Hanwha chairman pledges AI defense push, deeper Korea-US shipbuilding ties SEOUL, January 02 (AJP) - South Korea's Hanwha Group is eager to strengthen its long-term competitiveness by securing core technologies in key businesses, including artificial intelligence-driven defense systems, while playing a leading role in South Korea-U.S. shipbuilding cooperation, Chairman Kim Seung-youn said in a New Year's message on Friday. Kim said Hanwha had spearheaded bilateral industrial cooperation symbolized by the MASGA initiative and grown into a national champion in defense and shipbuilding over the past year. He said the group is now “recognized as an essential engine for industry and society,” adding that this status carries greater responsibility. Kim emphasized a shift toward a technology-led growth strategy. “To secure competitiveness over the next 50 or 100 years, we must possess the foundational technologies that will shape the future in key business areas such as AI defense,” he said. He called on Hanwha to focus on future-leading technologies across its portfolio, including defense, aerospace, maritime, energy, materials, finance, machinery and services. By business unit, Kim urged the energy and materials divisions to respond proactively to global policy changes and ongoing restructuring in the petrochemical sector. In finance, he proposed expanding global operations by combining digital assets and artificial intelligence, while the services unit should develop new growth models through closer integration with machinery businesses, including AI-based solutions. Kim also highlighted MASGA as a central pillar of Korea-U.S. shipbuilding cooperation, saying Hanwha must position itself as a trusted strategic partner in global markets. He said the initiative should be planned and executed with a sense of full responsibility, centered on the company’s U.S.-based Philly Shipyard, and that cooperation in warship and nuclear-powered submarine construction should further deepen bilateral ties. Pointing to Hanwha Ocean’s decision to pay performance bonuses to workers at partner companies at the same rate as those for directly employed staff, he stressed that partner-company employees and local communities are integral to the group’s operations. On safety, Kim delivered a firm message, calling it a core value for sustainable management. “Results cannot replace a life,” he said. Kim also said Hanwha has turned a long-envisioned future into reality by entering the era of private space and establishing itself as a key player in the global defense industry. He credited employees for their continued dedication and urged them to work together to further strengthen the group. 2026-01-02 13:46:01

South Korea splits economy ministry in major overhaul of economic governance SEOUL, January 02 (AJP) - South Korea on Friday formally split the Ministry of Economy and Finance into two separate ministries, a move the government says will strengthen fiscal discipline and policy accountability but that raises questions about coordination in economic crisis management. The reorganization creates the Ministry of Planning and Budget and the Ministry of Finance and Economy, separating budget authority from macroeconomic, financial and tax policy. The two ministries officially launched at the Government Complex in Sejong, marking one of the most significant changes to South Korea’s economic governance in nearly two decades. The Ministry of Finance and Economy began operations following a signboard ceremony at the former ministry’s main building, while the Ministry of Planning and Budget moved into Building 5, previously occupied by the Ministry of Oceans and Fisheries. The physical separation underscores the institutional overhaul, which divides budget and economic policy functions that had operated under one roof. Under the new structure, the Ministry of Planning and Budget will be responsible for national fiscal management, including budget formulation, execution and performance evaluation. The Ministry of Finance and Economy will serve as the government’s economic “control tower,” overseeing macroeconomic management, financial and tax policy, and external economic affairs. It is the first time since the Ministry of Economy and Finance was launched in 2008 that budget and economic policy functions have been separated, ending an 18-year combined system. The government said the change was driven by concerns that concentrating budget, tax and economic policy in a single ministry had led to excessive power and reduced policy flexibility. With large-scale fiscal spending becoming more routine, officials said an independent budget authority would help reinforce fiscal discipline, while a dedicated finance and economy ministry could respond more nimbly to economic cycles and focus on industrial and financial policy. However, questions remain over whether the Ministry of Finance and Economy can function effectively as an economic control tower without direct budget authority. Critics warn that policy impact could be limited if growth strategies and crisis responses cannot be backed by swift budgetary action. Policy coordination