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  • South Korean Automakers Face Strikes Amidst Industry Restructuring
    South Korean Automakers Face Strikes Amidst Industry Restructuring South Korean automakers are undergoing significant restructuring due to a complex interplay of factors, including competition from Chinese electric vehicle (EV) manufacturers, sluggish domestic demand in emerging markets due to conflicts in the Middle East, and changes in employment structures driven by the adoption of artificial intelligence (AI) and software-defined vehicles (SDVs). This restructuring is viewed not merely as a cost-cutting measure but as a survival strategy through the reorganization of existing business structures.On July 13, a representative from a global automaker stated, "The shrinking presence of major global automakers like Volkswagen and GM in the Chinese market, which was once a cash cow, has prompted these restructuring efforts. The slowdown in sales in emerging markets, the absence of alternative markets, tariff challenges, and the collapse of global supply chains have all acted as catalysts for change."Indeed, Volkswagen Group, a symbol of German manufacturing, is facing a restructuring that involves cutting 15% of its workforce due to poor performance in China. Volkswagen's sales in China dropped from 4.2 million units in 2018 to an estimated 2.92 million in 2024, and further declined to 2.69 million last year. Sales in the first quarter of this year are estimated to have plummeted by 36% year-on-year to 425,000 units.Honda has also struggled to adapt to the shift toward electrification, losing market leadership. The company, which entered the electrification race later than Tesla and local Chinese brands, invested heavily to regain its footing but faced challenges such as a temporary demand stagnation for electric vehicles, U.S. tariffs, and a global sales slowdown. Policy confusion surrounding its traditional internal combustion engine vehicles further complicated its position.Long-term stagnation in the North American market has led to the cancellation of several electric vehicle projects, including the "Honda 0 SUV," "Honda 0 Saloon," and "Acura RSX." Plans for a large battery factory in Canada have also been scrapped. Additionally, the decision to withdraw from the South Korean market was made amid the global supply chain restructuring. A Honda representative stated, "We will end our automobile sales operations in South Korea by the end of 2026, maintaining only our motorcycle business, as part of a global decision to strengthen our long-term competitiveness."While automakers globally are restructuring, the atmosphere in South Korea is markedly different. The Hyundai Motor Company union has initiated partial strikes starting today, demanding a monthly wage increase of 149,600 won (excluding seniority raises), a 30% performance bonus based on last year's net profit, a 4.5-day workweek, reinstatement of members dismissed for illegal activities, and an extension of the retirement age. Industry insiders are concerned that the union's actions could be recorded as a case of declining competitiveness amid the transition to AI and SDVs.Labor disputes are also intensifying at Korea GM and Renault Korea. The Korea GM union is demanding a monthly wage increase of 149,600 won, a performance bonus of approximately 30 million won, allocation of new models to domestic plants, and mandatory prior consultation with the union in cases of mergers or outsourcing. The Renault Korea union has declared a breakdown in negotiations after 12 rounds of talks since starting negotiations in April.The issue is that there have been few tangible results from strikes following the breakdown of negotiations. After extreme labor disputes, Korea GM relocated the production base for the "Cruze," which was manufactured for export to Europe, from its Gunsan plant to Mexico. Renault, which conducted 60 strikes in 2018-2019, managed to secure its demands in negotiations but saw the cancellation of new allocations for the "Nissan Rogue" produced for export to North America the following year. Hyundai, which has faced severe labor disputes annually, has diversified its supply chain to countries like China, India, and the U.S. since the 2010s. A global automaker representative expressed concern, stating, "In the face of global layoffs, strikes in South Korea could lead to reduced production volumes."* This article has been translated by AI. 2026-07-13 18:08:00
  • Korean Auto Industry Faces $200 Million Loss Amid Ongoing Strikes
    Korean Auto Industry Faces $200 Million Loss Amid Ongoing Strikes The ongoing strikes in the automotive industry are raising concerns about significant losses for parts suppliers. As factories halt production, first to third-tier suppliers must adjust their delivery schedules, leading to immediate impacts on revenue and cash flow for smaller firms lacking financial resilience. With the transition to electrification already straining their foundational strength, the added risk of strikes poses a serious challenge.According to industry sources, the recent strikes by automakers have heightened tensions within the parts sector. On July 13, the Hyundai Motor Company union began partial strikes, halting production for up to four hours a day, while the Korean GM union refused overtime and weekend work.Hyundai's partial strikes are expected to stop production lines for a total of 12 hours over three days, with day and night shifts leaving work two hours early until July 15. The anticipated production shortfall is around 5,000 vehicles, which, at an average revenue of approximately 42.65 million won per vehicle, could result in losses exceeding 200 billion won.Suppliers are also facing inevitable cascading losses. When assembly plants cease operations, the