Journalist
Joonha Yoo and Ryu Yuna
joonhayoo94@ajupress.com
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Stocks at record highs, growth at 1%: Korea's market–economy divide widens SEOUL, January 22 (AJP) -Korean stock market pushed deeper into uncharted territory Thursday, with the KOSPI briefly climbing over the 5,000 mark before closing just below the milestone, a historic high unfolding even as economic growth remains stuck near 1 percent, highlighting a widening gap between buoyant asset prices and a fragile real economy. The growth outlook marks the weakest performance since the economy contracted 0.7 percent in 2020 during the height of the COVID-19 pandemic, and the lowest growth rate on record outside the pandemic period since GDP data collection began in 1954. The benchmark KOSPI rose 0.9 percent to finish at 4,952.5 after hitting a historic high of 5,019.54, extending its rally and reinforcing views that the market is entering a higher valuation regime. The KOSPI 200 gained 1.03 percent to 722.3, reflecting renewed demand for heavyweight stocks, even as trading showed clear signs of sector rotation rather than broad-based risk-taking. On the main board, foreign investors and institutions were major sellers, offloading 297.2 billion won ($202 million) and 102.8 billion won, respectively, while retail investors bought in 155.6 billion won. Investors increasingly view the advance toward — and brief move above — 5,000 as more than a liquidity-driven rally. Expectations of improved corporate governance following revisions to commercial law, a recovery in the semiconductor cycle and ample liquidity have helped lift the market’s valuation range. Hopes that long-standing governance concerns could be addressed have also fueled expectations of a narrowing “Korea discount,” drawing sustained interest toward large-cap stocks. Gains were led by technology and electronics shares. Samsung SDI surged 18.7 percent to 384,500 won, lifting the broader electrical equipment sector by 8.4 percent. Semiconductor heavyweights also advanced, with Samsung Electronics rising 1.9 percent to 152,300 won and SK hynix gaining 2.03 percent to 755,000 won. Internet stocks outperformed as well, with NAVER up 2.9 percent at 245,500 won. Not all sectors participated. Automakers and heavy industry shares lagged, with Hyundai Motor falling 3.6 percent to 529,000 won. Energy and shipbuilding names also weakened, as Doosan Enerbility slipped 1.42 percent to 90,000 won and Hanwha Ocean dropped 2.7 percent to 137,700 won. In the secondary market, the KOSDAQ outperformed. The index climbed 2.0 percent to 970.4, supported by individual and selective foreign buying. Foreign investors purchased a net 66.1 billion won worth of shares, while institutions sold 138.6 billion won and retail investors added 104.6 billion won, underscoring continued appetite for growth-oriented names despite elevated volatility. Currency exchange rate and bonds sent mixed signals. The won weakened slightly, with the dollar closing at 1,469.6 won, up 1.9 won, or 0.13 percent. Government bond yields edged lower, with the 10-year yield around 3.06 percent and the 3-year at about 2.98 percent, reflecting lingering expectations for future rate cuts alongside a cautious growth outlook. Elsewhere in Asia, Japan’s Nikkei 225 climbed 1.73 percent after U.S. President Donald Trump said Washington would not proceed with additional tariffs linked to Greenland-related trade disputes, easing risk aversion. 2026-01-22 17:46:33 -
In wintry Korea, grandma's vest turn practical warmth into style SEOUL, January 22 (AJP) — What was once dismissed as a purely functional item worn by Korean grandmothers has quietly become a global fashion statement. “Grandmacore” — a trend rooted in nostalgia, domestic hobbies like knitting and baking, and unapologetically cozy silhouettes — has caught on with fashion-forward MZ women worldwide. At the center of this movement is an unlikely hero: the flowery, quilted vest South Korean grandmas wear to stay warm. Popularly known as the “gimjang vest,” the colorful padded body warmer has long been a staple in rural Korea. Villagers traditionally wear it during the annual kimchi-making season or for outdoor chores, valuing warmth and mobility over style. Thick quilting, lightweight fabric and a