between the two agencies is also emerging as a key test. Because fiscal policy plays a central role in economic stabilization, misalignment between budget planning and macroeconomic policy could weaken outcomes. Past periods of institutional separation were marked by coordination failures and disputes over responsibility, some observers say. The Ministry of Planning and Budget faces immediate challenges from population aging, rising welfare spending and mounting calls for expansionary budgets to support a slowing economy, while being tasked with preserving fiscal soundness. Its effectiveness will likely depend on strengthening midterm fiscal planning and maintaining tighter control over spending demands from other ministries. The Ministry of Finance and Economy is launching amid heightened global uncertainty, including shifting interest-rate trends, intensifying U.S.-China technology rivalry and ongoing supply-chain restructuring. It must balance inflation control with efforts to revive growth, while managing tax policy, financial-market stability and external economic negotiations without direct budget levers. Analysts say the reorganization risks confusion and accountability gaps. But if clear roles and a permanent coordination mechanism are established, the split could enhance both fiscal discipline and economic responsiveness. The government has said it plans to limit policy friction through regular consultations and joint response systems. 2026-01-02 11:19:52

KOSPI kicks off new year while most Asian markets stay closed SEOUL, January 2 (AJP) - Most Asian bourses remained closed for New Year celebrations on Friday, while South Korea's stock market opened an hour later than usual, amid expectations of reaching a new all-time high for the year. With Taiwan's TAIEX and Hong Kong's Hang Seng Index open, South Korea's benchmark KOSPI opened higher, up 0.57 percent at 4,238. Having already surpassed its previous intraday peak, attention now turns to whether it can close above its record high of 4,221.87. The rally is being led by retail investors, who have net purchased 110.6 billion Korean won (US$76.7 million) worth of shares. In contrast, foreign and institutional investors have offloaded 81 billion won and 35 billion won, respectively. Blue-chip stocks gained ground across the board. Samsung Electronics rose 2.6 percent to 123,000 won, continuing its record-breaking streak, while SK hynix posted a more modest gain of 0.8 percent to trade at 657,000 won. The semiconductor sector maintains its upward momentum as global demand remains robust and domestic and foreign brokerages continue to raise earnings forecasts for both tech giants. Celltrion emerged as the standout performer, surging 9.5 percent to 198,500 won. The surge followed a preliminary disclosure projecting a more than 140 percent increase in operating profit compared to the same period last year. However, some firms faced significant headwinds. Korea Zinc dropped 2.4 percent to 1,285,000 won during the morning trade following the Chinese government's announcement of export controls on silver. The move raised concerns over supply disruptions and potential margin erosion for the non-ferrous metal producer. In the currency market, the won weakened slightly against the greenback, trading at 1,440.50 per dollar. Meanwhile, Taiwan's TAIEX rose 0.4 percent to 29,050.75, with Taiwan Semiconductor Manufacturing Co. (TSMC) gaining 0.3 percent to 1,555 Taiwan dollars ($49.6). MediaTek led the gains on the index, jumping 1.75 percent to 1,455 Taiwan dollars. The Hang Seng Index opened 0.87 percent higher at 25,860, recording the strongest start among Asian markets. Heavyweight Tencent Holdings edged up 0.25 percent to 600 Hong Kong dollars ($77), while Alibaba Group gained 0.28 percent to 143 Hong Kong dollars. Tech giant Xiaomi also traded up 0.3 percent at 39.5 Hong Kong dollars. 2026-01-02 11:16:53

Korea's growth reliant on IT sector as inflation risks linger: BOK chief SEOUL, January 02 (AJP) - South Korea’s economy would grow just 1.4 percent this year if the information technology sector were excluded, the country’s central bank chief said Friday, warning that uneven recovery across industries could leave households feeling worse off than headline growth figures suggest. Bank of Korea Governor Rhee Chang-yong said in a New Year’s message that overall economic growth is projected at 1.8 percent this year, up from 1 percent last year and close to the economy’s potential growth rate. However, he cautioned that uncertainty remains high on both the upside and downside. Rhee said the outlook will hinge on factors including the global trade environment, the semiconductor cycle and the strength of the recovery in domestic demand. Describing the current rebound as “hardly sustainable or complete,” Rhee urged continued structural transformation to prevent economic expansion from becoming repeatedly concentrated in a single sector. He stressed the need to foster new industries to broaden the growth base. The governor also highlighted lingering uncertainty over an investment agreement with the United States, saying it is difficult to conclude the issue