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Air Premia Valuation Negotiations: VIG and Tire Bank Narrowing Differences? ◆Aju Economy Major News▷Air Premia Valuation Negotiations: VIG and Tire Bank Narrowing Differences?- On September 17, investment banks and the aviation industry reported that VIG Partners has recently appointed Bain & Company as its consulting firm and has begun due diligence for the acquisition of Air Premia. The target of the acquisition is approximately 70% of the management rights held by AP Holdings and Tire Bank.- The key issue in the negotiations is the price. Kim Jeong-kyu, chairman of Tire Bank, emphasizes that Air Premia possesses differentiated long-haul route competitiveness among domestic low-cost carriers, which is driving up the acquisition price.- Chairman Kim's investment in Air Premia is around 300 billion won. A source familiar with the matter stated, "Chairman Kim is reportedly asking for at least 400 billion won, reflecting the investment recovery, Air Premia's current revenue nearing 600 billion won, its fleet of nine aircraft, and the value of its robust long-haul network centered on North America."- In contrast, VIG Partners remains skeptical. Air Premia recorded a total capital of -46.7 billion won last year, indicating a state of complete capital erosion, and the scale of lease liabilities maturing within a year amounts to 85 billion won.- However, both parties are firmly committed to the sale and acquisition. VIG Partners sees this transaction as essential for the successful exit of Eastar Jet, which it acquired in 2023.◆Major Reports▷Rising Oil Prices, But No Immediate Economic Recession - Oil prices have surpassed $100 per barrel, raising concerns about the economy. The situation in the Middle East supply chain is intensifying, and operational disruptions at Russian oil production facilities are becoming more frequent.- Given this situation, considering the liquidity effects that will be reflected late this year, oil prices next year could break historical highs. However, worrying about an immediate economic recession is premature. When adjusted for inflation, real oil prices were higher during 2009-2013 and 2005-2007 than they are now, yet did not trigger an immediate economic downturn.- If one is contemplating the onset of economic slowdown, the focus should be more on gold and copper rather than oil. Gold serves as a hedge asset that safely preserves asset value when liquidity expands indiscriminately. Due to this characteristic, it often reflects liquidity (interest rates, quantitative easing, etc.) 4-6 months earlier than leading economic assets like stocks (e.g., semiconductor sector).- In this regard, discussing an economic recession based on today's soaring oil prices is premature. From a commodity perspective, it is a time that requires active sector rotation based on the economic cycle.◆Major Disclosures After Market Close (September 17)▷Naver Withdraws from Acquisition of Baedal Minjok: "Ultimately Decided Not to Proceed"▷ABL Bio Responds to 'Pre-Disclosure Trading Allegations': "Will Cooperate Fully with Investigation"▷Doosan to Invest 1 Trillion Won to Expand Production Lines for Copper Foil Laminates (CCL) in Korea and China: Set to Operate by 2028◆Fund Trends (As of September 16, Excluding ETFs)▷Domestic Equity Funds: +640.54 billion won▷Overseas Equity Funds: +32.24 billion won* This article has been translated by AI. 2026-09-18 08:00:00
Korea's producer inflation reaccelerates toward 8% annual gain *Updated with additional information and comments SEOUL, September 18 (AJP) -South Korea's producer prices spiked toward an on-year increase of 8 percent on re-accelerating energy costs and unrelenting chip prices, pointing to sticky price pressure and a tightening bias in the latter half, central bank data showed Friday. The producer price index for August added 0.2 percent from July and 7.9 percent from a year earlier, reversing an easing trend in July, when it fell 0.4 percent on month and rose 7.7 percent on year, according to the Bank of Korea (BOK). Energy prices resumed their climb after retreating in July. The BOK's energy subindex rose 1.0 percent from the previous month after falling 3.6 percent in July, while its on-year gain accelerated to 11.1 percent from 9.7 percent. Coal and petroleum products gained 0.4 percent on month, reversing a 4.2 percent fall in July, and were 54.3 percent higher than a year earlier. Industrial city gas prices surged 11.0 percent from July and 37.8 percent on year. The renewed energy pressure came as Dubai crude, South Korea's benchmark, averaged $88.75 per barrel in August, up 15.6 percent from $76.75 in July. Worse, the upper pressure has worsened from renewed tensions in the Middle East. International oil prices during Sept. 1-16 were about 29 percent higher than the August average, while wholesale industrial city gas rates rose 6.6 percent this month, which could add upward pressure to producer prices, said Lee Heung-hoo, head of the BOK's price statistics team. Chip prices remained another persistent source of inflation. Semiconductor producer prices rose 1.4 percent from July and 147.6 percent from a year earlier, while prices for computer and peripheral equipment jumped 6.3 percent on month and 158.3 percent on year. Computer memory device prices