[[South Korea-Japan Ties]] Seoul should forge strategic industrial alliance with Tokyo, KOTRA chief urges Editor's Note: Aju Business Daily is publishing a special series to mark the 60th anniversary of the normalization of diplomatic ties between South Korea and Japan. The series reflects on the renewed relationship between the two neighbors. SEOUL, October 1 (AJP) - "If South Korea becomes a reliable partner in Japan's major manufacturing projects including semiconductors, hydrogen, ammonia, secondary batteries, and shipbuilding, the country's competitiveness in advanced industry competitiveness can make a quantum leap," said Park Yong-min, head of the Korea Trade-Investment Promotion Agency (KOTRA)'s office in Tokyo. In an interview with Aju Business Daily on Sept. 16, he vowed, "KOTRA will be at the forefront of securing a competitive edge in exports." Park said that Japan increasingly recognizes the need to partner with South Korea amid the U.S.-China rivalry and its own focus on nurturing advanced industries. Reflecting on his career, Park said, "When I first started working in Japan about 30 years ago, there was skepticism about South Korea's technology and corporate resilience. Now, Japanese companies are actively seeking partnerships with South Korean firms." Since joining KOTRA in 1995, Park has worked in Japan, Canada, China, and the U.S.' Silicon Valley, supporting South Korean companies' global expansion. He now works in Japan, overseeing four trade offices while formulating strategies for South Korean firms seeking to expand into the Japanese market. Park explained that while the two neighbors were once competitors, they now complement each other, with South Korea focusing on manufacturing and Japan on materials and equipment. "For advanced industries to remain competitive, core technology, manufacturing, and component design must work seamlessly together, making the two countries ideal partners," he said. Japan serves as a perfect testbed for South Korean startups, offering a market 2.5 times larger than South Korea's, with geographic proximity and similar political and cultural backgrounds. Comparing Japan to Silicon Valley, he said, "While Silicon Valley teaches success, Japan is where business ideas can be turned into revenue." He highlighted promising sectors like artificial intelligence (AI), digital transformation, healthcare, and pet industries, where South Korean startups can address Japan's social issues like low birthrates and aging populations. Park cited Caplix, which launched an unmanned rental car solution in Okinawa in 2022, as an example. Caplix's facial recognition kiosks allow rental processes to be handled automatically, tackling labor shortages in Japan's aging society. Since Japan's Digital Agency was established in 2018, local governments have allocated significant budgets for digital transformation projects to address issues like automation, low birthrates, and aging populations. "KOTRA has supported South Korean startups and exporters by connecting them with local importers and helping them adapt to Japan's policy changes and relevant regulations," Park said. He emphasized that South Korea and Japan can form an effective value chain in advanced industries such as semiconductors, automobiles, batteries, and hydrogen, helping mitigate supply chain risks amid U.S.-China tensions and tariff disputes. "We are looking at sectors where South Korea and Japan can create a synergy through collaborative projects," he added. Park urged South Korean exporters to be proactive, stressing that many fail despite having high-quality products with competitive prices, due to a lack of understanding of Japan's customs procedures and distribution networks. "Without patience for lengthy administrative processes and bold local hiring and investment, success is difficult," he advised. "Now is the time to strengthen partnership as both South Korea and Japan seek new frameworks for cooperation," said Park, wrapping up the interview. "Within the broader framework of building a supply chain between the two countries, KOTRA is developing long-term projects such as expanding collaboration in research and development and forming joint ventures." * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-10-01 09:44:02

MBK Partners weighs exit from Korea Zinc SEOUL, October 01 (AJP) - Facing mounting scrutiny from lawmakers and civic groups, MBK Partners is considering selling its stake in Korea Zinc, a move that could alter control of one of the world’s leading producers of nonferrous metals. A person briefed on the matter said on condition of anonymity that MBK is “reviewing its control over Korea Zinc, with an exit strategy as one option.” The stake could be transferred to Young Poong, the company’s largest shareholder, or potentially to another buyer. The review comes as MBK grapples with crises elsewhere in its portfolio. The private equity firm has faced backlash over a restructuring at Homeplus, one of South Korea’s largest retailers, and a data breach at Lotte Card. In response, it has issued a rare public apology and pledged $500 million to shore up shareholder confidence. Kim Byung-ju, MBK’s chairman and one of Asia’s most prominent private equity investors, has also been summoned by the National Assembly’s Political Affairs Committee to testify about the Homeplus case. His appearance is expected to intensify political pressure at a moment when lawmakers are seeking tighter oversight of private equity ownership in domestic companies. Industry insiders say MBK is eager to avoid a protracted dispute at Korea Zinc, which could draw further political and public scrutiny. But an exit may prove difficult: the firm is bound by a management cooperation agreement with Young Poong that carries penalty clauses for early withdrawal. Young Poong has signaled its intent to assert greater influence. “Korea Zinc does not belong to its management agent, Choi Yoon-beom,” the company said in a statement. “As the largest shareholder, we will ensure fair management.” Analysts note that MBK’s decision will serve as a test case for the balance of power between global private equity and domestic corporate governance in South Korea, where political headwinds are increasingly shaping boardroom outcomes. * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-10-01 08:56:03