has been fully resolved as details on investment targets and implementation methods still require coordination. Addressing concerns that annual investment flows of about $20 billion to the United States could weaken the Korean won, Rhee said the funds would not flow out in a fixed or mechanical manner each year. He added that the BOK, together with the government, would not agree to any arrangement that undermines stability in the foreign-exchange market. On inflation, which has recently risen to the low-to-mid 2 percent range, Rhee warned that persistent weakness in the won could reignite inflationary pressure. He noted that cumulative price increases since the pandemic have significantly raised living costs, disproportionately burdening lower-income households. Rhee said stabilizing inflation cannot be achieved through monetary policy alone. He called for parallel structural reforms aimed at lowering overall price levels, including improving distribution systems and expanding import liberalization for goods that remain expensive by international standards. 2026-01-02 10:39:12

Seoul shivers through freezing start to new year SEOUL, January 2 (AJP) - Biting cold continues to linger, with morning lows in Seoul and other metropolitan areas plunging to -12 degrees Celsius on Friday. According to the Seoul Metropolitan Government, the freezing temperatures brought plenty of incidents including burst pipes, although no cold-related illnesses such as hypothermia were reported. As the cold wave advisory issued by the Korea Meteorological Administration on New Year's Eve remained in place, the city government deployed about 247 staff and workers to operate emergency shelters and other facilities, in collaboration with some 25 local districts and agencies, while maintaining around-the-clock monitoring. It also provided temporary housing, along with free meals and medical care to around 63 homeless people, and checked on the safety of over 10,000 elderly citizens living alone. "Vulnerable people such as the elderly are advised to stay indoors. If going outside is unavoidable, make sure to bundle up warmly," the city urged. 2026-01-02 10:29:00

Taiwan, Singapore surge on chip boom while Korea lags at 1% amid regulatory drag SEOUL, January 02 (AJP) -Taiwan and Singapore posted markedly stronger economic growth in 2025, powered by the global semiconductor boom, while South Korea lagged far behind despite being one of the world’s leading chip producers, highlighting the growing role of regulatory and policy conditions in shaping economic performance. Taiwan’s economy is projected to have expanded by 7.37 percent last year, according to last estimate by the Directorate-General of Budget, Accounting and Statistics, while the Ministry of Trade and Industry on Friday placed preliminary annualized growth of Singapore at 4.8 percent for 2025, accelerated from 4.4 percent in 2024. The Bank of Korea estimate for South Korea's growth in 2025 despite record exports is at around 1 percent. The widening gap underscores how differently Asia’s export-driven economies are translating the semiconductor upcycle into broader growth. “The wide gap in last year’s growth rates for South Korea and Taiwan — 1 percent and 7 percent — largely reflects differences in how aggressively companies invest and the regulatory environment that supports that investment,” said Jang Sang-sik, head of the Institute for International Trade at the Korea International Trade Association, in a survey conducted by Aju Business Daily. Although South Korea and Taiwan share similar industrial structures and heavy reliance on exports, Taiwan has taken a more proactive role in removing bottlenecks related to land, electricity, water supply and permits, Jang said. He added that Taiwan also enhances policy predictability by giving advance notice of regulatory changes and collecting feedback before implementation. Regulation weighs on Korea’s growth outlook Survey respondents to New Year's survey by the Aju Business Daily pointed to South Korea’s regulatory environment as a key factor holding back investment, especially as new technologies converge with traditional industries. Experts warned that preemptive or overly restrictive regulation in areas such as autonomous driving, artificial intelligence, drones and biotechnology could stifle innovation before it reaches commercial scale. They argued that allowing companies to compete within clearly defined boundaries is more effective than imposing broad preventive controls. Criticism has also focused on South Korea’s reliance on after-the-fact enforcement. Lee Su-won, a member of the Korea Chamber of Commerce and Industry’s corporate policy team, said uncertainty over legal liability discourages bold investment decisions, mergers and acquisitions, and corporate restructuring, ultimately weakening competitiveness. Labor and governance reforms raise business concerns Concerns have intensified under the Lee Jae Myung administration as a series of labor and corporate governance reforms move forward. In the New Year survey conducted on major business organizations, corporate groups and academic experts, respondents