alone surged 8.8 percent from July, while DRAM prices were 476.1 percent higher than a year earlier, according to the BOK. Market researcher TrendForce expects conventional DRAM contract prices to rise 13 to 18 percent in the third quarter from the previous quarter as strong AI-server demand and tight supply continue to support prices. Higher agricultural prices from a scorching heat wave added to the monthly rise. Agricultural, forestry and fishery products climbed 3.8 percent from July, led by a 4.9 percent increase in agricultural products and a 2.8 percent gain in livestock prices. Fresh food prices jumped 7.4 percent on month. Underlying price pressure remained elevated even without food and energy. The producer price index excluding the two categories was unchanged from July but stood 8.2 percent higher than a year earlier despite a stronger won. The won averaged 1,406.3 per dollar in August, strengthening 6.1 percent from 1,497.4 in July, according to BOK data. The effect was evident in the domestic supply price index, which combines domestically produced and imported goods. It fell 1.3 percent from July as imported raw-material prices dropped 6.4 percent, imported intermediate goods fell 5.9 percent and imported final goods declined 5.8 percent. The overall index nevertheless remained 8.6 percent higher than a year earlier. The renewed uptick in producer price suggests sustained pressure on consumer inflation front through much of the second half. The BOK raised its benchmark rate by 25 basis points to 3.00 percent on Aug. 27, its second consecutive increase, saying inflation was likely to stay above its 2 percent target for a considerable period. Its September monetary policy report maintained a tightening bias, saying the bank would determine the timing and pace of additional rate hikes based on inflation, growth and financial stability conditions. AJP TAKEAWAYS - South Korea's producer inflation reaccelerates: August PPI rose 0.2% on month and 7.9% on year, reversing July’s monthly decline and edging closer to 8%. - Energy and chips stay hot: Energy prices rose 1.0% m/m and 11.1% y/y, while semiconductor producer prices climbed 1.4% m/m and 147.6% y/y; DRAM prices were up 476.1% y/y. - Second-half inflation pressure persists: The renewed producer-price uptick points to continued pass-through pressure on consumer prices, reinforcing the BOK’s tightening bias even as a stronger won cushions imported costs. 2026-09-18 07:42:56
Parents of Student Who Assaulted Teacher in Cheongju File Child Abuse Complaint In a recent incident at an elementary school in Cheongju, a student assaulted her teacher, leading to controversy. The parents of the fifth-grade student, identified as A, have reportedly filed a child abuse complaint against the teacher, referred to as B, along with the vice principal and another teacher.According to reports from Yonhap News Agency on September 17, A's parents allege in their complaint that B yelled at their child after refusing to change a test paper as requested. They also claim that during the assault, the vice principal made comments that constituted emotional abuse.The provincial education office is providing legal support to the accused teachers while also seeking conflict mediation services for the parents. An official from the education office stated, "We have received a report of child abuse related to this incident from the police and administrative authorities, and we are currently gathering detailed information regarding the complaint."Previously, on September 2, at around 8:40 a.m., A struck B in the face and head with her fists and kicked her. A reportedly became upset after receiving a dirty test paper and verbally abused B. The following day, when B informed A that she would have to retake the test, A assaulted her again.A continued her assault by verbally abusing the vice principal and three to four other teachers who intervened. As a result of this incident, A has been placed on attendance suspension. 2026-09-18 07:20:00
Delay in U.S. Investment Agreement Raises Concerns for Doosan Enerbility's Gas Turbine and Reactor Projects The South Korean government has postponed a report to the National Assembly regarding U.S. investment negotiations, raising concerns for Doosan Enerbility, which was expected to be a key beneficiary of these investments, particularly in large nuclear power projects.On September 18, sources from the government and political circles indicated that the Ministry of Trade, Industry and Energy requested a delay in the scheduled report to the National Assembly. As a result, the announcement of the first major U.S. investment project, estimated at $200 billion (approximately 272 trillion won), which was anticipated for that day, is also expected to be postponed.The delay in the National Assembly report and project announcement is reportedly due to disagreements over nuclear power initiatives between the U.S. and South Korea. South Korea proposed investing in the construction of eight large nuclear reactors in the U.S., suggesting that six would use the American Westinghouse AP1000 design and two would utilize the Team Korea APR1400 design.However, the U.S. government and Westinghouse have expressed reservations about constructing the APR1400 in the U.S., leading to complications in negotiations. Although the APR1400 has passed design certification by the U.S. Nuclear Regulatory Commission (NRC), concerns arise that its approval could undermine the market position of the U.S.