AJU PRESS ASIA FIRST NEWS AGENCY

Journalist

&
""
Latest by
  • Japanese Households and Businesses Accelerate Shift from Yen to Foreign Currency
    Japanese Households and Businesses Accelerate Shift from Yen to Foreign Currency Amid chronic yen depreciation, Japanese households and businesses are increasingly diversifying their yen assets into foreign currencies due to concerns that the yen's value may decline further. The increase in foreign currency deposits from April to June this year marked the largest since the full liberalization of foreign currency deposits in 1998.According to the Nihon Keizai Shimbun (Nikkei) on August 21, the average balance of foreign currency deposits at domestic banks in Japan for the April to June period was approximately 26.1 trillion yen, an 18% increase from the same period last year. Even excluding the impact of the strong dollar, the inflow was significant. The increase of 3.9772 trillion yen exceeds Japan's trade deficit for the fiscal year 2025, which is projected at 1.7 trillion yen. The government and the Bank of Japan intervened in the market to purchase yen on seven occasions from 2022 to 2024, averaging 3.5 trillion yen per day. In terms of the increase in foreign currency deposits alone, this amount surpasses the average daily yen purchase intervention by authorities.Individuals' foreign currency deposits reached approximately 6.7 trillion yen, an 8% increase. Sony Bank reported that its foreign currency deposit balance reached 800 billion yen in May, surpassing 700 billion yen for the first time in 15 months since February 2025. While foreign currency trading has traditionally been dominated by low-cost FX margin trading, Nikkei noted that the investor base is expanding, particularly among older individuals with surplus retirement funds. Funds are flowing not only into foreign currency deposits but also into overseas stocks. According to the Bank of Japan, the balance of household investments in foreign securities was 46.4618 trillion yen at the end of March, a 23% increase over the past year.Nikkei highlighted that despite the yen already being at a historically low level, the demand for foreign currency continues. In the past, Japanese individual investors often engaged in 'buying on dips' when the yen appreciated, purchasing foreign currencies like the dollar at relatively lower prices. However, the current trend is different. Investors are buying foreign currencies at high prices without waiting for a rebound in the yen. Nikkei assessed that the expectation of further declines in the yen's value is driving this demand for foreign currency. The currencies being purchased are also diversifying beyond just the dollar. Urata Takafumi, a senior economist at SMBC Trust Bank, noted, "Since the Trump administration, there has been an increase in depositors diversifying into various currencies, including the euro."Businesses are also increasing their foreign currency holdings, anticipating continued yen depreciation. From April to June, corporate foreign currency deposits rose to approximately 19.3 trillion yen, a 22% increase from the previous year. Ueno Tsuyoshi, a senior economist at the NLI Research Institute, told Nikkei, "The deep-rooted expectation that the yen will weaken further is causing export companies to delay converting the dollars they earn into yen." He also noted that companies considering overseas expansion are securing the necessary dollars in advance. Japanese firms are also increasing the issuance of foreign currency-denominated corporate bonds.The yen's value fell to as low as 163 yen per dollar in July, the lowest level in 39 years. Although the government and the Bank of Japan intervened to purchase yen at the end of July, the value remains significantly below the pre-2011 peak of around 75 yen per dollar following the Great East Japan Earthquake. Despite the short-term interest rate swap market reflecting an 80% probability of a rate hike by the Bank of Japan in September, yen purchases have not gained traction. This is due to the structural supply and demand dynamics where households and businesses are buying foreign currency, which in turn puts pressure on the yen. The cycle of yen depreciation concerns leading to foreign currency purchases, which then further fuels yen depreciation, poses a challenge. The issue is that the consequences of this cycle do not remain confined to the financial markets.On August 20, the Japanese Ministry of Finance announced that