overwhelmingly identified the so-called Yellow Envelope Act — revisions to the Trade Union and Labor Relations Adjustment Act — as the most serious risk to corporate management this year. All respondents said the law would undermine companies’ ability to make independent management decisions, with 42.9 percent saying its impact would be “very large.” The legislation expands bargaining obligations to subcontractors and limits liability for damages related to labor disputes, raising concerns about increased labor conflicts and legal uncertainty. Business groups also expressed strong reservations about revisions to the Commercial Act, including expanded directors’ fiduciary duties to shareholders, strengthened audit committee rules and mandatory cancellation of treasury shares. More than 70 percent of respondents said the first two revisions would negatively affect corporate management, while a majority also viewed the treasury-share rule unfavorably. Views were more divided on raising the mandatory retirement age to 65. While many companies said they could adapt through rehiring or internal adjustments, they warned of higher labor costs and reduced flexibility. Experts stressed that any reform should be phased in carefully and tailored by industry and company size. Call for productivity-led reform Despite differing views on specific policies, experts broadly agreed that productivity gains — particularly through artificial intelligence — will be critical to sustaining growth as Korea faces demographic decline. “We need to combine the experience of older workers with efficiency gains driven by AI,” said Yoon Won-joo, a professor at Hankuk University of Foreign Studies, calling for a “productivity revolution through AI collaboration.” Business groups urged policymakers to slow the pace of regulatory changes and clarify standards before enforcement, warning that uncertainty itself has become a major drag on investment. Several executives said clearer distinctions are needed between intentional wrongdoing and normal business judgment, arguing that excessive legal risk discourages long-term decision-making. 2026-01-02 09:53:33

Kim Jong-un's daughter makes first public visit to family mausoleum SEOUL, January 2 (AJP) - North Korean leader Kim Jong-un ushered in the new year with a visit to the mausoleum where the embalmed bodies of his grandfather and regime founder Kim Il-sung, and his father Kim Jong-il lie in state, state media reported on Friday. According to the state-run and the promotion of the people's wellbeing, true to the ideas and leadership of Kim Jong-un with single-minded loyalty," KCNA said. His customary visit drew particular attention after photos released later showed his daughter Ju-ae in attendance along with her mother Ri Sol-ju. It was the teenage girl's first attendance at such an event since making her first public appearance in 2022 in the reclusive country, while Kim has visited the mausoleum almost every year, with only occasional exceptions. Ju-ae appears to be being groomed as North Korea's next leader, although rumors persist that Kim has a son whom nobody has ever seen. Some pundits speculated that Ju-ae's front-row presence during the tribute could signal a possible succession, coming just hours after she publicly kissed her father at a New Year's Eve event. 2026-01-02 09:41:45

Hyundai Motor Group to showcase AI robotics strategy at CES 2026 SEOUL, January 02 (AJP) - Hyundai Motor Group plans to present robotics-centered visions for future mobility at CES 2026, highlighting a broader industry shift from vehicles toward robots and artificial intelligence, industry officials said Friday. Hyundai Motor Group will attend CES 2026, which opens next week in Las Vegas, where it will outline its core strategy for AI-driven robotics. A key highlight will be the first live demonstration of Atlas, the humanoid robot developed by affiliate Boston Dynamics. Hyundai Motor Group and Boston Dynamics plan to begin testing Atlas at Hyundai Motor Group Metaplant America, the automaker’s manufacturing facility in Georgia, before gradually deploying it at factories in South Korea and other locations. The group is also expected to detail plans to validate robotics technologies through a software-defined factory, using production-line testing to refine and expand its AI robotics ecosystem. Under the strategy, robots would be deployed and verified in manufacturing environments, with operational data fed back into system upgrades. Hyundai Motor Group plans to build out its AI robotics ecosystem in phases, covering robot hardware as well as AI software, services and platforms. Affiliates will also showcase a range of technologies. Hyundai Mobis will present more than 30 mobility-convergence solutions, including its integrated cockpit platform M.VICS 7.0 and electronic control system X-by-Wire, with a focus on securing orders from North American customers. Hyundai Wia is expected to seek new clients by unveiling a future-oriented vehicle climate-control system dubbed “distributed HVAC,” along with next-generation drive components. The growing emphasis on robotics and AI reflects a broader shift