delivery volumes to suppliers are immediately adjusted, affecting not only first-tier suppliers but also second and third-tier companies.Given the nature of the automotive industry, where many suppliers are interconnected, the impact of strikes can be substantial. As of the end of last year, Hyundai had 1,494 first-tier suppliers, with 347 located domestically. When production plans change, orders naturally decrease for both first and lower-tier suppliers.The parts industry has been under pressure for years due to the transition to electrification and a decline in new vehicle projects. While demand for components related to internal combustion engines, such as engines and transmissions, is decreasing, investment in electric vehicle parts is increasing. Additionally, competition from low-cost Chinese parts is further weakening the industry.Suppliers that rely heavily on specific automakers face greater burdens. Delays in new vehicle development and securing production volumes can lead to lost opportunities for new orders. Korean GM has not received new vehicle development projects since the launch of the Chevrolet Trailblazer in 2020, limiting its role to an export production base.This has made growth difficult for parts suppliers. Earlier this year, GM Technical Center Korea (GMTCK), the research and development arm of Korean GM, was reported to be working on new vehicle development, but details regarding specific models, domestic launch plans, and mass production schedules have not been disclosed. As delays in new vehicle development and securing production volumes continue, first-tier suppliers and other parts manufacturers are increasingly concerned.Small parts suppliers may find themselves facing existential threats. Reduced deliveries and production disruptions directly lead to revenue shortfalls, cash flow issues, and inventory burdens, which many cannot afford. Diversifying clients is challenging, and even as parts demand decreases, fixed costs such as inventory storage, logistics, and labor remain.The key issue is whether the strikes will be prolonged. Short-term or partial strikes may allow for recovery of parts demand through overtime or weekend work, but if the strikes extend, the shock to the parts industry could snowball.Lee Taek-sung, director of the Korea Automotive Industry Cooperative, stated, "In a situation where many difficulties and challenges are piling up both domestically and internationally, I hope that everyone can come together with wisdom and unity to negotiate amicably to avoid imposing a significant burden or impact on the automotive industry and related parts suppliers."* This article has been translated by AI. 2026-07-13 18:08:00
  • SK Hynix Accelerates Recruitment of AI Semiconductor Talent Following Nasdaq Listing
    SK Hynix Accelerates Recruitment of AI Semiconductor Talent Following Nasdaq Listing SK Hynix is launching a comprehensive recruitment process to enhance its artificial intelligence (AI) semiconductor technology following its listing on the Nasdaq. The company aims to attract top talent by offering competitive compensation packages comparable to those of major tech firms like Nvidia, AMD, and Intel.According to industry sources on July 13, SK Hynix has begun restructuring its hiring system through its U.S. subsidiary, SK Hynix America, to recruit global talent. The company plans to offer stock options and performance-based restricted stock units (RSUs) as key incentives to attract skilled engineers from Silicon Valley.SK Group Chairman Chey Tae-won expressed his commitment to talent acquisition shortly after the listing on July 10, stating, "Compensation based on Nasdaq-listed stock will be the most intuitive and powerful incentive for global tech talent."Ahead of the planned launch of its advanced packaging production facility in Indiana by 2028, SK Hynix is prioritizing the establishment of a skilled workforce. The company is focusing on recruiting experts in next-generation high-bandwidth memory (HBM) design and AI-based manufacturing systems to internalize core technologies before mass production. These experts will collaborate closely with domestic research and development (R&D) teams to drive global technological synergy.In addition to individual hiring, SK Hynix may also employ an "acquihire" strategy, absorbing entire research teams from local tech companies. This proven method allows the company to secure both essential technologies and key personnel from Silicon Valley firms.Analysts suggest that SK Hynix's listing has provided a financial and institutional foundation for pursuing significant deals. Domestic semiconductor companies have faced challenges in attracting top talent in the U.S. due to liquidity constraints on stock-based compensation. Local talent often finds KOSPI-listed stocks less attractive due to tax implications and accessibility. In contrast, SK Hynix's Nasdaq listing enables immediate stock-based compensation in dollars, leveling the playing field with local big tech firms in the talent acquisition process.To solidify its "AI triad alliance" with Nvidia and TSMC, SK Hynix is expected to focus on recruiting logic semiconductor design engineers and advanced packaging specialists with master's and doctoral degrees, which are essential for customized memory design beyond the sixth generation of HBM (HBM4). Recently, Nvidia has rapidly absorbed key design personnel through high stock incentives linked to its rising stock price, while TSMC has significantly increased base salaries and expanded performance-based stock compensation for global engineers.An industry insider noted, "Korean companies have often missed out on key talent despite having the necessary technology because they couldn't meet the unique compensation standards of Silicon Valley. With the advantage of Nasdaq-listed stock, SK Hynix is poised to change the rules of the game in the talent acquisition competition against big tech."* This article has been translated by AI. 2026-07-13 18:08:00
