cultural meaning through Korean storytelling. In dramas and films, it is rarely eaten alone. It appears late at night, after hardship, shared between people who may lack the words to express what they feel. In K-Pop Demon Hunters, ramyeon is not fuel for action but what comes afterward—a pause, a moment of regrouping, a sign of togetherness. Such scenes require no explanation for global audiences, because food-sharing is one of the most universal human rituals. Words like jjimjilbang tell a similar story. They describe spaces designed not for efficiency or privacy, but for rest and shared presence. A jjimjilbang is not simply a facility; it is a place where strangers lie side by side, where time slows, and where bodies and conversations are allowed to exist without urgency. The word resists translation because it names an experience rather than a function, a way of being together rather than a service rendered. Taken together, these words suggest that the global appeal of Korean content lies not only in style, technology or production value. It also lies in the moral texture of the stories being told. What travels across borders is a sensibility that values endurance over dominance, care over spectacle and shared time over solitary achievement. Dictionaries change slowly. But when they do, they leave a long shadow. The movement from dalgona to haenyeo—from games of survival to lives patiently lived—marks a subtle but meaningful shift in what resonates globally. ' As BTS prepares to return as a full group, expectations are rising not only for new music but for another wave of Korean language entering everyday global life—this time through lyrics that linger, phrases that are repeated, and emotions that are learned before they are translated. If language is indeed the dress of thought, then English today is beginning to wear words shaped by Korean experiences of food, labor, rest and song. These are not just borrowed terms. They are signals of what the world is learning to notice—and perhaps, to value. *The author is the managing editor of AJP 2026-01-07 11:53:48

Ramyeon, haenyeo among latest Korean-origin words added to Oxford English Dictionary SEOUL, January 07 (AJP) -As Korean dramas, music and food continue to spread across global streaming platforms and dining tables, the Oxford English Dictionary (OED) has added eight new Korean-origin words to its latest update, underscoring how Korean culture is becoming part of everyday English usage. The newly added entries include ramyeon, haenyeo and sunbae, along with bingsu, jjimjilbang, ajumma, Korean barbecue and officetel. The additions follow last year’s inclusion of seven Korean words such as dalgona, maknae and tteokbokki, marking the second consecutive year that Korean-related terms have expanded in the dictionary. First published in 1884, the OED is regarded as the most authoritative historical record of the English language. Now operated as a continuously updated online platform, it adds new entries only after sustained and verifiable usage in English-language sources. Once included, words are not removed, even if their frequency later declines. The dictionary said the latest additions reflect the growing presence of Korean culture in English-speaking societies, driven largely by the global popularity of Korean television series, films, music and cuisine. The inclusion of haenyeo this year reflects heightened global awareness of Korea’s traditional female divers, fueled in part by the international success of the Netflix drama "When Life Gives You Tangerines", which portrays life in mid-20th-century Jeju and prominently features the island’s haenyeo culture. The series has drawn attention not only to Jeju’s landscape but also to the lives and labor of its women divers, bringing the term into wider English-language discussion. A similar pattern was seen last year with dalgona, which entered the OED following the global phenomenon of "Squid Game". The series propelled the traditional sugar candy into worldwide recognition, with the term appearing frequently in English-language media, recipes and social platforms. Food-related terms continue to feature prominently. Ramyeon is one such example. While the Japanese term ramen was added earlier, the Korean spelling and usage have gained distinct recognition as Korean food and media reached wider international audiences. In recent years, ramyeon has appeared repeatedly in global streaming hits, where it often functions as a shared ritual rather than simply a meal. Social and relational terms were also highlighted. The addition of sunbae reflects growing familiarity with Korean expressions describing hierarchical relationships. Unlike the English word “senior,” sunbae conveys a broader mix of hierarchy, familiarity and responsibility shaped by Korean social norms. Other relational terms, including oppa and maknae, were added in previous updates. Lifestyle-related words such as jjimjilbang and bingsu were included as references to uniquely Korean experiences that are difficult to translate into existing English terms. Their usage has increased as Korean lifestyle content has circulated widely through streaming platforms, social media and travel-related media. The OED also formally added Korean barbecue as an English expression, expanding beyond individual dish names such as galbi, samgyeopsal and bulgogi, which were already listed. The dictionary cited usage dating back to a 1938 Hawaiian newspaper as part of its historical record. According to Jieun Kiaer, a professor of Korean linguistics at the University of Oxford who serves as a consultant to the dictionary, inclusion in the OED requires clear textual evidence that a word is being regularly used and discussed in English-speaking contexts. She noted that once a word enters the dictionary, it remains permanently as part of the historical record. The steady expansion of Korean-origin words in the OED reflects how Korean content and cuisine have moved beyond niche interest to become embedded in everyday language, signaling a lasting linguistic imprint of Korean culture on global English usage. 2026-01-07 11:35:06