loose, sleeveless fit allow for easy movement while keeping the torso insulated — practical workwear, plain and simple. Even the name reflects its roots. Closely associated with gimjang, the labor-intensive winter ritual of making kimchi, the vest was never meant to be fashionable. It existed purely to keep the cold out. That perception has flipped. The old-fashioned “granny look” has found new life among MZ consumers, especially as group outfits for parties and highly shareable social-media posts. Young celebrities helped accelerate the shift. Viral photos of K-pop stars such as Karina, Jennie and Taeyeon wearing gimjang vests reframed the garment from rural necessity to playful, ironic chic. As the trend spread, the vest also became a must-buy souvenir for foreign visitors. “This is what Jennie wore!” exclaimed a tourist from Singapore at Seoul’s Namdaemun Market. “We’ve seen it everywhere on Instagram Reels and TikTok.” Similar reactions have surfaced across social media platforms. “I love that these are becoming popular with younger people — it’s funny but cute,” one user wrote. “I don’t think I could wear one though.” Another post read, “They were everywhere and so affordable. I bought one for my daughter and she’s so cute in it! We got ours at Namdaemun — it was 6.50 per vest.” The fashion evolution has been swift. As the garment moved from traditional marketplaces into the mainstream fashion scene, designs expanded beyond floral prints to include check patterns, reversible styles, minimalist quilting and fleece-lined versions. Pet-size gimjang vests have also entered the market, enabling coordinated looks for owners and their dogs. Major sportswear brands have taken note. Adidas, for instance, incorporated floral elements into youth-targeted product lines, with one quilted jacket priced at 150,000 won selling out shortly after release. Search data confirms the momentum. According to Naver Data Lab, searches for “gimjang vest” reached a relative index of 100 — the platform’s highest score — on Nov. 26, 2025, surpassing last winter’s peak. Analysts point out that the surge coincided with a sharp drop in temperatures, underscoring the garment’s enduring practicality. The aesthetic has also found its way into lifestyle spaces. At Café Inju, a hanok-style bakery in South Chungcheong Province, owner Yoo Eun-duk places gimjang vests on display for visitors to wear while taking photos. “The concept fits the bakery’s retro, grandmother-inspired vibe,” Yoo said. “We weren’t chasing trends. We were looking for props that matched the nostalgic atmosphere, and the gimjang vest felt like a natural choice.” The photo zone near the entrance draws interest across age groups, including visitors who do not try on the vest but linger to engage with the surrounding objects. The blend of function and charm has even caught the attention of luxury fashion houses. Valentino released the “Gobelin Après L’Hiver Fiorellini Vest” in 2026, priced at about 6.3 million won, featuring shearling details, floral motifs and branded lining. Moncler has also introduced a reversible floral down vest. What was once winter workwear born of necessity is now being reinterpreted through premium materials and high fashion design. For some, the vest is simply a way to stay warm. For others, it is playful self-expression. Either way, the trend offers a gentle reminder: sometimes the most fashionable thing to do is finally visit your grandmother — and take a closer look inside her closet. 2026-01-22 16:41:58 -
Koreanness, the answer BTS found for its return SEOUL, January 21 (AJP) - As BTS prepares to return as a full group after nearly four years, the question surrounding the comeback has never really been whether it would make an impact, but how the group would choose to reappear. The answer, it seems, is rooted in something familiar — and distinctly Korean. BTS will release its fifth full-length album, “ARIRANG,” on March 20, marking its first full reunion in three years and nine months. Around the album, a series of details has drawn attention for pointing in the same direction: a return framed by Korean sentiment, symbols and space. The group is also reportedly planning a three-day performance at the Gwanghwamun Square from March 20 to 22 to coincide with the album’s release, though details have yet