imports in July totaled 12.1462 trillion yen, a 27.8% increase from the same month last year, marking a record high for the second consecutive month. Notably, oil imports surged to 1.4089 trillion yen, an 87.8% increase. While the import volume increased by only 5.5%, the yen-denominated price of oil rose by 78.0%. This increase is attributed to rising oil prices due to instability in the Middle East, compounded by yen depreciation.The increased import costs from yen depreciation and rising oil prices indicate that Japan's income is flowing out to foreign markets. The Japanese government is continuing electricity and gas price subsidies from July to September, but once these subsidies end, rising energy prices could translate into inflationary pressures.* This article has been translated by AI. 2026-08-21 13:32:00
  • KOSPI Rises 0.4% Despite Foreign and Institutional Selling; KOSDAQ Plummets Over 4%
    KOSPI Rises 0.4% Despite Foreign and Institutional Selling; KOSDAQ Plummets Over 4% The KOSPI index reversed its early losses to rise 0.4% on August 21, despite selling pressure from foreign and institutional investors. Following a more than 5% surge the previous day, profit-taking and concerns over rising U.S. long-term interest rates weighed on the market. However, strong performances from major semiconductor stocks like Samsung Electronics and SK Hynix, along with financial shares, helped lift the index.As of 1:21 p.m. KST, the KOSPI was trading at 6,884.31, up 31.73 points (0.46%) from the previous trading day.The index opened at 6,759.95, down 92.63 points (1.35%), but managed to reduce its losses and turn positive during the session.In the securities market, individual investors sold a net 472.6 billion won, while foreign and institutional investors sold 72.1 billion won and 273.1 billion won, respectively. Following the previous day's surge, profit-taking by individuals continued to exert downward pressure.Nonetheless, the gains in major semiconductor stocks and financial shares were instrumental in the KOSPI's recovery. Among the top market capitalization stocks, Samsung Electronics rose 2.95%, SK Hynix increased by 3.02%, Hyundai Motor gained 0.24%, Samsung C&T climbed 4.55%, Samsung Life surged 6.40%, and KB Financial rose 1.88%. In contrast, SK Square fell 0.36%, Samsung Electro-Mechanics dropped 5.59%, LG Energy Solution declined 3.07%, Samsung Biologics decreased 1.65%, and Hanwha Aerospace plummeted 7.28%.Samsung Electronics and SK Hynix benefited from improved investor sentiment in the semiconductor sector following Micron's announcement of a significant investment in artificial intelligence. However, some tech stocks, including Samsung Electro-Mechanics, faced declines due to weakened investor sentiment for growth stocks amid rising U.S. long-term interest rates and profit-taking after the previous day's gains.At the same time, the KOSDAQ index was trading at 801.43, down 39.46 points (4.69%) from the previous day. The KOSDAQ opened at 824.05, down 16.84 points (2.00%), and continued to widen its losses.In the KOSDAQ market, individual investors were net buyers, purchasing 638 billion won, while foreign and institutional investors sold 347.7 billion won and 292.2 billion won, respectively.Among the top market capitalization stocks, most were in decline, including Alteogen (-6.33%), EcoPro (-6.13%), EcoPro BM (-7.36%), Rainbow Robotics (-3.39%), JUSUNG Engineering (-6.09%), HLB (-2.63%), Wonik IPS (-7.46%), Rino Technology (-6.19%), EoTechnics (-3.73%), and Peptron (-2.96%).* This article has been translated by AI. 2026-08-21 13:28:20
  • Megazone Cloud Builds AX System for Nongshim Group
    Megazone Cloud Builds AX System for Nongshim Group Megazone Cloud announced that its affiliate, Megazone Soft, has established an AX (AI Transformation) system based on Google Workspace (GWS) for the Nongshim Group.The two companies held a GWS launch ceremony at Nongshim's headquarters on the 20th. Key attendees included Nongshim CEO Cho Yong-cheol, Megazone Cloud CEO Yeom Dong-hoon, and Shannon Tong, head of Google Workspace sales for North Asia.Nongshim Group plans to enhance communication and collaboration across geographical and organizational boundaries using the smart collaboration platform GWS, aiming to boost productivity and innovate work processes.Megazone Soft has completed the GWS system implementation for Nongshim Group's 14 domestic subsidiaries and 7 overseas entities. This project includes the migration of