Korean president reaffirms one-China policy ahead of summit in Beijing SEOUL, January 03 (AJP) - South Korean President Lee Jae Myung reaffirmed Seoul’s respect for the “one-China” policy on Taiwan in an interview with China Central Television ahead of his summit with Chinese President Xi Jinping, underscoring his administration’s intent to stabilize and recalibrate relations with Beijing. “The healthy development of South Korea–China relations depends on full respect for each other’s core interests,” Lee said in the interview, according to CCTV’s Chinese-language translation released on Friday. “With regard to China’s most core concern, the Taiwan issue, we will uphold our position of respecting the one-China stance.” Lee stressed that the diplomatic principles agreed upon when Seoul and Beijing established formal ties in 1992 remain valid and continue to serve as the “core guidelines” for bilateral relations. He added that maintaining peace and stability in Northeast Asia, including across the Taiwan Strait, is a shared responsibility. The remarks come as tensions have risen in the Taiwan Strait, following large-scale Chinese military drills near Taiwan earlier this week. Taiwan’s current ruling party has consistently rejected Beijing’s sovereignty claims over the self-governed island. Addressing concerns over regional alignments, Lee said South Korea’s military alliance with the United States does not imply confrontation with China. He emphasized that Seoul seeks a “new, equal and cooperative relationship” with Beijing, particularly in artificial intelligence and other advanced technology sectors. Lee also highlighted the two countries’ shared historical experience of resisting Japanese aggression during World War II, calling for greater efforts to learn from history and prevent its repetition. As part of efforts to institutionalize dialogue, the South Korean president proposed holding annual summit meetings with China’s leader, signaling a push for more regular and structured high-level engagement. Lee’s four-day state visit to China begins Sunday, with talks expected to cover regional security, economic cooperation and technology partnerships amid an increasingly complex geopolitical environment in East Asia. 2026-01-03 08:04:36

Half of Koreans expect economy to worsen in 2026, inflation tops concern: poll SEOUL, January 01 (AJP) -About half of South Koreans believe economic conditions will deteriorate in 2026, with inflation emerging as the most urgent concern, even as many remain optimistic that the stock market’s rally can extend further, a survey showed Thursday. A poll conducted by Realmeter on behalf of Energy Economy News found that 46.4 percent of respondents expect the economy next year to be “worse than now,” compared with 33.8 percent who believe conditions will improve. The pessimistic view outweighed optimism by 12.6 percentage points, beyond the margin of error. Pessimism was strongest among the young, reflecting the anxieties over job and income insecurity of the younger cohort. Respondents in their 50s were relatively upbeat, with 45.8 percent expecting improvement versus 38.8 percent anticipating deterioration. In contrast, pessimism was strongest among those aged 18–29 (56.8 percent) and those 70 or older (55.3 percent). When asked which economic issue the government should prioritize in 2026, respondents most frequently cited price stability, at 29.4 percent, reflecting continued pressure on household budgets from elevated living costs. Other priorities followed at a distance: easing corporate regulations and boosting investment (15.9 percent), strengthening export competitiveness and nurturing new industries (12.8 percent), expanding jobs and employment (12.0 percent), and reducing household debt and interest burdens (10.9 percent). Support for the self-employed and small businesses (8.3 percent) and assistance for youth and future generations (7.7 percent) ranked lower. Political orientation also played a decisive role. Among conservatives, 71.1 percent said the economy would worsen, while 59.0 percent of progressives expected improvement. Centrists were more divided, with pessimistic views (42.7 percent) narrowly exceeding optimistic ones (34.4 percent). Despite the downbeat economic outlook, views on the stock market were more balanced. When asked whether the benchmark KOSPI index could reach 5,000 points in 2026, 48.7 percent said it was possible, exceeding the 42.5 percent who said it was unlikely. By age group, optimism was highest among people in their 40s (55.1 percent), 50s (57.1 percent) and 60s (52.6 percent), while respondents aged 70 or older were the most pessimistic, with 54.4 percent doubting the possibility of a KOSPI 5,000 era. Ideological divides again surfaced, with 73.0 percent of progressives saying the index could reach 5,000, compared with 60.4 percent of conservatives who said it could not. Centrists were split, with 48.2 percent optimistic and 42.5 percent pessimistic. The survey was conducted on Dec. 29–30, 2025, among 1,025 adults aged 18 or older nationwide using automated random-digit dialing (RDD) of mobile phones. The margin of error is ±3.1 percentage points at the 95 percent confidence level. Results were weighted by gender, age and region based on October 2025 resident registration data. 2026-01-01 15:38:50