to be officially confirmed. Gwanghwamun Square occupies a central position in Seoul’s historical axis, linking the modern city to Gyeongbokgung Palace, the main royal palace of the Joseon dynasty, and extending symbolically toward Sungnyemun Gate, the former southern gateway to the capital. The square is home to statues of King Sejong the Great, creator of the Korean alphabet, and Admiral Yi Sun-sin, a national hero revered for his leadership in times of crisis. Together, these landmarks and figures anchor Gwanghwamun as a space where Korea’s political history, cultural identity and civic life converge — a place shaped by continuity, disruption and restoration across centuries. According to South Korea’s Cultural Heritage Administration, BTS’s agency HYBE has received conditional approval to use Gyeongbokgung Palace and Sungnyemun Gate for filming. While no official confirmation has been made about whether filming will actually take place — or in what form — the possibility alone has sparked interest. These are not the kinds of locations typically associated with pop productions. Gyeongbokgung Palace, built in 1395, was the main royal palace of the Joseon dynasty, while Sungnyemun Gate, long known internationally as Namdaemun, once marked the southern entrance to the capital. Both sites are deeply woven into Korea’s historical landscape, carrying layers of memory shaped by destruction, restoration and daily coexistence with modern city life. The album title adds another layer. “Arirang” is one of Korea’s most widely recognized folk songs, passed down through generations in countless regional versions. With no single composer or definitive form, the song has endured precisely because it has remained open — absorbing different emotions and meanings over time. In a statement, HYBE described ARIRANG as an album that reflects BTS’s identity and the emotions they wish to share with fans, noting themes of longing and deep connection. The agency said the group naturally turned toward its roots as it prepared for its return. Taken together, the choices surrounding the comeback suggest a mood that feels less about spectacle and more about grounding. Rather than chasing something new or unfamiliar, BTS appears to be leaning into symbols that already carry shared meaning — places and melodies that resonate without explanation. For a group that has spent much of the past decade operating on a global stage, the emphasis on Koreanness stands out not as a retreat, but as a point of reference. Gyeongbokgung, Sungnyemun and Arirang are not owned by any single era or creator. Their meanings have been shaped collectively, through repetition and memory, and continue to evolve. As anticipation builds ahead of the album’s release, details about promotional plans remain limited. HYBE has not confirmed how the heritage sites might be used, nor what visual concepts will accompany the album. What is becoming clear, however, is the tone BTS has chosen for its return. In a moment when expectations are high and attention is intense, the group appears to have found its answer not in scale or novelty, but in something closer to home — the familiar pull of Korean roots. 2026-01-21 17:48:13 -
KOSPI recovers early losses, buoyed by surge in foreign buying SEOUL, January 21 (AJP) - South Korean stocks reversed early losses Wednesday morning, buoyed by strong foreign buying and a sharp rebound in the won, even as global markets remained cautious amid lingering trade uncertainty from U.S. President Donald Trump's tariff pressures. As of 10:40 a.m., just a few hours into the day's trading, the benchmark KOSPI was up 0.43 percent at 4,907.1, rebounding from an earlier 0.6 percent decline. The KOSPI 200 rose 0.9 percent to 715.3, signaling renewed demand for large-cap stocks, while the tech-heavy KOSDAQ fell 2.5 percent to 952.6, showing a widening divergence between blue chips and growth-oriented shares. Foreign investors drove the turnaround with net purchases of 435.6 billion won ($320 million) on the KOSPI, joined by institutions at 71.5 billion won. But retail investors sold 570.6 billion won. On the junior KOSDAQ, foreigners and institutions sold while individuals bought. The won's sharp recovery shaped market sentiment. Strengthening to 1,472.8 per dollar, a gain of 7 won, or 0.5 percent, the