TRAVEL: A trip to Banguris Homestay, an authentic Malaysian experience to the core KUALA LUMPUR, October 1 (AJP) - Located in Selangor, one of Malaysia's largest states, the Sepang District is known as the Silicon Valley of Malaysia. Deeper within the district lies Banguris Homestay, a village dedicated to showing guests how real Malay people live. With around 20 government-certified houses available for homestays, visitors can enjoy naturally ventilated rooms and authentic Malaysian food. The town boasts near-zero crime rates, and most households have no fences or security measures, making for a safe yet open visit. Beyond the vast dragon fruit and palm tree plantations that cover most of the village, there's a hands-on experience center showcasing how Malay people used to live off the land. At Banguris Homestay main center, visitors can try extracting their own coffee beans the traditional way. The tour guide explains that in the old days, Malay farmers used wooden presses shaped like flat, pattern-less waffle machines to pop coffee beans from the coffee cherries. The beans are dried for a few days, then roasted to brew real coffee. Next, the experience center offers a full demonstration on how to pluck palm fruits from palm trees. Usually harvested twice a month, the fruits come in bulks of around 50 to 70 kilograms each, with poisonous spikes protruding from the stems. A seasoned worker hacks away excess palm leaves to reveal the fruit bulk, sawing it off in seconds. While dangerous to harvest, the fruit is one of the nation's major export items. Palm oil is extracted from the outer red flesh of the fruit, while the white seeds inside are used in many cosmetics. Under the shade of the trees, the tour guide gestures toward the next stop: harvesting rubber from rubber trees. Visitors can try peeling the bark off trees so rubber flows out like a stream. While only a few trees are available for simple demonstrations, actual harvesting usually begins early in the morning, as Malaysia's hot and humid air can easily spoil raw rubber. Once the liquid fills each gathering cup to the brim, it's sent to factories to harden and later processed for commercial use. Besides trying Malaysian farming methods, visitors to Banguris Homestay can also enjoy stick fishing in nearby rivers and visit cassava root factories to see how rural country folks process the sweet-smelling roots into crunchy snacks. 2025-10-01 08:50:57

Lee to hold talks with OpenAI CEO Sam Altman in Seoul SEOUL, October 1 (AJP) - President Lee Jae-myung is meeting with OpenAI CEO Sam Altman at the presidential office in Seoul on Wednesday. During the meeting, Lee is expected to seek Altman's advice on Soth Korea's strategy for transitioning to the artificial intelligence (AI) era, while encouraging collaboration with domestic companies and greater investment in the country. Lee has prioritized making South Korea one of the world's top three AI powerhouses and is actively promoting policies to foster related industries. Recently, Altman met with BlackRock CEO Larry Fink in New York, where he expressed his vision of making South Korea the AI hub of the Asia-Pacific region. * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-10-01 08:24:35