Coupang's $1.2 bn compensation plan suspected as marketing, not atonement SEOUL, December 29 (AJP) -Already in the hot seat for what many see as a dismissive attitude toward consumers and regulators, Coupang has drawn fresh public backlash in South Korea with its $1.2 billion compensation plan widely seen as marketing tactic to retain customers rather than offering genuine redress. The e-commerce giant said Monday it would distribute 1.685 trillion won worth of purchase vouchers to 33.7 million current, former and withdrawn users whose personal information was exposed in a data breach disclosed last month. The package — the largest ever announced in South Korea in response to a data-leak incident — applies to Wow paid members, regular users and even former account holders who received official notification. Under the plan, customers will receive four one-time vouchers totaling 50,000 won: 5,000 won each for Coupang and Coupang Eats, and 20,000 won each for Coupang Travel and the luxury platform Alux. The vouchers, which can be used only within Coupang’s ecosystem, will be issued starting Jan. 15. Coupang said the program reflects its determination to “take responsibility and restore customer trust.” Harold Rogers, the company’s interim Korea chief executive, said the firm “deeply reflects on the concern and inconvenience caused” and would make customer trust its top priority. Despite the scale of the package, public reaction has been largely negative, reflecting lingering distrust toward the company. "What it says sounds more like a customer-retention campaign,” one commenter wrote on a major online community. “Even the compensation makes you shop at Coupang in the end,” another widely shared comment read. One accused the company of “trying to lure back users who already left, using compensation as bait.” A closer look finds that only 10,000 won of the total compensation applies to Coupang’s most frequently used services, while the remaining 40,000 won is tied to platforms with far lower usage rates. Because the compensation takes the form of in-platform vouchers rather than cash, it also can forces users to continue spending within Coupang’s ecosystem, blurring the line between restitution and marketing. In absolute terms, the size of the compensation is striking. At 1.685 trillion won, it is more than three times larger than SK Telecom’s 500 billion won compensation package announced earlier this year following its own data breach. The amount also exceeds Coupang Inc.’s combined net profit for the first three quarters of 2025 by more than four times and is roughly 17 times its full-year profit in 2024. At the heart of the backlash is Coupang's aloofness toward public accountability. The U.S.-listed company, whose revenues are generated almost entirely in Korea, has faced repeated criticism over labor practices and governance issues, as well as founder and chairman Bom Kim’s refusal to attend National Assembly hearings. A recent survey by polling firm Realmeter underscores the depth of public dissatisfaction. According to the poll, 69.1 percent of respondents said Kim was avoiding accountability by hiding behind his U.S. citizenship. When asked about appropriate punitive measures, 32 percent supported criminal punishment for those responsible, while 29.4 percent favored business suspension. The controversy appears to be influencing consumer behavior. Some 60 percent of respondents said the scandal had already affected their use of Coupang services. Of those, 26.1 percent said they were considering deleting their accounts, 18.5 percent said they had reduced usage, and 16.1 percent said they had already stopped using the platform. Support was also strong for institutional sanctions, with 63.2 percent backing legislation that would restrict or bar entry into Korea for foreign executives who fail to appear before the National Assembly without legitimate justification. The survey was conducted on Dec. 26 among 512 adults nationwide using an automated response system, with a response rate of 4.4 percent. 2025-12-29 13:40:15

OPINION: Korea's markets in 2025: prices surged, structures quietly weakened By the end of 2025, South Korea’s financial markets offered a paradox. Prices moved sharply, yet the system did not break. Equity indices surged, bond yields rose and the won weakened — but none of this tipped into crisis. Beneath the surface, however, the numbers tell a more uneasy story: stability was preserved, but vulnerabilities quietly accumulated. The Bank of Korea’s semiannual Financial Stability Reports capture this duality well. The Financial Stress Index stood at 15.0 in November, down from 18.6 in June — safely below crisis territory. But the Financial Vulnerability Index climbed to 45.4 in the third quarter, closing in on its long-term average of 45.7. Stability improved at the margin; structural fragilities did not. Equities: a rally powered by policy and narrative The stock market’s performance was striking. The KOSPI rose from around 2,399 in early June to 4,144 by December 9, ending the year just below that level at 4,129.7. Few developed markets posted a comparable surge in such a short period. The first-half rally had clear drivers: expectations of capital-market reform, enthusiasm around artificial intelligence, and anticipation of supplementary fiscal stimulus. The second half of the year told a more complicated story. Trade tensions, policy uncertainty and profit-taking amplified volatility, while November brought renewed debate over whether AI valuations had run ahead of fundamentals. Yet prices continued to push higher. The rally was sustained less by earnings than by narrative — a familiar pattern in late-cycle