-made AP1000.The APR1400 is a new model of pressurized water reactor developed by South Korean companies, including Doosan Enerbility, Korea Hydro & Nuclear Power, Korea Electric Power Technology, and Korea Nuclear Fuel. Doosan Enerbility is responsible for manufacturing key components such as the reactor pressure vessel and steam generators, making it a crucial player in the U.S. nuclear market alongside small modular reactors (SMRs).Despite the potential setback for the APR1400's entry into the U.S. market, analysts believe it may not significantly harm Doosan Enerbility, unlike other South Korean firms. The company has already been confirmed as a supplier of key components for the Westinghouse AP1000 and is in the contract execution phase. However, unlike the APR1400, which has project leadership within Team Korea, the AP1000 carries greater risks due to its contractual relationship with Westinghouse and potential changes in supply chain strategy.If the U.S. nuclear investment is finalized, it is expected to enhance production capacity, adding U.S. nuclear projects to existing large-scale projects like the Dukovany 5 and 6 in the Czech Republic and the Yeongdeok 2 reactors. Currently, Doosan Enerbility's production capacity for large nuclear components is reported to be around two units per year.Jung Bum-jin, a professor of nuclear engineering at Kyung Hee University, stated, "Given the disruption in the U.S. nuclear supply chain, a policy prioritizing domestic components is unlikely to succeed. South Korea has no reason to rush into concessions, and I hope the government will negotiate firmly in favor of Korean companies."In contrast, the first major investment project in the U.S., the Encinada gas combined cycle power plant in Texas, is expected to proceed smoothly due to minimal disagreements between South Korea and the U.S. regarding the expansion of artificial intelligence data centers (AI DC). It is anticipated that the project will be confirmed according to South Korea's proposals, with Doosan Enerbility expected to play a key role as a supplier of gas turbines.While the U.S. may request that American companies like GE Vernova participate in the supply chain, the current demand for gas turbines driven by the AI DC supercycle suggests that major gas turbine manufacturers are already overwhelmed with private sector orders, making it unlikely that they will insist on using U.S.-made components.* This article has been translated by AI. 2026-09-18 06:04:10
South Korea Urges EU to Consider Carbon Regulation Burdens on Companies The South Korean government has requested the European Union (EU) to consider the feasibility and cost burdens on Korean companies when expanding the scope of the Carbon Border Adjustment Mechanism (CBAM) to include automotive parts and home appliances. It emphasized the need to reflect the contributions of Korean companies in local investments and supply chains during the design of the Industrial Acceleration Act (IAA) and to consistently apply the principle of partner country equivalence in sectors such as automotive, steel, and nuclear power.The Ministry of Trade, Industry and Energy announced on the 18th that a delegation led by Kim Jang-hee, the Director of New Trade Strategy Support, visited Brussels, Belgium, from the 16th to discuss trade issues with key departments of the EU Commission.This visit follows a meeting on the 9th between the Minister of Trade and EU Executive Vice President Valdis Dombrovskis. The purpose was to convey the position of Korean companies during the EU's regulatory legislative process and to reduce unreasonable burdens.The delegation met with the office of the Executive Vice President to discuss the Industrial Acceleration Act, Corporate Sustainability Due Diligence Directive (CSDDD), and the Carbon Border Adjustment Mechanism. Regarding the IAA, they highlighted the contributions of Korean companies to investment, production, employment, and supply chain development within the EU. The aim is to design the system considering cooperation with reliable partners like Korea, which has invested in the EU for a long time.Additionally, they conveyed the need for the principle of partner country equivalence to be applied predictably and consistently across the entire system, including automotive, steel, and nuclear power.The government has previously submitted three informal position papers, requesting that the contributions of Korean companies be reflected in the system's design.On supply chain due diligence regulations, they demanded clearer standards for companies to comply with. The CSDDD stipulates obligations for companies regarding human rights and environmental supply chain due diligence for their own operations, subsidiaries, and business partners.The delegation requested that the industry's demands be reflected in future guidelines based on the government position paper submitted in July. They also proposed establishing a permanent consultation channel between Korea and the EU to continuously discuss challenges in the interpretation and implementation of the system.Regarding CBAM, they requested minimizing unnecessary costs and