[[Korea-Japan Ties]] South Korea weighs FTA with Japan amid US protectionism Editor’s Note: Aju Business Daily is publishing a special series to mark the 60th anniversary of the normalization of diplomatic ties between South Korea and Japan. The series reflects on the renewed relationship between the two neighbors. SEOUL, October 01 (AJP) - Facing growing protectionist pressures from Washington, South Korea is under increasing pressure to deepen economic ties with Japan as the two countries mark 60 years of diplomatic relations. Calls are mounting for a revival of talks on a long-stalled bilateral free trade agreement, though many in Seoul argue that joining a broader regional pact should take priority. Negotiations on a South Korea-Japan free trade deal have been frozen since 2012, hampered by decades of economic rivalry and unresolved historical issues. The debate has gained urgency after President Lee Jae Myung returned from the United Nations General Assembly in New York last month without progress on U.S. tariff disputes. South Korea’s trade minister, Yeo Han-gu, also met with U.S. Trade Representative Jamieson Greer, but the talks ended without a breakthrough. The lack of progress with Washington has prompted calls for a “Plan B.” But an FTA with Japan would not be without costs: South Korea has never recorded a trade surplus with its neighbor since relations were normalized in 1965, and over the past five years alone, it has posted a deficit of $88.6 billion. The Korea Institute for Industrial Economics and Trade has cautioned that a bilateral pact could deepen that imbalance, particularly through rising imports of automobiles, petrochemicals and electronics. Instead, many economists and officials are looking toward the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a Japan-led trade bloc that includes 12 countries such as Australia, Canada and Britain and accounts for 15 percent of global GDP. Deputy Prime Minister Koo Yoon-cheol recently said Seoul would explore membership, while Trade Minister Yeo has held talks with counterparts from Australia, New Zealand and Indonesia. Joining the pact would open South Korean exporters to markets such as Mexico, which is preparing to levy tariffs as high as 50 percent and with which Seoul has no bilateral free trade deal. Analysts say the benefits could outweigh those of a narrower Japan pact. “Evaluating the need for a South Korea-Japan FTA after joining the CPTPP is not too late,” said Jeong Seong-chun, a senior researcher at the Korea Institute for International Economic Policy. But hurdles remain steep. Domestic opposition, particularly from farmers worried about foreign competition, is strong. Membership requires unanimous consent from current members, and Japan has signaled it could use its leverage to press Seoul to resume imports of Japanese seafood — a sensitive issue tied to lingering fears over contamination from the Fukushima nuclear disaster. Still, analysts say the shifting trade environment may leave Seoul with little choice. With Washington doubling down on tariffs and supply chain controls, South Korea’s options may hinge less on resolving bilateral disputes with the United States than on securing a place in the regional trade architecture that Tokyo now leads. * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-10-01 08:19:03

Korean Auto Eyes Diversification, Localization Amid Tariff Stalemate SEOUL, September 30 (AJP) - South Korea’s government and automaking conglomerate are tapping alternative markets and local sourcing as tariff talks with the United States drag on without conclusion. Hyundai Motor Group has rolled out contingency measures while negotiations remain in limbo. The automaker is leaning more on domestic suppliers, adjusting dealer incentives to avoid immediate consumer price hikes, and accelerating model launches in Europe. Hyundai Mobis, the group’s parts arm, last week hosted the inaugural Auto Semicon Korea forum with 23 companies and research institutes—a move widely seen as part of a broader push to localize auto semiconductor production. “In the short term we are adjusting dealer incentives to avoid raising consumer prices, while in the longer term we are focusing on local sourcing and expanding production in the United States,” a Hyundai official said. Seoul and Washington reached a provisional deal to cut U.S. tariffs on Korean cars from 25 percent to 15 percent, but a final agreement has yet to be signed. Korean brands remain disadvantaged, facing a 25 percent levy compared with the 15 percent rate applied to Japanese and European cars. The industry ministry has rolled out low-key support, including a “Trade Law Caravan” program to help small and medium-sized suppliers navigate U.S. regulations and prepare contingency plans. Cars are a pillar of Korea’s exports. Last year, Korea shipped $43 billion worth of cars to the U.S., dwarfing $2.5 billion in imports. Exports to Europe totaled $2.7 billion against $7.85 billion in imports, while shipments to Japan hit nearly $3 billion—triple its imports from Japan. “The tariff burden will likely cut Hyundai Motor Group’s operating margin by about 1 percentage point this year and up to 2 percentage points if fully applied,” said Lee Jae-il of Eugene Investment & Securities. “But basic product competitiveness remains intact, so there will be no sudden shift in demand toward Japanese or European cars.” The global auto chip market is projected to expand 9 percent annually to reach $138 billion by 2030, underscoring why Hyundai Mobis is aiming to boost the share of locally developed semiconductors to 10 percent by that year. “We are expanding joint development with fabless firms and design houses while strengthening ties with major foundries,” said Lee Kyu-seok, president of Hyundai Mobis. “We will also encourage IT and mobile companies to enter the auto sector, helping build a domestic ecosystem.” Executive vice president Park Chul-hong added that optimizing chips with controllers and conducting real-car testing will “speed up development and enhance competitiveness.” 2025-09-30 17:46:50