markets. This distinction matters for 2026. Upside may remain, but direction will be less important than volatility. If AI earnings disappoint or valuation concerns resurface, corrections could be abrupt rather than gradual. Bonds: higher yields, but no credit stress Government bond yields rose through the year, with the three-year Korean Treasury yield ending around 3.1 percent. On its own, that would normally signal tighter financial conditions. But credit markets told a different story. Corporate bond spreads remained close to long-term averages. AA-rated spreads hovered near 55 basis points, while A-rated spreads stayed around 150 basis points. Even in November, when rising government yields and heavier bank bond issuance pushed spreads modestly wider, there was no sign of systemic strain. This resilience is central to the BOK’s assessment that the financial system remains broadly stable. Prices moved sharply; credit transmission did not fracture. Foreigners versus residents: the real story lies at home Looking only at foreign flows would give a misleading picture. In the first half of 2025, foreigners sold about $10.6 billion of Korean equities while buying roughly $25 billion in bonds. By year-end, their equity ownership ratio had actually risen to 32 percent, and their share of bond holdings to 12.1 percent. Net foreign inflows into bonds for the year reached roughly $47 billion. The more consequential shift came from Korean residents themselves. Between January and October, residents invested $117.1billion net in overseas securities — including $89.9 billion in equities and $27.2 billion in bonds. October alone recorded a record $17.3 billion outflow. This was not short-term currency speculation but a structural reallocation of portfolios. In effect, Korean households and institutions increasingly chose to place marginal savings abroad rather than at home. That shift matters more for market dynamics than foreign positioning. FX: a high plateau becomes the norm The won’s trajectory in 2025 reflects this structural change. From around 1,350 per dollar in June, it weakened into the 1,470s by October and November, reaching 1,472 on December 9. Toward year-end, verbal intervention and hedging flows helped stabilize the rate near 1,440. On annual basis, the dollar would have averaged 1,421.9 won, set for a record. The past average high for the pair was 1,394.9 won in 1998 amid IMF bailout. The central bank attributed to “large fluctuations” rather than crisis conditions, noting that external funding conditions remain sound. But the level itself is telling. The exchange rate has moved onto a higher plateau. Trade balances alone no longer anchor the won. Capital flows do — particularly outbound portfolio investment by residents. In that sense, the exchange rate in 2025 was shaped less by exports than by asset allocation. Valuation gaps and the logic of capital flight One reason behind the surge in overseas investment is the valuation gap between US and Korean equities. In 2025, the S&P 500 traded at roughly 20 times earnings, with the Nasdaq even higher. Korea’s market, by contrast, has long hovered in the high single digits to low teens. This is not simply a question of “cheap versus expensive”. It reflects expectations of earnings durability. The U.S. markets are anchored by AI, platform businesses and intellectual-property-intensive sectors, supported by shareholder-friendly governance and deep capital markets. Korea, by contrast, still carries a structural discount tied to earnings volatility, governance concerns and policy uncertainty. As a result, new investment increasingly bypasses the domestic market altogether. Rather than selling Korean shares to buy US ones, investors often send fresh capital abroad from the outset. The Bank of Korea itself notes that resident overseas investment is increasingly long-term and strategic in nature. Household credit: mortgages cool, other loans reawaken Household debt dynamics underline the same shift. Mortgage growth slowed markedly in 2025. Outstanding housing loans reached 1,159.6 trillion won by the third quarter, up 4.3 percent year on year — a deceleration from earlier periods. But other forms of credit told a different story. “Other loans” rose to 685.4 trillion won, turning positive year on year for the first time in some time. Monthly increases reached 4.9 trillion won in October and 4.1 trillion won in November. The central bank explicitly links this rebound to demand for equity investment. In other words, leverage did not disappear; it changed channels. As mortgage lending was restrained, borrowing increasingly supported financial investment — including overseas exposure — with implications for both asset prices and the exchange rate. The policy challenge for 2026: structure, not rates The lesson of 2025 is not primarily about whether interest rates should fall or stay put. Marke data point to a deeper issue. Financial stress is contained, but vulnerabilities are rebuilding. The FVI stands at 45.4. Housing prices in Seoul are accelerating again. Non-mortgage lending is reviving. Overseas investment continues to surge. These are not crisis signals — but they are early warnings. The success or failure of policy in 2026 will hinge less on the direction of rates than on whether imbalances are allowed to compound. Three questions matter most: Can authorities contain renewed overheating in Seoul’s housing market? Can leverage flowing into equities and derivatives be monitored without choking markets? Can surging overseas investment be absorbed without destabilizing the exchange rate? 2025 was a year of prices. 2026 will be a test of structure. * The author is the managing editor of AJP. 2025-12-28 16:19:27