administrative burdens during the processes of third-party verification and the expansion of downstream applications. The EU has been implementing CBAM since January, focusing on basic materials like steel and aluminum, and is considering expanding its scope to downstream products such as automotive parts and home appliances. The government maintains that the complex nature of downstream products should be taken into account.Cooperation in the digital and critical minerals sectors was also discussed. They reviewed the remaining procedures for the implementation of the Korea-EU Digital Trade Agreement signed in June and discussed follow-up cooperation measures, including electronic signatures. They exchanged views on diversifying critical mineral supply chains and policy coordination among major countries.Kim Jang-hee stated, "Changes in the EU's industrial, supply chain, and environmental regulations directly impact our companies' economic activities. We will continue to consult to ensure that our companies' positions are adequately reflected in the implementation process of these regulations."* This article has been translated by AI. 2026-09-18 06:04:10
Government Launches Pilot Project to Increase Transmission Capacity Based on Seasonal Temperatures The government is set to launch a pilot project aimed at flexibly increasing the transmission capacity of existing power lines based on seasonal temperatures. The initiative seeks to send more electricity during cooler seasons when transmission capacity is higher, thereby reducing the need for renewable energy output control and enhancing the utilization of the power grid.The Ministry of Climate Energy and Environment announced on September 17 that it will implement a seasonal transmission capacity (SAR) pilot project in Jinan, North Jeolla Province, and Geumsan, South Chungcheong Province, starting September 19 for one year.Seasonal transmission capacity leverages the characteristic that the thermal capacity of power lines changes with seasonal temperature variations. During cooler seasons, when ambient temperatures are relatively low, the amount of electricity that power lines can handle increases, allowing for higher operational capacity.During the pilot project, the transmission capacity in the Jinan and Geumsan regions will be adjusted based on the seasonal maximum temperatures. These areas were selected due to concerns about potential overloads on power lines, assuming specific equipment failures or outages during the spring.The government believes that by flexibly managing transmission capacity, it can reduce renewable energy output control in proportion to the increased line capacity. Maintenance and inspections of transmission lines and substations can also be conducted during periods of increased transmission capacity, thereby enhancing the overall efficiency of the existing power grid.Currently, South Korea employs a static transmission capacity (SLR) method, which determines transmission capacity based on unfavorable conditions, such as a temperature of 40 degrees Celsius and wind speeds of 0.5 meters per second. While this method is advantageous for stable power supply, it applies a fixed transmission capacity regardless of actual weather conditions.As renewable energy generation facilities increase, there is a growing need to maximize the transmission capabilities of existing power grids alongside the construction of new ones. Seasonal transmission capacity is a type of dynamic transmission capacity (DLR) that adjusts line capacity based on external conditions like temperature.In Europe, 27 countries, including Germany, have adopted dynamic transmission capacity methods. Most European nations adjust transmission capacity based on seasonal maximum temperatures, while some countries, including the United States, also consider actual ambient temperatures around transmission lines through an ambient temperature-adjusted transmission capacity (AAR) method.The Ministry plans to verify the effects of increased transmission capacity and reduced renewable energy output control through this pilot project. It is also considering additional pilot projects that would adjust transmission capacity based on ambient temperatures using the AAR method.Lee Jae-sik, the Ministry's Director of Power Grid Policy, stated, "This pilot project will allow for more efficient utilization of the power grid and reduce output control. We will continue to pursue various measures to secure the conditions necessary for expanding renewable energy to 100 GW in the future."* This article has been translated by AI. 2026-09-18 06:04:10