Business groups welcome end of criminal penalties for corporate missteps SEOUL, September 30 (AJP) - The South Korean government's plan to abolish a criminal law clause that has long exposed corporate executives to prosecution for breach of trust drew strong support from business groups on Tuesday, who argued the change would reduce legal uncertainty and encourage investment. The government and ruling party said the clause — which allowed prosecutors to pursue executives for management decisions that resulted in losses, even absent personal gain — would be eliminated as part of a broader economic penalty reform package. The shift places greater emphasis on administrative and financial penalties rather than criminal charges. The Korea Chamber of Commerce and Industry welcomed the move as a “first step” toward more predictable corporate governance, noting that aggravated penalties for breach of trust had created a chilling effect on decision-making. Critics of the breach of trust provision have long said its vague standards turned legitimate but risky business decisions into potential criminal cases, discouraging executives from pursuing bold investments. Democratic Party floor leader Rep. Kim Byung-ki said in a recent task force meeting that the clause had “become a burden on normal business operations,” while President Lee Jae Myung remarked on Sept. 15 that excessive punishment risked deterring investment. Other business lobbies, including the Korea Enterprises Federation and the Korea Employers Federation, issued statements calling the reform timely and potentially a foundation for further regulatory improvements. The Korea International Trade Association said in a statement that it hoped the changes would help achieve the government’s goal of reducing overall economic penalties by 30 percent and ensure industry voices are reflected in subsequent legislation. * This article, published by Economic Daily, was translated by AI and edited by AJP. 2025-09-30 17:43:55

Korea shrugs off Trump's tariff threat on foreign-made films SEOUL, September 30 (AJP) - South Korea's film industry officials and legal experts largely brush off U.S. President Donald Trump's latest threat about slapping tariffs on movies filmed outside the American soil. Speaking on Monday, Trump said his administration would levy "100 percent tariffs" on films that were not fully produced within the United States, repeating a proposal he first raised in May. South Korea's national film agency, the Korean Film Council (KOFIC), told AJP, the measure, even if enforced, would likely have little impact on Korea's film industry. "In 2024, Korea's film industry revenue from theaters, TV video-on-demand, and overseas sales totaled about 1.4 trillion won ($997.3 million). Exports accounted for only 4 percent, or about 57.1 billion won, and U.S. exports were just 0.4 percent, around 5.7 billion won," KOFIC said. It added that because the U.S. share is so small, "the overall effect on Korea's film industry is expected to be limited." KOFIC also noted that Hollywood itself might feel the brunt of such a policy. "Large studio projects often rely on overseas filming to benefit from foreign location incentives and reduce costs," it said. With studios now transferring raw footage through high-speed cloud systems instead of physical reels or hard drives, the agency questioned whether tariffs could even be applied in today's digital environment. Korea's film and drama industry has built a strong presence on the global stage. International hits such as the Netflix series "Squid Game," the historical zombie thriller "Kingdom," and the romantic period drama "Bon Appétit, Your Majesty" have shown Korea's strength in television, while films like "Parasite," which won the Academy Award for Best Picture in 2020, and blockbusters such as "Train to Busan" have cemented Korean cinema's international reputation. Even so, KOFIC warned that a drawn-out tariff dispute could still have side effects. Less access to the U.S. market might make joint productions harder and reduce opportunities for distribution. Importers could also hesitate to bring Korean titles into the U.S. "This could slightly slow down Korea's global expansion in film, even if the direct financial impact remains small," KOFIC said. Legal experts in Seoul are also skeptical about the plan. Attorney Kim Ji-hee, a lawyer at the Seoul-based firm ELPS, told AJP the measure lacks clear legal grounds and workable criteria. "There is no solid legal basis for such a tariff, and the criteria for determining what counts as a foreign-made film remain ambiguous," she said. Kim explained that U.S. courts have long treated film as part of the cultural sector, tied closely to freedom of expression and usually excluded from emergency trade measures. "Even if Washington tries to push ahead, the ambiguity of the target and the standards would open the door to serious legal challenges," she added. Kim also pointed to the practical problems of valuing and taxing digital content. "In the past, customs authorities could impose tariffs on physical media like reels or tapes. But now, when raw footage is transmitted digitally and screenings rely on encrypted files, it is unclear how a tariff could be calculated or enforced," she said. 2025-09-30 17:36:37