currency eased pressure and helped stabilize the day's volatile start. Investor confidence was further bolstered by remarks from President Lee Jae Myung, who said he would seek to ease concerns over foreign-exchange volatility. "If there were extraordinary measures needed to stabilize the currency, they would already be in place," Lee said during a press conference earlier in the day. He also said he believes the won's exchange rate against the greenback could return to the 1,400-won range within one to two months. Auto-related stocks led the early rebound, benefiting from both currency moves and heavy foreign inflows. Hyundai Motor surged 10.2 percent to 528,000 won and Kia jumped 4.7 percent to 171,600 won. Chip stocks remained strong, with Samsung Electronics climbing 3 percent to 149,600 won and SK hynix rising 0.9 percent to 751,000 won, supported by optimism over artificial intelligence-driven demand. But not all sectors joined the rally. Energy and infrastructure shares lagged, with Doosan Enerbility falling 3.2 percent to 92,200 won on profit-taking. Portals also underperformed, as NAVER slipped 1.6 percent to 240,000 won. Elsewhere in Asia, sentiment remained cautious. Japan's Nikkei 225 fell 0.4 percent to 52,785.8, as optimism over an impending snap election and tax relief proposals was overshadowed by U.S. trade concerns. 2026-01-21 11:46:05 -
KOSPI catches its breath after two-week rally SEOUL, January 20 (AJP) - South Korea's benchmark KOSPI pulled back on Tuesday, ending its year-opening rally, as selling pressure in major technology and auto shares outweighed gains in select growth and thematic stocks. The index fell 0.4 percent to close at 4,885.8, snapping a 13-session winning streak that included a series of record highs. Despite the pullback, it briefly climbed to an intraday high of 4,935.48, extending its run of fresh peaks before momentum faded in later trading. The KOSPI 200 dropped 0.8 percent to 708.5, reflecting pronounced weakness among large-cap constituents. By contrast, the tech-heavy KOSDAQ outperformed, rising 0.8 percent to 976.4, near the 980 level and its highest point in four years, highlighting the growing divergence between the main board and smaller, theme-driven stocks. On the KOSPI, institutional investors were heavy sellers, offloading a net 606.1 billion won ($410 million), more than offsetting net purchases by individuals of 352.5 billion Korean won and foreign investors' buying of 79.3 billion won. Foreign investors extended their buying streak to a fourth consecutive session, while retail investors ended a six-day run of net selling that had persisted since Jan. 12. On the KOSDAQ, institutional investors dominated buying with net purchases of 284.4 billion won, while retail investors offloaded 260.4 billion won. Foreign participation remained subdued, with only a marginal net inflow of 1.8 billion won. Semiconductor giants pulled the index lower as profit-taking intensified amid ongoing concerns about global trade tensions and potential U.S. tariffs. Samsung Electronics slid 2.75 percent to 145,200 won, while SK hynix dropped 2.8 percent to 743,000 won, both underperforming after sharp rallies earlier this month. Hyundai Motor fell 3.02 percent to 479,000 won, adding to the index's losses. Trading was more mixed for other stocks, with Naver rising 2.5 percent to 244,000 won, defying the broader decline. Robotics-related shares remained in focus, with Doosan Robotics surging 9.7 percent to 118,100 won. Samsung SDI gained 3.8 percent to 326,000 won, leading advances among battery-related stocks. Thematic trading continued beneath the surface. Shares linked to nuclear power plant decommissioning surged 8.4 percent, while the aerospace sector climbed 7.8 percent, reflecting sustained investor appetite for policy- and technology-driven growth areas even as blue-chip stocks cooled. The Korean won weakened to 1,479 per dollar, down 4.5 won from the previous session, tracking broader dollar strength. Across Asia, sentiment was subdued. Japan's Nikkei 225 fell 1.1 percent to 52,991.1 as fiscal concerns and rising bond yields weighed on technology shares, while China's Shanghai Composite edged down 0.009 percent to 4,113.7. 2026-01-20 17:56:29 -