in the mobility industry. Several global automakers that attended CES last year — including Toyota Motor, Volkswagen AG, and U.S. manufacturers General Motors, Ford Motor and Stellantis — will not participate this year, while robotics and autonomous-driving companies are expected to draw greater attention. HL Mando, a major South Korean auto parts supplier under HL Group, will operate a joint booth with affiliates under the theme “robots, AI and mobility,” positioning robotics as a future core business. The company plans to present a mid- to long-term roadmap to enter the robotics market, leveraging its decades of experience in automotive components, software capabilities and global supply chain. This year's CES is expected to highlight technologies such as AI, robotics, mobility, digital health and quantum computing, which are increasingly blurring industry boundaries. 2026-01-02 09:29:26

Tesla price cuts set to spur EV competition in South Korea SEOUL, January 02 (AJP) - Tesla’s decision to cut prices on key electric-vehicle models in South Korea is expected to intensify competition in the country’s EV market, as expanded government subsidies and the growing presence of imported brands put pressure on domestic automakers. The U.S. firm has discounted the Model 3 Performance all-wheel-drive version by up to 9 million won ($760), lowering its price below 60 million won, the threshold for eligibility for South Korea’s EV purchase subsidies. The move comes as Seoul strengthens policy support for electric vehicles and as Chinese manufacturers prepare to enter the market with lower-priced models. Under the government’s revised 2026 EV purchase subsidy plan released on Jan. 1, buyers who scrap or sell gasoline-powered or other internal-combustion vehicles and then purchase an EV will be eligible for up to 1 million won in additional subsidies starting this year. The measure broadens support as South Korea works toward its 2035 national greenhouse gas reduction target under its nationally determined contribution (NDC), though per-vehicle subsidy amounts remain unchanged from last year. Industry officials expect competition between domestic and imported brands to intensify under the expanded incentives, with around 20 new EV models scheduled to launch in South Korea this year. Imported brands have steadily increased their market share. According to the Korea Automobile Importers & Distributors Association, new EV registrations in South Korea totaled about 207,000 units from January through November last year. Imported vehicles accounted for 84,045 units, or 40.6 percent of the market, up from 25 percent in 2022 and 29.2 percent in 2023. Tesla remains one of the dominant players. Led by the Model Y, the company sold 55,594 vehicles in South Korea from January through November last year, ranking second behind Kia, which sold 59,939 units. Model Y sales reached 46,927 units, the highest of any EV model sold in the country. Chinese automakers are also expanding their presence. BYD, which ranked third in South Korea’s imported EV market in its first year, has signaled plans to launch the compact electric SUV Dolphin, which it said could be priced in the 20 million won range after subsidies. Following Zeekr’s market entry last year, Xpeng is also expected to enter the South Korean market this year. Domestic automakers are responding with new models. Hyundai Motor plans to launch the Genesis flagship electric GV90, while Kia is preparing to introduce new electrified vehicles, including GT versions of the EV3, EV4 and EV5. “The EV market will see very fierce competition this year as imported brands move into South Korea to strengthen global competitiveness,” said Kim Pil-soo, a professor of future mobility at Daelim University College. Hyundai and Kia “have no choice but to roll out proven models” to defend their home market against foreign rivals competing aggressively on price, he said. 2026-01-02 08:25:10

OPINION | Korea's AI ambition falters where it matters most: data security South Korea speaks confidently of becoming an “AI powerhouse,” yet the foundation of that ambition — data governance — remains dangerously fragile. The reported leak of 33.7 million Coupang user records is not just another corporate security lapse. It exposes a deeper structural failure in how the country understands, designs and governs data itself. Each time a major breach occurs, authorities respond with familiar language: tougher oversight, stricter certification, stronger encryption. But the pattern repeats. The reason is simple. Korea’s security framework remains focused on outer defenses — access controls, compliance checklists and perimeter protection — while neglecting the core of the system: how data are structured, classified and controlled inside databases. In the digital era, data are no longer a byproduct of administration or commerce. They are a strategic national asset, increasingly concentrated in large cloud-based systems. That reality demands a shift in thinking, from “protecting networks” to governing data itself. Yet repeated government network outages and recurring large-scale leaks suggest that this shift