Korea bets on visa-free entry for Chinese group tourists to boost inbound spending SEOUL, September 30 (AJP) - Korea, grappling with yawning travel deficit, pins high hopes on the temporary visa waiver for Chinese group tourists to aid the balance sheets of the government as well as domestic retailers. The travel balance of payments in the national current account has been in the red since 2000 as more go out and spend than those coming in. The deficit totaled $7.2 billion as of July this year, slightly eased from $7.9 billion a year earlier on the rise of foreign arrivals. The red however is expected to deepen in the fourth quarter as this year's Chuseok Thanksgiving holiday extends up to 12 days. During the nine-day Lunar New Year holiday in January, the deficit ballooned to $1.68 billion. As many as 1.1 million are expected to leave the country for overseas during the upcoming holiday break. The number of Koreans traveling abroad during the extended Chuseok break has surged by around 80 percent compared with last year. Demand for short-haul destinations stood out, with 62 percent of flight bookings concentrated on routes to Japan and key Southeast Asian countries. The government has introduced a visa waiver program for Chinese group tourists on Monday, timed with China's Golden Week merging the Mid-Autumn Festival and National Day. The program, available until June 30, 2026, allows groups of three traveling through authorized agencies enter Korea without a visa. "It feels like reuniting with an old friend," said 24-year-old Chinese readying a trip to Korea. She had studied in Korea and wished to return because of the "feeling of emptiness." The government estimates the new visa-free policy could bring in an additional 1 million Chinese tourists in the first half of next year. If the trend continues, total foreign arrivals in Korea could surpass 20 million for the first time by the end of 2025. Chinese group tourists used to be the bedrock to Korea's tourism industry. Chinese arrivals peaked at 8.07 million in 2016 before shriveling to 170,000 in 2021 amid diplomatic spat over Korea's installation of a U.S. antimissile system and pandemic. The number recovered to 4.6 million last year and 3.13 million in the January–July period. The numbers however did not translate into past boon for retailers. Individual travelers opted to explore the country than go on a shopping spree here. The government hopes the full return of Chinese group tourists may do the magic. Korea came first as the top travel destination for the Chinese in their Golden Week, according to Trip.com booking data release. "The industry expects the government's visa waiver program for Chinese group tourists to support a rebound in duty-free sales," an official from Hyundai Department Store Duty Free said. "We are expanding services to enhance convenience for Chinese visitors, including matching our membership tiers with Alipay and WeChat Pay to provide immediate discounts year-round." Contribution by Hoang Phuong Ly 2025-09-30 17:16:40

N. Korea returns to UN podium, building up diplomatic portfolio SEOUL, September 30 (AJP) - North Korea has returned to the United Nations for the first time in seven years, suggesting renewed confidence after the powerful display of its leader standing alongside the heads of China and Russia earlier this month. Taking the podium at the UN General Assembly on Monday, North Korea's Vice Foreign Minister Kim Son-gyong openly defied UN resolutions, reiterating that Pyongyang would "never give up nuclear weapons under any circumstances." He argued the arsenal ensures a balance of power on the Korean Peninsula against what he described as U.S.-led "war rehearsals." Still, he left the door open to cooperation with countries that respect and treat the North "in a friendly way." The UN return follows a flurry of recent diplomatic activity, starting with a symbolic photo-op at China's "Victory Day" parade in Beijing, where North Korean leader Kim Jong-un mingled with Chinese President Xi Jinping and Russian President Vladimir Putin. Three weeks later, North's Foreign Minister Choe Son-hui returned to Beijing for separate meetings with her Chinese counterpart Wang Yi last Sunday and Premier Li Qiang the following day. Choe stressed Pyongyang's "consistent position to strengthen and develop the two countries' friendship and cooperation to meet the needs of the present era," while praising China's growing global stature. Pyongyang's newfound confidence partly owes to friendly overtures from U.S. President Donald Trump. During his summit with South Korean President Lee Jae-myung last month, Trump said he hoped to meet North Korean leader Kim Jong-un before the year ends. Analysts speculate Pyongyang is seeking to elevate its international profile to strengthen its position should negotiations with Washington resume. "North Korea's message is clear. It wants to be recognized as a nuclear state," said Oh Gyeong-seob, a senior research fellow at the Korea Institute for National Unification. He added that Trump's remarks about Kim appear to have encouraged Pyongyang to take a "more active stance." Oh also expressed concern over remarks from Seoul. South Korean Unification Minister Chung Dong-young said Monday that North Korea has become one of only three countries capable of striking the U.S. mainland—an unusually blunt acknowledgement. "The claim itself is problematic, and it risks signaling that Seoul is effectively recognizing North Korea as a nuclear-armed state. The statement cannot be appropriate for a unification minister," Oh warned. 2025-09-30 17:06:17