KAI Shifts Focus to Satellite Imagery Sales in Space Business Korea Aerospace Industries (KAI) is shifting its focus from developing satellites for government contracts to selling satellite imagery and data as a service. In an interview on September 15 at the KAI Space Center in Sacheon, Park Yong-hyun, head of KAI's Space Business Development Team, stated, "The market for simply asking for satellites we have developed is no longer competitive, so we need to gradually transition to a service business that utilizes the satellites we have launched." KAI sees satellite imagery as a breakthrough opportunity. The company plans to launch satellites and then sell the imagery and data obtained from them to both government and private sectors, creating its own revenue stream. Park anticipates that the government's role in the space industry will evolve from directly funding satellite development to becoming an 'anchor customer' that purchases imagery and data from private satellites. He explained, "The market is shifting towards a model where companies develop and operate satellites, and the government or end-users purchase the necessary imagery. It would be ideal for the government to buy a minimum amount of imagery to encourage companies to invest confidently." To secure competitiveness in the satellite imagery market, it is crucial to enhance 'image quality' beyond just competing on resolution. Artificial intelligence (AI) is identified as a key technology that can elevate the competitiveness of satellite services. KAI is also pursuing a strategy to enter overseas markets with its satellite imagery services. The company plans to leverage its affiliate, MESA, to first supply satellite imagery and analysis solutions, eventually leading to satellite sales. Park noted, "It is not easy to suddenly enter foreign markets and ask them to buy satellites. We are considering presenting imagery and utilization solutions to countries with lower entry barriers first, and then connecting that to satellite sales later." * This article has been translated by AI. 2026-09-18 06:04:10
Charity Bazaar 'Rise Up' Supports Youth Preparing for Independence Enjoy browsing good items while helping youth preparing for independence. A unique charity bazaar is taking place in the heart of Cheongdam-dong, Seoul. The 'Rise Up Vol.1' charity bazaar features a variety of brands from fashion to beauty, food and beverage, and home goods. 'Rise Up' is a social contribution project personally planned by Yang Ji-hae, CEO of Metro City. The theme of the inaugural event focuses on youth preparing for independence. These young individuals, who have been under the care of child welfare facilities or foster care, step into society on their own once they turn 18. Proceeds from this charity event will be used to support emergency medical expenses and psychological counseling for these youth through the support organization YANA. Good causes attract good people. Over 50 brands have contributed products in support of the event, and celebrities and creators have donated items from their own brands or personal collections. Yoon In-kyung, head of the Rise Up project, stated, "Many brands willingly offered their items upon hearing about the event's purpose, and employees from Metro City and the representative of The Taco Booth volunteered during the bazaar period." Thanks to these contributions, the venue set up in the basement levels of MEMEMI GARDEN resembles a small curated shop, showcasing a diverse range of luxury brands, K-beauty leaders like Ttox & Peel and Banaba, as well as food and beverage and home products. The signed jerseys of South Korean soccer stars Lee Kang-in and Kim Min-jae also drew attention. These jerseys will be auctioned off, with all proceeds going towards emergency medical support for youth preparing for independence. The venue itself is a sight to behold. MEMEMI GARDEN has received prestigious design awards, including the iF Design Award, making it an enjoyable space to explore. Choosing items that one needs can provide someone else with a valuable opportunity to receive treatment and regain their footing. This weekend, consider joining in the warm spirit of giving to support the new beginnings of youth preparing for independence. 2026-09-18 06:04:10
Future Uncertain Amid Rising National Debt and Budget Increases The national budget for next year will exceed 820 trillion won, marking a 12.8% increase from this year, the steepest rise since total expenditure statistics began. The previous record was a 10.6% increase during the 2009 global financial crisis. This is the first time in a period of economic prosperity that the budget has increased by double digits. Tax revenue is also set to rise significantly, with national tax expected to increase by 49% or 194 trillion won in a single year. The National Assembly must question how this money will be spent and what will remain.The government's response to the surge in tax revenue is to invest in the future. They plan to allocate funds to artificial intelligence and talent development to boost potential growth rates. While the intention is commendable, the approach raises concerns. If spending increases based on a temporary economic boom, it is not an investment but rather a reckless move.After spending, little will remain. Despite a 194 trillion won increase in tax revenue, the managed fiscal balance still shows a deficit of 3 trillion won. This is because expenditures have been aligned with the peak of tax revenue. From 2028 onward, total revenue growth rates are projected to decline to 4.5%, 3.4%, and 3.4%, while expenditures are set to rise by 9%, 7%, and 5%. The deficit is expected to grow to 48 trillion, 83 trillion, and 101 trillion won, respectively. A significant portion of the increased spending is allocated to irreversible items such as the basic child allowance, universal youth savings, and free tuition for national universities.Even this outlook is considered overly optimistic. The government's medium-term plan assumes that semiconductor