  • The Electric Industrys Transformation: A Call for Unity
    The Electric Industry's Transformation: A Call for Unity On June 29, the government announced the "Three Major Megaprojects for South Korea's Great Leap Forward," focusing on semiconductors, physical AI, and AI data centers. Notably, the scale of investment from semiconductor companies, amounting to trillions of won, was not the only point of interest. Electricity was also highlighted as a crucial element necessary to drive this massive initiative. Whether for semiconductor fabs or AI data centers, the amount of power required is equivalent to that generated by dozens of nuclear power plants. Regardless of how grand the investment plans are, without a stable and timely supply of electricity, they will remain mere blueprints. The government has prioritized the expansion of power infrastructure as a key support task alongside the announcement of these megaprojects.The surge in electricity demand is not limited to megaprojects. The electrification of various industries is causing national power demand to grow at an unprecedented rate. The government has stated its intention to achieve 100 GW of renewable energy by 2030, utilize nuclear power and small modular reactors (SMRs), expand energy storage systems (ESS), and proactively establish power grids.The direction towards decarbonization and local consumption of electricity is correct. However, having the right direction does not guarantee automatic execution. The electric industry still faces numerous challenges, including ensuring the stability of energy supply, building large-scale transmission networks, and training skilled personnel to meet the rapidly increasing power demand.Electricity has transitioned from being merely an infrastructure supporting industries to a core asset that influences national competitiveness and economic growth. The electric industry refers to this era as "eleconomy," where electricity and economy are intertwined. This is the reality we face today.In such times, a platform that allows the entire electric industry to speak with one voice is essential, as is a focal point that can bridge the gap between policy and practice. Even if the government proposes policy directions, the effectiveness of these policies will diminish if the voices from the industry are not gathered in a timely manner. Companies seek systems that can reduce investment uncertainties, while power generation companies and equipment and construction sectors need applicable standards and support systems. Academia and research institutions must prepare for future technologies, and the government should consider the overall power supply and industrial competitiveness of the nation. The electric industry operates through the interplay of various stakeholders' interests and roles. Merely voicing individual opinions will make it difficult to keep pace with the speed of transformation. Thus, a central axis that can consolidate industry opinions, gather field challenges, and connect them to policy is necessary.The establishment of the Korea Electric Industry Association is a response to this urgent need. The association, which has a 60-year history, has restructured itself based on the newly enacted "Basic Law for Electric Industry Development" and launched with a significantly revamped system and role in April 2026. This is not just a name change; it is a reorganization to serve as the representative platform for the electric industry in line with the changing times.The role of the association is clear. It aims to unify the voices of the industry, which were previously scattered across various sectors such as power generation, transmission and distribution, electrical equipment, and construction, and propose them as policy tasks to the government, while also supporting system improvements and the discovery of support projects. The foundational work of the Korea Electric Association, including the operation of electrical equipment technical standards and power industry technical standards (KEPIC), policy research, and professional workforce training, will continue.Furthermore, the association will strengthen its role as a communication platform where companies, power generation firms, academia, and research institutions can discuss the future together, acting as a bridge between the government and the industry. This will create a virtuous cycle where policy directions are accurately conveyed to the field, and the realities of the field are reflected in policies. This is the vision that our electric industry aims to realize.South Korea currently stands at the center of international competition over AI supremacy. The three major megaprojects reaffirm that the practical foundation of this competition ultimately lies in electricity. If timely electricity supply is a prerequisite for the nation's leap forward, then the electric industry must steadfastly fulfill its role as the starting point.As the importance of the industry grows, so too does the weight of the collaborative systems and policy platforms that support it. What is needed now is an environment where the entire electric industry can look in the same direction and grow together, beyond the competitiveness of individual companies and sectors. The Korea Electric Industry Association will take responsibility as the focal point and coordinator of the industry in this historic task. We will steadfastly maintain our position alongside the field and the public, ensuring that electricity can illuminate the future of South Korea.* This article has been translated by AI. 2026-07-13 18:04:00
  • Surge in Transformer Demand as AI Data Centers Expand