existing data to Google Drive, integration of legacy systems and third-party solutions with GWS, and a large-scale AI transformation initiative that redefines work processes across the group.Through this project, Megazone Soft focused on delivering three core values to Nongshim Group: 'real-time collaboration' that simplifies reporting through simultaneous editing and instant feedback, 'assetization of information' that systematically accumulates group knowledge and enhances search efficiency through cloud-based document management, and the elimination of spatial and temporal constraints on work.Additionally, the migration of approximately 26 million documents from Nongshim Group's existing centralized document server to Google Drive has been completed. The integration of Google Gemini across various business areas, including marketing, sales, supply chain, operations, HR, and R&D, has also laid the groundwork for maximizing productivity and profitability through AI.Megazone Soft has established a governance system optimized for global enterprises by implementing a 'single tenant (dedicated infrastructure) and multi-domain (independent data storage for subsidiaries)' architecture. This allows Nongshim Group companies to communicate and collaborate seamlessly within a single GWS tenant while maintaining independent operations regarding data access and security through their respective domains. New subsidiaries can be established, and mergers and acquisitions can be integrated into the same work environment within 24 hours without the need for separate infrastructure.Megazone Soft also provided change management consulting and training to support AI-based work innovation. Customized training programs were designed considering job levels, roles, and languages to effectively disseminate changes across the large organization, incorporating AI systems into real work scenarios.Jin Geon, CEO of Megazone Soft, stated, "We will continue to support Nongshim Group not only in successfully transitioning to an AI-native company but also in maximizing efficiency and productivity by continuously experiencing new AI technologies."Recently, Megazone Soft has expanded its Google Workspace implementation business into an enterprise AX initiative utilizing generative AI. In April, it signed a strategic partnership agreement with Google Cloud, identifying AI, data, security, and Google Workspace as four key areas of collaboration. The two companies plan to jointly explore industry-specific AX cases that combine Google’s generative AI Gemini and cloud services tailored to individual business environments. In June, Megazone Soft also unveiled governance strategies for applying Gemini-based AI agents in real work scenarios to corporate executives, further broadening its business scope from simple collaboration tool implementation to AI-driven work innovation.The company explained, "As a Google Premier Partner, we have established a dedicated GWS operation team and provide various services based on GWS and integrated technical services for GCP (Google Cloud Platform), particularly excelling in enterprise GWS implementation projects among domestic Google partners."* This article has been translated by AI. 2026-08-21 13:12:00
  • Seongnam Mayor Shin Sang-jin: Japans Advanced Care Models Will Inform Future Policies
    Seongnam Mayor Shin Sang-jin: Japan's Advanced Care Models Will Inform Future Policies Shin Sang-jin, the mayor of Seongnam, expressed on August 21 that “visiting Japan to observe advanced care practices in healthcare and nursing will provide meaningful insights for future policy design.” The mayor announced that he will visit Nagoya from August 23 to 25 to explore advanced cases for responding to an aging society and to expand cooperation with the city of Nagoya. The main goal of this visit is to refine the policy direction of the 'Seongnam-style Home End-of-Life Care' initiative that Mayor Shin is promoting. On August 24, Mayor Shin and his delegation plan to visit home healthcare institutions and long-term care facilities in Nagoya to examine the medical, nursing, and care linkage systems that support elderly individuals in continuing to live in their communities. In particular, the mayor aims to focus on Japan's community-based care system and explore how to apply successful cases observed on-site to Seongnam's community care policies. Citizens have voiced their support for this initiative, stating, “It is important to implement policies