tax revenue will remain at its peak. Even under this assumption, the deficit is projected to return to the 100 trillion won range by 2030. If the semiconductor market experiences even a slight downturn, tax revenue could drop by tens of trillions, leading to an uncontrollable increase in the deficit. The government has diagnosed the semiconductor cycle as short but has planned expenditures as if there were no such cycle. This is a risky fiscal management strategy that relies on the continuation of good times.The balance of macroeconomic policy has also been disrupted. This year, the current growth rate is projected to reach 12%, the highest in 30 years, and the Bank of Korea has raised interest rates for two consecutive months due to inflationary pressures. The government has reversed the fundamental principle of reducing fiscal spending during economic booms. When the central bank applies the brakes, fiscal policy should not accelerate; otherwise, interest rates will rise further, impacting households and businesses that are already burdened with debt.Even more perplexing is the national debt. Despite a 49% increase in tax revenue, national debt is expected to rise by 106 trillion won to 1,520 trillion won. The reason for the 3 trillion won deficit alongside a 106 trillion won increase in debt is the future response fund. The government has pre-approved a limit on bond issuance to accumulate 104 trillion won in surplus funds for this fund. While the government refers to this as savings, borrowing with one hand and holding onto the money with the other is not savings. The interest on the 104 trillion won stored in the fund alone amounts to 4 trillion won per year. The government's response is to earn this interest through stock and bond investments, but it is inappropriate for a government that sets market rules and holds licensing authority to chase profits through debt. Countries like Chile and Norway accumulate stabilization funds with actual surpluses. We are the first to accumulate a fund while increasing debt.The interest burden is already substantial. Next year, interest on national bonds is projected to reach 42.8 trillion won, two and a half times that of 2020, and is expected to exceed 53 trillion won by 2030. This amount is equivalent to 60% of the defense budget of 73 trillion won and larger than the R&D budget of 39 trillion won. As debt increases and interest rates rise, the interest burden will grow to unprecedented levels, ultimately affecting welfare, defense, and education.Despite this, the government claims that fiscal health has improved, stating that the national debt ratio will decrease from 51.6% to 48.3%. This is due to differing projections for the denominator. This year's ratio is based on the nominal GDP forecast for 2026, which anticipated low growth at the beginning of the year, while next year's ratio is calculated based on the nominal GDP for 2027, reflecting the semiconductor boom. If recalculated with current projections, this year's ratio would be 46.9%, significantly lower, while next year's would actually rise to 48.3%. Excluding the 104 trillion won stored in the fund, the ratio would be 45.0%. Fiscal health built on dishonest numbers is not true health.Examining the future fund reveals even clearer issues. Of the 162 trillion won in fund revenue, only 45 trillion won is allocated for projects. Among these, only 42% is for capital accumulation for the future. The remainder is allocated to cash, vouchers, local general funds, public enterprise investments, and operational costs. The basic child allowance of 29 trillion won was expanded without social discussion or funding measures and included in the fund. Even when the boom ends, children will continue to be born, and this money will return to the general account as mandatory spending. The youth culture and arts pass has increased from 36.1 billion won to 792.5 billion won, a 22-fold increase. Existing general account projects worth 18 trillion won have merely been renamed and transferred to the fund. In reality, there are very few projects that are truly necessary for the future, such as elderly care or youth AI capability transformation.Procedures have also been bypassed. The National Living Convenience Complex Center is set to spend 3 trillion won over two years, with 200 billion won per site, yet there is no record of a preliminary feasibility study. The 39.6 trillion won allocated for local and educational funds has also been redirected to the central fund by altering formulas. Money that local governments used to spend independently has now become funds allocated by the central government.There are no rules. None of the 18 articles of the fund law specify a limit on accumulation, withdrawal conditions, restoration obligations, or sunset provisions. When funds are withdrawn for general accounts, it is concluded with post-reporting without National Assembly review. The chair of the committee that reviews the fund is the Minister of Planning and Budget. The person who deposits the money, withdraws it, and supervises it is the same. This is not a fund but a second budget established outside National Assembly scrutiny, a negative balance account that has been pre-withdrawn. Since the resources are debts that future generations will have to repay, this fund is not a future