    Surge in Transformer Demand as AI Data Centers Expand The competition in artificial intelligence (AI) is shifting from semiconductors to power infrastructure. As AI data centers grow to gigawatt (GW) scale, the speed at which companies can secure transformers and switchgear is becoming a critical factor in business operations, surpassing the need for GPU acquisition.According to the power equipment and semiconductor industries, major global tech companies are prioritizing the procurement of high-voltage transformers and power distribution equipment alongside GPUs and servers for their AI data center projects. Since AI data centers consume significantly more power than traditional data centers, delays in establishing power infrastructure could postpone the completion of these facilities.Microsoft, Amazon Web Services (AWS), Meta, and Google are expanding their investments in AI data centers across the United States, focusing on securing long-term power purchase agreements (PPAs) and early delivery schedules for transformers. The 'Stargate' project, led by OpenAI and SoftBank, also emphasizes the importance of securing power infrastructure alongside data center construction.Industry analysts suggest that the bottleneck in the AI data center supply chain is shifting from GPUs to power equipment. While GPU supply, primarily from Nvidia, is gradually increasing, the production capacity for transformers and high-voltage switchgear is difficult to ramp up quickly, often resulting in delivery times extending to several years.For instance, reports indicate that delivery times for high-voltage transformers in the U.S. power industry have stretched to 2 to 4 years. The International Energy Agency (IEA) has warned that without concurrent investments in power infrastructure like transmission networks and transformers, the growth of the AI industry could be constrained due to the surge in data center power consumption.The scale of AI data centers is also rapidly increasing. Nvidia projected at this year's GTC that future AI factories will exceed 1 GW in power usage. This marks a significant shift from the past, where data centers operated at several megawatts, now consuming power equivalent to that of an entire city.This transformation presents new opportunities for domestic power equipment manufacturers. LS Electric is expanding its supply of high-voltage distribution equipment and power management solutions for data centers, while HD Hyundai Electric and Hyosung Heavy Industries are seeing a significant increase in transformer orders, particularly in North America. Analysts predict that if investments in AI data centers continue to grow, the surge in orders for power equipment manufacturers will also persist for an extended period.The government's initiative to establish a national AI computing center and private AI data center projects also highlight the critical need for securing power infrastructure. Industry experts believe that the competition to attract AI data centers will ultimately hinge on how quickly transmission networks and substations can be developed.As interest in the AI industry shifts from GPU performance to the construction of AI factories, the strategic value of power equipment is increasing. Even if semiconductors and servers are secured, delays in power supply could prevent data centers, which require investments in the trillions of won, from becoming operational.An industry insider stated, "In the past, the key competitive factor was how many Nvidia GPUs could be secured, but now it is about how quickly transformers and power networks can be obtained that will determine the completion timeline of AI data centers. The core of the AI supply chain is expanding from semiconductors to power infrastructure."* This article has been translated by AI. 2026-07-13 18:04:00
  • Samsung Unveils Major Redesign of Galaxy Foldable Phones
    Samsung Unveils Major Redesign of Galaxy Foldable Phones Samsung Electronics is set to target the premium smartphone market in the second half of the year with its next-generation foldable phones, which feature a new aspect ratio and improved folding structure. The company aims to minimize the central crease often criticized in foldable devices while introducing a wider form factor to boost sales of its Galaxy Fold series.According to industry sources, Samsung will hold its 'Galaxy Unpacked' event in London on July 22, where it will unveil the Galaxy Z Fold8 (wide), Fold8 Ultra, and Galaxy Z Flip8. The invitation for the event hinted at a new form factor with the message 'A new shape unfolds,' suggesting a departure from traditional foldable phone designs. The model with the wider aspect ratio will retain the name 'Galaxy Z Fold8,' while the vertically elongated version will be branded as 'Galaxy Z Fold8 Ultra' to emphasize its high performance.The most significant change is in the crease of the Fold8 Ultra. A video leaked on July 12 by the tech news outlet Android Headlines shows the device being opened and tilted at various angles. Under bright lighting, some crease marks are visible at certain angles, but in typical usage conditions, the central crease is nearly imperceptible, indicating substantial improvements.This enhancement is likely due to a new hinge structure and upgraded foldable OLED panel. While the crease has not been entirely eliminated, the depth and curvature at the folding point have been reduced, minimizing visual and tactile discrepancies. Although slight crease marks may be visible under strong lighting, they are reportedly not noticeable in everyday use. As Chinese competitors have been focusing on thinner designs and crease improvements, Samsung's advancements aim to enhance its market competitiveness as the leading foldable phone manufacturer.The introduction of a 'wide