South Korean stocks extend rally to 12th session on robotics surge SEOUL, January 19 (AJP) - South Korean stocks extended their rally to a 12th consecutive session on Monday, driven by strong gains in robotics-related shares. The benchmark KOSPI rose 1.32 percent to close at 4,904.7, marking another record high after maintaining gains throughout the session. The tech-heavy KOSDAQ advanced 1.4 percent to 968.4, while the KOSPI 200 climbed 1.3 percent to 713.96. Foreign investors led the advance. In the KOSPI market, foreigners posted net purchases of 551.3 billion won, while retail investors and institutions were net sellers of 751.1 billion won and 23.8 billion won, respectively. On the KOSDAQ, foreign investors bought a net 202.6 billion won, while individuals and institutions sold 137.5 billion won and 29.6 billion won. Robotics stocks were at the center of the rally. Doosan Robotics surged 19.14 percent to 107,700 won. Shares of Hyundai Motor Group also jumped on growing optimism over its robotics strategy, particularly its humanoid robot Atlas. Hyundai Motor soared 16.2 percent to 480,000 won, while Kia gained 12.2 percent to 169,600 won. The strength in robotics shares reflected a broader thematic rotation in the market. With renewed tariff pressure on semiconductors in the United States, investors have increasingly turned to sectors seen as less directly exposed to trade frictions, including robotics, automation and next-generation mobility. Expectations are also building that investment momentum is shifting from generative artificial intelligence toward practical industrial and manufacturing applications. By contrast, former market leaders showed more subdued performance. Naver fell 3.1 percent to 238,000 won, while Samsung Electronics edged up 0.3 percent to 149,300 won. In currency markets, the won strengthened slightly against the dollar to close at 1,474 won. Elsewhere in Asia, markets were mixed. Japan’s Nikkei 225 slipped 0.7 percent to 53,583.6, while China’s Shanghai Composite rose 0.3 percent to 4,114. 2026-01-19 17:50:42 -
Hot Stock: Robotics emerge as retail favorite as U.S. tariff risks weigh on chip heavyweights SEOUL, January 19 (AJP) - Shares of robotics and automation companies surged Monday as investor funds rotated out of semiconductor stocks and into so-called “physical AI” plays, amid renewed uncertainty over U.S. semiconductor trade policy. Hyundai Motor jumped 12.5 percent to 465,000 won ($315.3), while Doosan Robotics soared 20.13 percent to 108,600 won, sharply outperforming the broader market as sentiment toward chipmakers weakened on tariff concerns. The shift followed a fresh warning shot from Washington. U.S. President Donald Trump signed a proclamation imposing a 25 percent tariff on certain AI semiconductor products manufactured by Taiwan Semiconductor Manufacturing Co. and imported into the United States before being re-exported to third countries. The White House also signaled the possibility of broader, second-phase tariffs on semiconductors and derivative products as part of its push to expand domestic manufacturing. Against this backdrop, investors moved into sectors viewed as less directly exposed to trade frictions, including robotics, automation and next-generation mobility. Hyundai Motor’s rally briefly lifted the automaker past LG Energy Solution to become the third-largest company by market capitalization on the Korea Exchange. As of 10:50 a.m., the stock had touched an intraday high of 466,000 won, marking a fresh 52-week high and pushing its market cap above 94 trillion won. Robot-related shares posted broad gains. Doosan Robotics led the advance. On the KOSDQ, Hurim Robotics jumped 23.26 percent, Hyundai Movex rose 13.45 percent and Yuil Robotics gained 9.88 percent. Market participants attributed the rally to growing expectations that robotics could emerge as the next market-leading theme, filling the vacuum left by semiconductors, which had driven the market’s recent advance before stalling on renewed trade uncertainty. Although U.S. memory chipmaker Micron Technology hit a record high last week on news of insider buying, investor sentiment toward Korean chipmakers deteriorated after Washington renewed pressure on companies that do not expand manufacturing investment in the United States, including the possibility of punitive tariffs. Hyundai Motor Group drew particular attention after