that allow the elderly to live healthily and with dignity in familiar homes and communities rather than in hospitals or facilities. We hope that Japan's examples can be effectively adapted to Seongnam's realities to create tangible benefits for citizens.” On August 25, Mayor Shin will meet with Ichiro Hirokawa, the mayor of Nagoya, to discuss policies addressing the aging society and ways to enhance industrial and economic exchanges between the two cities. Following this, he will visit the Vantelin Dome Nagoya, home of the Chunichi Dragons, to benchmark facility operations and management practices for the baseball stadium being developed in Seongnam. Additionally, the delegation plans to visit the United Nations Centre for Regional Development (UNCRD) based in Nagoya to discuss key agendas and programs for the 17th Asia High-Level Forum on Sustainable Transport (EST) scheduled to be held in Seongnam in 2027, as well as participation from overseas cities and experts. Mayor Shin Sang-jin emphasized, “We will adapt successful cases to Seongnam's conditions to establish a care system that allows citizens to enjoy healthy and dignified aging in their communities.” He added, “We will also strengthen our cooperation with Nagoya to ensure the successful advancement of key issues in Seongnam, including the construction of the baseball stadium and the sustainable transport forum.” This visit to Nagoya is expected to serve as an opportunity to examine Seongnam's key issues, from care policies for an aging society to urban exchanges and sports and transportation sectors, and to seek solutions for future policies. 2026-08-21 13:12:00
  • Kim Yong-pil to Launch U.S. Career with NOM.NOM.NOM SHOW After Concert in Busan
    Kim Yong-pil to Launch U.S. Career with 'NOM.NOM.NOM SHOW' After Concert in Busan 가수 김용필이 활기 넘치는 9월을 예고했다. 오는 12~13일 부산 단독콘서트를 마치자마자 미국으로 출국, 25~26일 로스앤젤레스에서 열리는 ‘놈놈놈 쇼(NOM.NOM.NOM SHOW)’ 무대에 선다.먼저 김용필은 9월 12일과 13일 오후 4시 부산 소향씨어터 우리은행홀에서 ‘2026 김용필 콘서트 뷰티풀 라이프 - 부산’을 개최한다. 지난 4월 서울 이화여대 삼성홀에서 열린 첫 단독콘서트에서 시도한 국내 최초의 뮤직드라마 형식의 콘서트가 호평을 얻은 결과다.당시 김용필은 장기 공연 중인 연극 ‘뷰티풀 라이프’를 음악 무대에 접목시켜 새로운 형식의 콘서트를 선보였다. 발로 뛰어 연극 관계자들을 만나고 직접 콘서트 전체를 기획, 실행하면서 공연 프로듀서로서의 면모를 인정받았다.앞서 2023년 3월에 종료한 TV조선 ‘미스터 트롯2’에서 김용필은 선배 가수 최백호의 노래 ‘낭만에 대하여’를 자신만의 해석으로 불러 주목받았다. 팬들의 뜨거운 성원 속에 본업을 아나운서에서 가수로 바꾼 김용필은 3년간 소속 가수로서 다양한 예능에서 활약했고, 이후 홀로서기에 나섰다.새로운 소속사에 둥지를 틀기 전, 늦깎이 가수인 만큼 아티스트로서의 역량을 탄탄히 다지고자 김용필은 알찬 시간을 보냈다. 한 곡 한 곡 작사, 작곡가를 찾아다니며 완성한 1집 정규 앨범 ‘사계’를 발매했고, 인생의 사계절을 담은 노래들을 잘 담아낼 첫 번째 단독콘서트를 고심하다가 연극과의 콜라보레이션을 구상해 무대를 완성했다.이러한 가수 김용필의 ‘음악에 진심’이 서울 공연 이후 5개월 만에 다시 부산에서의 첫 번째 앵콜쇼로 이어진 것이다. 김용필은 ‘러브콜’에 대한 보답으로 ‘포도밭에서’ ‘귀소본능’ ‘나와 같이 늙어가 주오’ 등 자신의 대표곡에 더해 부산을 주제로 한 다양한 레퍼토리를 준비했다. 호소력 짙은 감성 가창력으로 관객들에게 진한 감동을 선사했던 지난 서울 공연에서 김용필의 코믹 연기력과 일취월장 성장한 댄스 무대 역시 화제가 됐던 만큼 부산 관객들의 반응에도 귀추가 주목된다.‘낭만에 대하여’에 이어 자신의 노래 ‘낭만연가’까지 팬들의 큰 사랑을 받으며 ‘낭만가객’이라는 수식어를 갖게 된 김용필은 9월 말 미국 공연에 ‘젠틀한 놈’으로 초청됐다. 호랑이 심사위원이자 실력파 프로듀서인 박선주가 총괄 기획한 ‘놈놈놈쇼’에는 ‘낭만 있게 젠틀한 놈’ 김용필 외에 ‘멋지고 잘생긴 놈’ 장민호, ‘뭐든지 잘하는 놈’ 천록담, ‘뛰는 놈 위에 나는 놈’ 나태주가 함께한다.현지 시간으로 9월 25일과 26일 로스앤젤레스 공연장에서 열리는 ‘놈놈놈쇼’에 대한 미국 현지의 관심도 뜨겁다. K-트롯을 대표하는 4명의 스타가 미국에서 공연한다는 소식이 지난 13일 뉴욕 한복판 타임스퀘어 대형 전광판에 등장했다. 한국의 대표적 대중음악 장르인 트로트가 세계적 문화·관광의 중심지인 뉴욕에서 소개됐고, 김용필 장민호 천록담 나태주의 빛나는 얼굴이 대문짝만한 영상으로 상영됐다. K-트롯 장르의 글로벌 확장 가능성을 보여주는 상징적 시도다.미국에서 펼쳐질 프리미엄 디너쇼 ‘놈놈놈쇼’는 9월 한가위 LA 축제의 일환으로 총 3회 진행된다. 현지 공연 관계자는 “벌써 현지 교민뿐 아니라 K-컬처에 관심이 많은 글로벌 팬들 사이에서 화제가 되고 있다”면서 “이번 ‘놈놈놈쇼’는 단순한 콘서트가 아니라 라이브 K-트롯 퍼포먼스와 파인 다이닝, 럭셔리한 분위기가 완벽하게 조화된 공연으로 기획됐다”고 설명했다.이어 “주로 카지노 중심으로 이뤄지던 한국 가수 공연의 기존 흐름을 넘어, 5성급 호텔 그랜드볼룸에서 품격 높은 디너쇼 문화를 새롭게 제시하고자 한다. 다양한 세대가 함께 즐길 수 있는 프리미엄 사교·문화 플랫폼으로 자리 잡을 것”이라고 전망했다.미국을 시작으로 K-트롯의 매력을 알릴 4명의 ‘트롯 전도사’들은 화보 같은 포스터도 공개했다. 1970년대 뉴욕을 배경으로 한 뮤지컬 같은 분위기 속에서 명품 턱시도를 착장한 채 4인 4색의 매력을 발산했다. 촬영은 유네스코 지정 작가 지영빈 감독이 맡아 예술적 완성도를 높였다.버라이어티 지를 비롯해 현지 언론에 ‘낭만 있게 젠틀한 놈’이자 ‘훤칠하고 매력적인 놈’으로 소개된 김용필은 “이번 공연은 단순한 무대가 아니라, 트롯의 본질인 ‘한(恨)’과 ‘흥(興)’을 미국 프리미엄 관객들과 함께 나누는 자리입니다. 최고의 보이스와 퍼포먼스로 LA의 밤을 뜨겁게 달구겠습니다. 함께 웃고, 울고, 흥을 즐기셨으면 좋겠습니다”라고 포부를 밝혔다.다양한 장르의 노래를 소화하기로 정평이 난 김용필은 트로트 곡뿐만 아니라 현지 팬들을 위해 팝송과 재즈, 라틴 음악까지 맹연습 중이다.방송기자로 시작해 리포터, 아나운서까지 20년 방송인 활동에도 감춰지지 않았던 가수 김용필만의 젠틀한 흥과 감성적 끼가 부산에 이어 미국 LA까지 뒤흔들 9월이 다가오고 있다. 2026-08-21 12:44:00
  • Heerim and Geogwang Collaborate on Modular Construction Market