fold' form factor, which reduces the vertical length and increases the horizontal width, is also anticipated. Industry experts expect the new model to feature a 7.6-inch QHD+ display with an aspect ratio shift from the previous 10:9 to 4:3. This change aims to provide a more tablet-like experience for viewing videos, webtoons, and documents. Samsung's official teaser also hints at a shorter and wider foldable design.Camera performance, often seen as a limitation in foldable devices, is also set to improve. The Fold8 (wide) and Fold8 Ultra are expected to include a 50-megapixel ultra-wide camera, comparable to that of the Galaxy S26 Ultra, a significant upgrade from the 12-megapixel ultra-wide camera in the previous Fold7 model. The lower camera resolution had been a noted weakness for Samsung's premium foldable phones.However, due to changes in form factor and rising memory costs, a price increase is anticipated. The 256GB model of the Fold8 Ultra is projected to be priced around $2,099, while the same capacity for the Fold8 may be set at approximately $1,899. If these projections hold true, the Fold8 Ultra will be the first of Samsung's flagship foldable phones to exceed a $2,000 retail price.* This article has been translated by AI. 2026-07-13 18:04:00
  • Financial watchdog urges asset managers to improve transparency
    Financial watchdog urges asset managers to improve transparency SEOUL, July 13 (AJP) - Financial watchdog Financial Supervisory Service (FSS) on Monday urged asset managers to improve disclosure practices by providing clearer information on voting rights and strengthening internal controls. It also called for an end to misleading or exaggerated advertisements for exchange-traded fund (ETF) to better protect investors. In a meeting with the head of the Korea Financial Investment Association and CEOs of 20 asset management firms, FSS chief Lee Chan-jin stressed the need for greater transparency in how fund managers vote on corporate matters including board appointments, executive pay, mergers and dividend policies on behalf of investors. The meeting followed an FSS review, which found that many firms still used formulaic disclosures, giving investors little insight into how key company decisions were actually made. The review showed that asset managers have become more active in exercising shareholder voting rights. The voting rate for public and private funds has improved from 79.6 percent in 2024 to 91.6 percent in 2025 and 91.8 percent this year. The proportion of votes cast against management proposals also increased to 8.2 percent from 5.2 percent over the same period. Despite the improvement, the regulator said the quality of disclosures remained weak. Of the 285 asset managers reviewed this year, 121, or 42.4 percent, relied on generic explanations such as "little impact on shareholder interests" and "no harm to shareholder rights" instead of explaining the reasons behind their votes, making it difficult for investors to understand the basis for those decisions. Asset managers need to improve these voting procedures and provide clearer disclosures so investors can properly assess whether voting decisions are appropriate," Lee said. He also warned against misleading or exaggerated advertising in the country's fast-growing ETF market, saying investors often rely heavily on promotional materials when selecting products. Lee urged firms to ensure the accuracy of information through an internal review process, while working with liquidity providers to keep ETF market prices closely aligned with their net asset values. Industry participants also raised concerns over excessive product competition, saying the industry should voluntarily limit the launch of ETFs that closely replicate competitors’ products to create a healthier market. Lee also called on asset managers to channel more capital into promising companies and emerging industries, creating a cycle in which investment supports business growth and generates returns for investors. The FSS said it plans to hold workshops in July and August for asset managers responsible for related disclosures to share information and provide examples of practices. Meanwhile, Samsung Asset Management, NH-Amundi Asset Management and VIP Asset Management, three of the country's leading fund managers, were cited as examples of best practice in this year's review. 2026-07-13 18:00:31
  • Iran Halts MOU Obligations, Citing U.S. Violations
    Iran Halts MOU Obligations, Citing U.S. Violations Iran has announced it will suspend its obligations under a memorandum of understanding (MOU) with the United States, citing U.S. violations of the agreement. However, diplomatic efforts by intermediary countries are ongoing, leaving the door open for negotiations.On July 13, Esmail Baghaei, spokesperson for the Iranian Foreign Ministry, told reporters that the MOU with the U.S. is in a crisis, but insisted that Iran did not violate the agreement first.Baghaei stated that the U.S. breached several provisions of the agreement, which consists of 14 clauses, before the one-month deadline for Iran's obligations regarding the Strait of Hormuz had passed. He said, "As long as the other party complies with its obligations, we will also fulfill ours, but we will not adhere to our obligations regarding the violations."Despite the ongoing tensions, diplomatic mediation continues. Baghaei noted that intermediary countries are still working to find a diplomatic solution between Iran and the U.S.Regarding the Strait of Hormuz issue, he mentioned that Iran is pursuing a joint response framework with Oman, but claimed that U.S. pressure on the Omani government is causing disruptions in related discussions.* This article has been translated by AI. 2026-07-13 18:00:00
  • Outline of Tax Reform: Is It a Crackdown or Normalization?