Boston Dynamics’ humanoid robot Atlas, a core asset in the group’s robotics portfolio, received a major robotics award at CES earlier this month, raising confidence in robotics-led future mobility. The company has outlined plans to deploy Atlas robots at its Metaplant America facility in Georgia from 2028 and scale production to 30,000 units annually by 2030. “The focus of AI has shifted dramatically in just one year,” said Lee Seung-hoon, head of research at IBK Investment & Securities. “Comparing CES 2025 and CES 2026, AI has moved from generative technologies that answer questions to physical AI that sets goals, executes tasks and interacts with the real world. Hyundai Motor Group’s Atlas went beyond demonstrations, presenting a roadmap for mass production and real-world deployment in manufacturing, logistics and services.” Doosan Robotics’ sharp rise came without company-specific disclosures, underscoring that gains were driven largely by theme-based rotation rather than near-term earnings factors. The company specializes in collaborative robots for industrial and commercial use and is seen as a direct beneficiary of rising automation demand in North America and Europe. Market observers noted that the reshuffling of market-cap rankings reflects a broader transition in leadership themes. In 2021, NAVER occupied the No. 3 spot during the pandemic-driven digital boom. In 2022, LG Energy Solution surged on electric-vehicle battery demand, while SK hynix later reclaimed the No. 2 position on high-bandwidth memory optimism. 2026-01-19 12:11:55 -
KOSPI stretches rally to 11 sessions, with gains now eclipsing past cycles SEOUL, January 16 (AJP) - South Korean stocks extended their historic advance on Friday, pushing the KOSPI up for an 11th consecutive session and underscoring a rally that has grown not only longer, but materially stronger than previous market upswings. The benchmark index rose 0.9 percent to close at 4,840.7, marking a 13.8 percent gain since Jan.2 as the market continued to notch new highs with near-daily regularity entering the new year. The KOSDAQ added 0.4 percent to 954.6, while the KOSPI 200 climbed 1.2 percent to 794.6. While the current run has yet to surpass the longest streak on record — 13 consecutive gains between Sept. 4 and 24, 2019 — the scale of the advance has already far exceeded it. The 2019 rally delivered a cumulative rise of about 6.9 percent, roughly half the magnitude of the present move, highlighting the unusually strong momentum underpinning this cycle. Liquidity indicators suggest the rally is not yet being driven by aggressive leverage. Customer deposits, a proxy for idle equity capital, stood at approximately 893 trillion won ($607.5 billion) in mid-January, up more than 8 trillion won since the start of the year. The continued buildup, even as prices rise, has been interpreted as evidence that additional buying capacity remains on the sidelines. At the same time, margin trading balances have increased only gradually, hovering near 283 trillion won, while equity fund assets expanded to roughly 2,240 trillion won. The pattern suggests that inflows are broadening into medium-term investment allocations, rather than being concentrated in short-term speculative trades. The dollar was held steadily around 1,471 won. Despite the elevated level, intraday volatility was limited, easing immediate concerns about disorderly capital outflows. Sector-wise, non-ferrous metal stocks led gains, driven by expectations that U.S. investment in mineral refining could accelerate supply-chain restructuring and elevate the strategic importance of the sector. Korea Zinc jumped 10.2 percent to 1,585,000 won after reports that the company is considering building a large-scale smelting facility in Tennessee, potentially with U.S. policy backing. Market participants noted that such a move could strengthen the company’s long-term position in graphite, zinc and rare-metal supply. Among individual names, NamSun Aluminum Preferred surged 30 percent to 18,210 won. Large-cap stocks posted mixed results. Samsung Electronics rose 3.6 percent to 148,900 won after hitting an intraday record, while SK hynix added 1.0 percent to 756,000 won. Doosan Enerbility advanced 6.5 percent to 95,300 won, while Hyundai Motor slipped 2.0 percent to 414,000 won. Elsewhere in the region, sentiment was more subdued. Japan’s Nikkei 225 fell 0.3 percent to 53,936.2, while China’s Shanghai Composite edged down 0.3 percent to 4,101.9. 2026-01-16 17:47:28 -