has yet to occur. The Coupang case illustrates the problem starkly. Reports indicate that tens of millions of records — amounting to several terabytes — were accessed over months. Such a volume could not plausibly have been extracted through a simple external intrusion or a personal device. It points instead to access at the core database level, what might be called the system’s “inner room.” This matters because database security is fundamentally different from general information security. It is not about building higher walls at the entrance, but about deciding — at the design stage — who can see which data, under what conditions, and with what technical limits. In advanced systems, high-value data are separated from general data and stored in dedicated databases with multiple clearance levels. Even if someone penetrates the network, they cannot read or copy sensitive data without the appropriate authorization. This is why database security has long been treated as a national-security issue in countries such as the United States. Multi-level security architectures, originally developed for defense systems, classify data by sensitivity and strictly limit access rights. Users cannot read or write information above their clearance level, and abnormal access attempts are automatically blocked and logged. South Korea, by contrast, still operates largely on a “front-door security” model. Once inside the system, internal users may retain excessively broad privileges. Reports that a single account could access tens of millions of personal records — if accurate — point to a breakdown of basic principles such as separation of duties and least-privilege access. Audit logs, meant to detect abnormal behavior, appear to have functioned more as formalities than as real safeguards, given that unusual activity allegedly went unnoticed for months. This regulatory blind spot is not accidental. Oversight has focused on visible security measures and certification processes rather than on the substance of database architecture. Even parliamentary reviews tend to stop short of examining how data are actually structured and governed. As a result, database security remains a gray zone — acknowledged rhetorically, but weakly regulated in practice. The distinction between “protection” and “security” matters here. Protection refers to outward defenses and compliance checklists. Security, in contrast, is a matter of national resilience. Treating database security as a subset of general IT protection understates its strategic importance. It requires its own legal basis, supervisory authority and professional standards. This also exposes the limits of the current “chief information security officer” model. Database governance demands specialized expertise that cannot be absorbed as a side function. What is needed is a separate framework — and accountability structure — dedicated to data security, including legally defined responsibilities and enforcement powers. Nor should “data” be treated as a vague or all-encompassing term. A database is not an Excel file. It is a structured system governed by a data model, and its security depends on how that model is designed. True data governance requires expert architects who define how information is classified, linked and accessed across systems. Without such design discipline, encryption alone offers little protection. Indeed, many firms quietly avoid encrypting core databases, citing performance concerns. But those concerns often stem from poor data architecture. Properly designed systems can handle encryption without meaningful slowdowns. Encryption becomes ineffective only when insiders already have unrestricted privileges — a design failure, not a technical inevitability. The same logic applies to Korea’s most sensitive identifier, the resident registration number. After decades of leaks, encrypting it offers limited protection if it continues to be widely used across the private sector. Preventing harm now requires institutional reform, including restricting its usage and redesigning identity systems for the internet era. Slogans about a “data dam” or an “AI powerhouse” ring hollow if the databases holding that data remain poorly governed. Artificial intelligence cannot be built on structurally weak foundations. Without robust data design, access control and accountability, AI simply scales existing vulnerabilities. The Coupang case should therefore be treated not as an isolated corporate failure, but as a warning about systemic weakness. Database security must be elevated to a core policy domain — with its own legislation, oversight and professional standards. Only then can Korea claim to be serious about data sovereignty, digital trust and the foundations of an AI-driven economy. About the author ▷Professor, KAIST Graduate School of Management ▷Ph.D. in computer science, University of Illinois Urbana-Champaign ▷Asia representative director, European IT Society ▷Goodwill ambassador, Korean Red Cross ▷Professor of computer science at KAIST, the University of Cambridge and the University of Edinburgh * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2026-01-02 07:30:18