    Outline of Tax Reform: Is It a Crackdown or Normalization? The real estate market is difficult to read, and so are government policies.The outline of the tax reform plan to be announced at the end of this month is becoming clearer. Currently, three directions are being discussed. The property tax will increase through a higher fair market value ratio for the comprehensive real estate tax, while the capital gains tax will be restructured to focus on actual residence for long-term ownership special deductions. The emphasis on taxation will shift towards high-value, non-resident, and multi-homeowners. The trend is moving from a focus on the number of homes to considering both home prices and actual residency. Although the plan is not finalized, statements from the president and the Blue House policy chief have clarified the direction.A battle of words has begun. The government calls it 'normalization,' while the opposition labels it a 'tax increase' and accuses it of trying to control housing prices through taxation. Kim Yong-beom, the Blue House policy chief, wrote on Facebook on June 20, "We need to normalize real estate taxation. It is necessary and correct to rationally adjust property and capital gains taxes," to which the People Power Party responded, "The essence is merely a preview of a tax increase aimed at the people's wallets" (Choi Bo-yun, chief spokesperson). On July 23, the president will engage in a public debate on real estate with citizens, turning this battle into a nationwide broadcast. The word battle will soon translate into a bill battle. In such times, calculators are essential. Let's break it down one by one. The claim that property taxes are low is debatable.President Yoon Suk-yeol stated during a press conference marking his first anniversary in office on June 8, "Property taxes in our country are generally low. Therefore, there is not much burden even if one accumulates a lot of properties." Is this statement accurate?The answer changes depending on what denominator is used. When looking at property taxes as a percentage of real estate market value, or effective tax rate, South Korea's rate is 0.15%. This is half the OECD average of 0.33% and ranks 20th among 30 surveyed countries (Land and Freedom Research Institute, 2022-2023). By this standard, the president's statement holds true. However, when considering property taxes as a percentage of gross domestic product (GDP), the rate is 1.0%, which is similar to the OECD average of 0.95%, and as a percentage of total taxes, it stands at 3.48%, exceeding the average of 2.85%. By this measure, it is above average.This discrepancy arises because the value of real estate assets is large compared to the economy, while the overall tax burden is relatively low. Even if the effective tax rate is low, the share of property taxes in total tax revenue is not insignificant. Ultimately, the government points to the low effective tax rate, while the opposition highlights the high share of tax revenue.On July 2, the OECD released a report on the South Korean economy, providing another scorecard. Overall, real estate-related taxes account for 3.0% of GDP, nearly double the OECD average of 1.6%, with property taxes making up 29.4%, which is half the OECD average of 56.0%. In contrast, transaction taxes such as acquisition and capital gains taxes account for 50.4%. In summary, South Korea's real estate taxes are not low; they are simply mismanaged.Importantly, property tax increases should not be viewed in isolation. The OECD recommends changing the structure to tax heavily during transactions and relatively lightly during ownership. If property taxes are raised while leaving acquisition and capital gains tax burdens unchanged, it results in adding another layer rather than shifting the tax burden. If the government wants to call this 'normalization,' it must also include a reduction in transaction taxes in the same calculation. There is a clear aspect of 'restoration' in the reform.Let's examine the fair market value ratio for the comprehensive real estate tax, which is considered a key tool in this reform. This ratio, which determines the taxable standard by multiplying the publicly announced price, was originally set at 80%. The Moon Jae-in administration raised it to 95%, and the Yoon Suk-yeol administration lowered it to 60% in 2022, where it has remained. The proposed '80% increase' is closer to returning to the original baseline of the system.However, returning to the system's baseline does not mean that taxpayers' burdens will revert to their original levels. The publicly announced prices, home values, tax rates, and deduction conditions have changed since then. Even with the same 80%, if the publicly announced price multiplied by the taxable standard increases, the actual tax amount could be higher than in the past. For the government, it may be 'restoration,' but for those receiving the tax bill, it is undoubtedly an increase. This is where normalization and tax