    Heerim and Geogwang Collaborate on Modular Construction Market Heerim Architecture and Geogwang Corporation are launching an integrated modular construction project that encompasses design, production, and quality control.On August 21, Heerim announced that it has signed a memorandum of understanding (MOU) with Geogwang to jointly pursue high-quality modular construction projects. The two companies plan to combine their core competencies to create a business model that connects product planning, design, production, and quality management in a cohesive manner.Under the agreement, Heerim will provide architectural planning, design, and quality management capabilities, while Geogwang will contribute its modular production technology and manufacturing infrastructure. The companies intend to establish a new corporation to pursue joint projects after further discussions on specific business conditions and internal reviews. Details regarding investment structure, management methods, and role distribution will be determined through separate negotiations.Heerim previously completed the 'Villa Mino' modular resort in Yangyang in February 2025 and has since expanded its modular business by securing a design project for modular housing in Hawaii. This collaboration aims to enhance business competitiveness by linking existing architectural planning and design capabilities to the production phase.Geogwang, which started as a window manufacturing company in 1984, has expanded its business scope to include eco-friendly construction products and services, such as building-integrated photovoltaics (BIPV) and modular buildings. In 2022, it launched the 'G-Modular' brand and obtained recognition for industrialized housing in 2026, qualifying it to supply residential modular units.Modular construction involves manufacturing key structural components and finishing materials in a factory before assembling them on-site. This method reduces on-site work, shortens construction time, and minimizes risks of accidents, labor shortages, construction waste, and environmental impact.The domestic modular market has primarily grown around public construction projects, such as schools and military facilities. The two companies plan to develop modular products that not only focus on economic viability and constructability but also emphasize product planning, design, quality, and completeness to expand into the private market.They aim to enhance the market competitiveness of modular construction by linking design and production from the initial product planning stage, considering both aesthetics and manufacturability.Meanwhile, Heerim was recently selected as the final winner in a competitive bidding process for the 'New Construction Design Competition for the Consulate General in Ho Chi Minh City,' despite the project budget being under 1 billion won.* This article has been translated by AI. 2026-08-21 12:24:00
  • Kakao Shares Plunge 11% Following Announcement of Corporate Split
    Kakao Shares Plunge 11% Following Announcement of Corporate Split Kakao's shares are experiencing a significant drop following news of its planned corporate split. Although existing shareholders will receive shares in both the newly established company and the parent company, investors appear to view the split as a potential burden on the company's value.As of 11:41 a.m. on the Korea Exchange, Kakao's stock was trading at 34,150 won, down 4,550 won (11.76%) from the previous trading day. The stock opened at 38,150 won and briefly fell to 33,600 won during the session.The sharp decline in stock price is attributed to deteriorating investor sentiment following the announcement of the corporate split.Earlier that day, Kakao's board of directors convened and resolved to split the company into Kakao AI (the new entity) and Kakao X (the parent company). The split will allocate shares of the new company to existing shareholders based on their ownership percentages.Kakao AI will focus on integrating AI, advertising, and commerce, centered around KakaoTalk, while Kakao X will encompass key subsidiaries in tech finance, content, and mobility, positioning itself as a 'future value investment company.'The split ratio was determined based on the net asset book value, with Kakao AI receiving 0.36 and Kakao X receiving 0.64. Consequently, existing Kakao shareholders will receive shares in both companies according to this ratio.The company plans to hold an extraordinary general meeting on December 17 to finalize the split, which is set to be completed on January 1 of the following year. Following this, Kakao AI will aim for a relisting and Kakao X will pursue a change in listing on January 27.* This article has been translated by AI. 2026-08-21 12:12:00