Seoul market hits new high despite rate pause as regional peers falter SEOUL, January 15 (AJP) - Korean stocks surged to fresh highs on Thursday, extending a 10-session winning streak, even as most other Asian markets finished mixed amid cautious regional sentiment. In Seoul, the benchmark KOSPI jumped 1.58 percent to close at 4,797.6, edging closer to the symbolic 5,000-point mark. The tech-heavy KOSDAQ gained 1.0 percent to 951.2. The rally was led by heavyweight technology and auto shares. Samsung Electronics climbed 2.6 percent to 143,900 won, closing at a new record high, while SK hynix rose 1.0 percent to 749,000 won, providing solid support to the broader market. Hyundai Motor advanced 2.6 percent to 422,000 won, extending its recent upward momentum. The advance came despite a hawkish undertone from monetary authorities. The Bank of Korea unanimously voted to keep its benchmark interest rate unchanged at its first policy meeting of the year, extending a pause in place since May last year and signaling an effective end to the latest easing cycle. The Korean won weakened, with the dollar rising 4.1 won to 1,470.6. Chipmakers benefited from renewed optimism over the global semiconductor cycle after Taiwan Semiconductor Manufacturing Co. reported record-breaking fourth-quarter results, offsetting concerns sparked by overnight weakness in U.S. technology stocks. Industrial, robotics and defense-related shares also outperformed on stock-specific catalysts. POSCO DX surged 29.9 percent to 38,650 won after POSCO Group announced plans to expand industrial robot deployment at manufacturing sites in cooperation with Japan’s Yaskawa Electric. Hanwha Systems jumped 9.4 percent to 96,500 won, while Korea Zinc rose 11.5 percent to 1,438,000 won after the company said Chairman Choi Yoon-bum will attend the World Economic Forum in Davos to discuss global critical-minerals supply chains. By contrast, internet heavyweight Naver slid 4.6 percent to 247,500 won after its affiliate Naver Cloud failed to pass the first round of screening to select South Korea’s indigenous artificial intelligence model. Elsewhere in Asia, Japan’s Nikkei 225 slipped 0.4 percent to 54,110.5 as investors locked in profits following recent gains. China’s Shanghai Composite edged down 0.3 percent to 4,112.6, while Hong Kong’s Hang Seng Index fell 0.2 percent to 26,950.5. 2026-01-15 17:58:18 -
As China exports its surplus, Korea, Germany and Japan pay the industrial price SEOUL, January 15 (AJP) -China logged a record $1.19 trillion trade surplus in 2025, underscoring the resilience of its export engine despite renewed U.S. tariff pressure — and sharpening competitive strain on other manufacturing economies from South Korea to Germany and Japan. According to China’s General Administration of Customs, the surplus expanded by roughly 20 percent from 2024, even as exports to the United States fell by about 20 percent following tougher tariffs, indicating that the gains came largely from other markets. Overall dollar-denominated exports still rose 5.5 percent year on year, accelerating toward the end of the year as shipments were redirected abroad. Export growth picked up to 6.6 percent in December, from 5.9 percent in November, while imports rose 5.7 percent, signaling that global demand for Chinese goods remained firm despite uneven domestic conditions. Pivot away from the U.S. — and into third markets China’s record surplus was sustained by a sharp geographical pivot. Exports to Southeast Asia rose 13 percent, shipments to the European Union climbed 8.4 percent, and exports to Africa surged 26 percent, as manufacturers redirected supply chains toward faster-growing regions. Persistent producer-price deflation at home, combined with strong demand tied to artificial-intelligence investment, has kept Chinese goods highly competitive on price — intensifying head-to-head competition in third markets rather than expanding overall demand. Korea: solid exports, but losing relative ground For South Korea, where exports account for roughly 37 percent of GDP, China’s expanding footprint is reshaping competitive dynamics rather