increases can coexist.It is also true that taxpayers have experienced a rollercoaster of changes. The property tax for an 84-square-meter unit in the Mapo Raemian Prugio, valued at around 2.5 billion won, dropped from about 5 million won in 2021 to around 2 million won between 2023 and 2025, before rising again to the mid-4 million won range this year. As tax rates and ratios have changed with different administrations, the tax on the same property has fluctuated by more than double over five years. The debate over what constitutes 'normal' is precisely why this is contentious. The calculation and the tax bill are not the same.Before delving into calculations, let's first consider who pays this tax. The comprehensive real estate tax applies to homes with a publicly announced price exceeding 1.2 billion won for a single household. Last year, the number of individuals subject to the comprehensive real estate tax was 481,000. As of the end of 2024, there are approximately 15.976 million individuals owning homes, meaning roughly 3 out of every 100 homeowners are affected. The number of people directly receiving tax bills is a small fraction of homeowners. Therefore, this tax cannot be labeled a 'nationwide tax bomb.'So, how much will those three individuals pay? According to estimates from the National Assembly Budget Office, the comprehensive real estate tax for this year is expected to increase from 1.4763 trillion won to 2.8425 trillion won, nearly doubling, while the total property tax, including property tax, will rise from 8.6995 trillion won to 10.658 trillion won. In Seoul alone, this represents a 21.1% increase. On the surface, these numbers could justify the term 'bomb.'However, the calculation does not directly translate to the tax bill due to the tax burden cap. The current comprehensive real estate tax law stipulates that the total property tax and comprehensive real estate tax combined cannot exceed 150% of the previous year's total tax amount. A simulation conducted by Woo Byung-tak, a specialist at Shinhan Bank, on ten major high-value single homes in Seoul showed that even with the ratio raised to 80%, all were capped. For example, the tax before applying the cap for a 84-square-meter unit in Banpo Xi was 24.26 million won, but the actual tax bill was reduced to 18.43 million won.If the cap remains unchanged, the entire calculated tax amount will not appear on the first year's tax bill. However, this does not mean there will be no shock. The tax can increase by a maximum of 50% compared to the previous year's total tax amount. The excess over the cap does not carry over to the following year, but since the cap is recalculated annually, if the taxable standard and system remain, future tax bills could approach the calculated tax amount. Therefore, it is crucial to observe whether the cap will be adjusted and, if so, by how much. During the Moon Jae-in administration, the cap was open to 300% for multiple homeowners. How will actual residence be determined?There are also indications that a full tax increase is unlikely. The direction being discussed both inside and outside the government is to maintain or reduce the burden on mid-to-low-priced, owner-occupied homes while concentrating taxation on high-value, non-resident, and multi-homeowners. The president also stated in January of this year, "I will avoid using taxes to control housing prices as much as possible," and added, "If I have lived there for a long time, I should be protected." In June, he remarked, "Owning multiple homes is not a problem. However, corresponding burdens should be imposed." While interpretations of these statements may vary, it is clear that the policy's focus is shifting towards protecting actual residents and increasing burdens on non-residents and multi-homeowners.The reform of the long-term ownership special deduction aligns with this direction. The president described this system on X (formerly Twitter) as a program that "significantly reduces capital gains tax solely based on long-term ownership, regardless of residency." This indicates a shift in the benefits previously given for ownership towards residency.The challenge lies in determining what constitutes actual residence. It must be decided whether to consider only the registered address or the actual duration of residence. Issues such as relocation for work, long-term business trips, family care, and periods when homeowners cannot occupy their homes due to redevelopment or rental disputes must also be addressed. Cases like weekend couples, where spouses work in different regions, complicate the distinction between registered addresses and actual living locations.If the criteria are too narrow, unavoidable non-residency may be grouped with speculative demand, while broad exceptions may make it difficult to prevent deceptive residency claims and formal address changes. While the principle of protecting actual residents seems straightforward, it becomes complex when applied as a tax criterion. The