  • Kim Min-seok Plans to Restore Party Diplomacy with Visits to US, China, and Japan
    Kim Min-seok Plans to Restore Party Diplomacy with Visits to US, China, and Japan Kim Min-seok, leader of the Democratic Party, announced plans on August 21 to restore party diplomacy, with intentions to visit the United States, China, and Japan by the end of the year. He emphasized the need to accelerate these efforts ahead of the U.S. midterm elections in November.During a Supreme Council meeting held at the Gangneung City Hall, Kim stated, "Given the complex changes in the Korean Peninsula's situation involving the U.S., China, and North Korea, it is time to strengthen the role of President Lee Jae-myung as a pacemaker."He added, "When I was Prime Minister, I visited the U.S. and China, meeting with President Donald Trump, Vice President JD Vance, and Chinese Premier Li Qiang."Kim highlighted that party diplomacy differs from government diplomacy as it includes dialogue with opposition parties. He reiterated his commitment to visiting the U.S., China, and Japan this year, as promised during the party convention, and announced the formation of a task force to advance these diplomatic efforts.* This article has been translated by AI. 2026-08-21 12:08:00
  • Minister Park Hong-keun: Education Budget for Early Childhood and K-12 Will Not Decrease
    Minister Park Hong-keun: Education Budget for Early Childhood and K-12 Will Not Decrease The government firmly denied that the education budget for kindergartens and primary and secondary schools will decrease, even with changes to the calculation method for local education funding. The aim is to resolve the instability caused by the previous system, which was mechanically linked to domestic tax revenues, leading to significant impacts on local education offices during revenue shortfalls. The government plans to ensure stable budget increases through national compensation provisions.During a joint briefing at the Government Seoul Building on the 21st, Minister of Planning and Budget Park Hong-keun addressed concerns that the reform of local education funding would shrink financial support for primary and secondary education, stating, "There is absolutely no way that the education budget for our children will decrease."Education Minister Yoo Kyung-jin also emphasized, "The first condition we agreed upon when starting discussions on the funding reform with the Ministry of Planning and Budget was to ensure that the budget for supporting primary and secondary students does not decrease or fall short of covering even inflation-adjusted labor costs, no matter what happens."The government pointed out that the previous system, which linked 20.79% of domestic tax revenues to education funding, actually exacerbated financial instability. Minister Park questioned, "How long must we maintain this instability, which forced education offices to bear enormous burdens due to deficits in 2023 and 2024?" He explained that a comprehensive analysis over the past 40 years led to the creation of a new formula that guarantees no reduction in funding.He noted that the new formula adequately considers demands for artificial intelligence (AI) education, childcare needs, improvements to aging school facilities, and labor costs. The law will explicitly state that if the budget decreases compared to the previous year, the government will be responsible for covering the difference, establishing multiple safety measures.Minister Yoo added that, according to the new formula, the budget for primary and secondary education funding is expected to increase significantly from 2027 to 2030.The government also made it clear that the resources secured through the funding reform will not be diverted to other sectors but will be reinvested entirely within the education sector. Minister Park stated, "We intend to use the resources generated from the reform to evenly and balancedly invest in areas that have lacked funding, such as early childhood education, higher education, and lifelong learning. The goal of maintaining the 20.79% domestic tax revenue linkage is to ensure that we continue to invest in all areas of education and talent development without diverting funds elsewhere."* This article has been translated by AI. 2026-08-21 12:04:20
  • Government Restructures Education Funding Amid Semiconductor Boom