than collapsing trade outright. Korea’s exports rose 3.8 percent in 2025 to a record $709.7 billion, surpassing the $700 billion mark for the first time and delivering a $78 billion trade surplus, according to the Ministry of Trade, Industry and Energy. Semiconductor shipments surged 22.2 percent, driven by AI-related demand, while automobiles and shipbuilding also posted record values. Yet in relative terms, Korea is losing ground. While China’s exports grew more than twice as fast, Korea’s export growth remained modest, pushing the country down to eighth in global export rankings, from sixth a year earlier. Korean firms face narrowing margins in semiconductors, batteries, steel and industrial machinery, as price-based competition with Chinese suppliers intensifies across ASEAN, India and the Middle East. “China’s expanding export footprint is reshaping competitive dynamics in third markets, where Korean and Chinese firms increasingly overlap,” said Heo Seul-bi, an analyst at the Korea International Trade Association. “As Chinese shipments shift toward ASEAN, India and Africa amid higher U.S. tariffs, head-to-head competition has become more pronounced, particularly in price-sensitive sectors such as steel and basic industrial materials.” Germany: widening imbalance at Europe’s industrial core The pressure is even more visible in Germany, Europe’s manufacturing anchor. In September 2025, Germany exported €6.77 billion ($7.4 billion) to China while importing €15.8 billion, resulting in a monthly trade deficit of €9.06 billion. Compared with a year earlier, German exports to China edged down 1.3 percent, while imports surged 8.68 percent, highlighting the accelerating asymmetry in bilateral trade flows. Rising imports of Chinese machinery, automobiles and data-processing equipment have weighed on factory orders and industrial output, which remain below pre-pandemic levels. Japan: shifting balance inside the supply chain Japan faces a different, but equally revealing, adjustment. In October 2025, China exported $13.0 billion to Japan while importing $14.4 billion, leaving China with a $1.35 billion bilateral trade deficit. China’s exports to Japan fell 5.7 percent year on year, driven by steep declines in shipments of telephones, railway cargo containers and ships. At the same time, imports from Japan jumped 5.9 percent, led by a more than 70 percent surge in integrated circuits, alongside automobiles and industrial materials such as scrap copper. The data point to Japan’s continued strength in high-end components, but also underline its growing exposure to competition from China in finished manufacturing goods. China’s surplus reflects domestic imbalance — exported abroad Economists warn that China’s surplus is not merely a sign of export strength, but also of domestic imbalance. Heavy investment in machinery and equipment — increasingly led by state-owned enterprises — has expanded production capacity, while household consumption has lagged amid weak confidence, falling property values and precautionary saving. With deflationary pressures at home, surplus output has flowed abroad. U.S. tariffs have diverted, rather than stopped, Chinese exports — shifting adjustment costs onto other economies. “Unlike the U.S., which continues to absorb imports amid strong growth, many advanced economies are struggling,” one trade economist said. “Chinese exports are landing in markets where manufacturers are already under strain.” Fragmentation risks grow Governments are beginning to respond. French President Emmanuel Macron has raised trade imbalances directly with Beijing, while European Commission President Ursula von der Leyen has warned that Europe risks becoming a dumping ground for Chinese goods. Mexico has raised tariffs on Chinese imports, and other countries are weighing similar measures. China continues to frame itself as a defender of free trade. But analysts argue that relying on the rest of the world to absorb domestic imbalances risks accelerating trade fragmentation, especially as geopolitical blocs harden. For South Korea, Germany and Japan, the challenge is not a collapse in exports, but relative erosion — competing against a China that is exporting its surplus, its deflation and its industrial overcapacity into the same global markets. 2026-01-15 17:26:30