criteria for protection, as well as the methods of proof and exceptions, must be clearly defined. Both a crackdown and normalization are partially accurate.Thus, the assessment is as follows. The government's terminology of 'normalization' is only partially correct. It is true that the restoration of what the Yoon Suk-yeol administration implemented overlaps with the OECD's recommendation to shift the tax burden from transaction taxes to property taxes. However, Douglas Sutherland, head of the OECD's Country Analysis Division, noted that such a transition should occur "over a considerable period and in stages." If the reduction of transaction taxes is omitted, the structural transition could devolve into an overall tax increase.The opposition's characterization of a 'crackdown' is also only partially accurate. As long as the tax burden cap and differential design remain in place, the entire calculated tax amount will not be reflected in the first year's tax bill. If the burden on mid-to-low-priced, owner-occupied homes is protected while concentrating on high-value, non-resident, and multi-homeowners, it cannot be viewed as a uniform tax increase targeting all homeowners. However, if the fair market value ratio is raised along with an increase in the tax burden cap, or if property taxes are raised without reducing transaction taxes and if the exceptions for actual residence are narrowly defined, then the rhetoric will become reality.Ultimately, what needs to be confirmed in the announcement is not just the tax rate figures but the three design elements. Will the tax burden cap remain unchanged? Will property taxes be increased while transaction taxes are lowered? What criteria will be used to determine actual residence among registered addresses, actual residence duration, and unavoidable non-residency? Until these three elements are clarified, both 'crackdown' and 'normalization' remain mere terms used by opposing sides. 2026-07-13 17:52:00
  • Imported Fresh Eggs to be Sold at Discounted Price of 4,980 Won
    Imported Fresh Eggs to be Sold at Discounted Price of 4,980 Won The government has announced that imported fresh eggs will be sold for 4,980 won per tray. The use of agricultural discount vouchers will be expanded to include not only traditional markets but also general retail stores, enhancing consumer convenience.On July 13, the Ministry of Agriculture, Food and Rural Affairs held the 'Third Summer Agricultural and Livestock Supply Stabilization Task Force Meeting' at the Government Sejong City Hall, in collaboration with the Rural Development Administration, National Agricultural Cooperative Federation, and Korea Agro-Fisheries & Food Trade Corporation (aT).The ministry plans to prioritize the supply of 10 million of the 200 million imported fresh eggs to retailers such as E-Mart, Lotte Mart, and the Bakery Association this week, with a plan to supply an additional 20 million eggs weekly thereafter. The price for a tray of imported fresh eggs (30 large eggs) will be reduced from 5,890 won to 4,980 won.To further alleviate consumer prices, discount support will be implemented. Agricultural discount vouchers, sold at a 30% discount, will be issued starting July 20 at a scale of 20 billion won per month. From July 20 to 26, these vouchers will be available for seniors aged 65 and older, and from July 27 to August 2, they will be available to the general public. A discount event for all agricultural and livestock products will also be held in collaboration with major retailers until September 2.During the meeting, the impact of the rainy season on agricultural products was also assessed. So far, damage to crop yields from the rainy season has been minimal. However, the ministry expressed concerns about potential pest outbreaks and will enhance growth management through the provision of nutrients and pesticides. Continuous monitoring of production areas will be conducted to respond proactively to any unusual occurrences.The meeting also reviewed livestock prices. Despite high prices due to livestock infectious diseases, supply conditions for various products are gradually improving. The increase in wholesale market shipments of pork, driven by expanded shipment incentives, is expected to lead to a decrease in wholesale prices, which will eventually be reflected in retail prices. Chicken prices have also dropped compared to the previous week due to improved supply conditions from the import of broiler eggs.Kim Jong-gu, Deputy Minister of Agriculture, Food and Rural Affairs, stated, "During the summer, the supply and demand situation for agricultural and livestock products can change rapidly due to weather conditions such as heavy rain and heat waves. We will closely monitor production trends and respond proactively. We will also ensure the smooth implementation of measures to stabilize prices through the expansion of fresh egg supply and large-scale discount events."* This article has been translated by AI. 2026-07-13 17:52:00