    Government Restructures Education Funding Amid Semiconductor Boom The government is establishing a 'Future Response Fund' based on additional tax revenue from the semiconductor boom and is significantly overhauling the local education financial grant system. While this may appear to signal a reduction in primary and secondary education budgets, a closer look reveals that the Ministry of Education has strategically safeguarded its interests.Through the revised funding formula, all differences arising from the changes will be allocated to a new 'Education and Talent Account' within the fund, securing investment for early childhood, higher education, and lifelong learning, thereby maintaining the total national education investment while broadening the scope to 'education throughout life.'On August 21, the government held the 'First Financial Operation Strategy Council' at the Government Seoul Building, where it finalized the plans for the Future Response Fund and the grant reform. The most significant change in the grant calculation method will shift from the previous '20.79% of domestic tax' linkage to a new formula: 'previous year's grant × three-year average growth rate × (three-year average change in school-age population × 0.35).'Initially, financial authorities aimed to reflect a decline in the school-age population of over 40% and completely abolish the domestic tax linkage. However, the Ministry of Education strongly emphasized the inflexibility of personnel costs, which account for over 60% of local education expenditures, successfully reducing the reflection rate to 35%.Additionally, a 'grant preservation clause' will be codified in the Local Education Financial Grants Act to ensure that if the total grant amount decreases compared to the previous year due to economic downturns, the difference will be fully compensated. This measure provides a robust safeguard against the anticipated 'budget drop' and 'reduction in personnel-related project costs' that local education offices were most concerned about.One of the most notable aspects is the establishment of the 'Education and Talent Account' within the Future Response Fund. The Ministry of Planning and Finance plans to separately allocate additional tax revenue from the semiconductor boom to invest in four key areas: youth, growth drivers, local development, and education and talent.In this process, the entire difference arising from the revised grant formula (the amount of domestic tax at 20.79% minus the grant calculated under the new formula) will be legally designated as income for the Education and Talent Account. Notably, transfers to other accounts will be strictly prohibited, ensuring that funds adjusted from the grants do not leak into industrial or general social overhead capital budgets.Ultimately, while the formula change may seem to alter the grants, it effectively maintains the overall education and talent investment at the level of '20.79% of domestic tax.'This measure allows the Ministry of Education to expand significant financial resources previously confined to primary and secondary education into areas such as early childhood education (integrated care), university innovation (transition to AX and strengthening research competitiveness), vocational and lifelong education, addressing long-standing financial challenges.University presidents and lifelong education advocates have consistently called for increased funding for higher and lifelong education, which has lagged behind the OECD average, but have often faced setbacks due to the rigid funding structure of primary and secondary grants. With this reform, the Ministry of Education has secured independent and stable resources to focus on national future challenges, including investment in early childhood education due to integration, nurturing outstanding talent in science and technology, enhancing regional university competitiveness, and promoting adult digital literacy and lifelong education.Regarding the grant reform, an education sector official stated, 'Rather than clinging to the absolute figure of 20.79% of domestic tax linkage, the decision to fully allocate equivalent resources to the Education and Talent Account to invest from early childhood to lifelong education is a pragmatic choice by the Ministry of Education.' He added, 'In the future legislative process, it is essential to actively incorporate the concerns of education superintendents and educational organizations to find a balance in addressing educational disparities and nurturing future talent.'* This article has been translated by AI. 2026-08-21 12:04:10