response fund but a future debt fund that will burden future generations.The government had other, better options. If the total expenditure growth rate had been set at 7.8%, the managed fiscal balance would show a surplus of 33 trillion won, the first surplus in 20 years since 2007. A 7.8% increase is still sufficiently expansive. With that surplus, debt could be repaid over two years, and if semiconductor tax revenue remains, the fund could be accumulated then. Savings should be made with surplus funds, not borrowed money. A fund built on repaying debt and then saving with remaining funds would be a future fund that becomes a legacy rather than a burden for future generations.Now, the ball is in the National Assembly's court. There are two key questions for lawmakers to address: Why is debt being incurred at the same level as during a deficit year when the deficit has disappeared? Who will use the fund created from this debt, and under what rules? It is essential to stop the practice of saving through debt, enshrine the rules of the fund in law, and ensure that the management of the fund is composed of private experts rather than the Minister of Planning and Budget and government officials. Additionally, projects unrelated to the future should be eliminated. The reason the National Assembly must address these issues is clear: while the government prepares the budget, the citizens bear the debt, and the National Assembly is the body that approves that debt on behalf of the citizens. If these issues are not corrected in this review, the increased spending and debt will be passed on to the next National Assembly, the next government, and future generations.* This article has been translated by AI. 2026-09-18 06:04:00
KAI Expands Production of KF-21 Fighter Jets and LAH Helicopters "Your dreams will come true. Happy challenge, successful takeoff of the KF-21." On September 15, at the Korea Aerospace Industries (KAI) production facility in Sacheon, South Gyeongsang Province, a large sign in the KF-21 assembly area caught the eye. Below it, workers were busy preparing for the delivery of the first mass-produced aircraft this month. The production line featured KF-21 jets in various stages, from those with exposed interiors to nearly completed models. Workers were connecting internal piping and installing various equipment on each aircraft. As the jets progressed through assembly, internal work, and painting, they increasingly resembled the familiar KF-21 design. The fourth mass-produced unit was positioned at the front of the line, with most of the major equipment already installed and final piping connections underway. KAI's Sacheon facility has begun production on the 23rd unit out of an initial contract for 40 aircraft. The simultaneous production of the KF-21 and FA-50 also drew attention. While they may appear similar at first glance, the differences became clear as they neared completion. Unlike the single-engine FA-50, the KF-21 features two engines side by side at the rear. KAI can produce about two KF-21s per month, with the capacity to increase to three if needed. As I passed through the final assembly area and entered the hangar, the first mass-produced unit, set for delivery to the Air Force this month, came into view. Red tags reading 'REMOVE BEFORE FLIGHT' were attached to various parts of the fully assembled aircraft. The first mass-produced unit will be delivered to the Air Force after undergoing acceptance tests through actual flights. For the workers who have been involved in the KF-21 project since the prototype stage, the first mass-produced unit holds special significance. Ahm Hyun-jae, a team leader in KAI's fixed-wing final assembly technology, said, "I shed tears when the prototype first flew. At that moment, I felt that our hard work was finally paying off, but with the first mass-produced unit, it feels like the real journey is just beginning." From Fighter Jets to Helicopters: Busy Production of LAH As I left the fighter jet production line and headed toward the rotary-wing section, the scene changed dramatically. Instead of sleek fighter jets, the production line was filled with small armed helicopters (LAH) equipped with large rotors. Several aircraft, from those already taking shape to others with exposed interiors, were lined up at various stages of production. On one side, workers were engaged in the 'fuselage mating' process, combining the forward and central fuselage sections. Once joined, the aircraft received landing gear and various electronic equipment. Inside the fuselage, three to four workers were meticulously connecting complex wiring and equipment. Despite their large size, helicopter components placed on one side of the production line were surprisingly lightweight, thanks to the use of composite materials like carbon fiber. KAI is expanding its technological capabilities with the LAH production, preparing for future battlefields with a manned-unmanned teaming (MUM-T) system. KAI Expands Beyond Fighter Jets into Space After passing through the fighter jet and helicopter production lines, I arrived at the space center, where the atmosphere shifted once again. The South Korean flag and KAI logo were prominently displayed at the top of the production line walls. Unlike the aircraft manufacturing facility, the interior was much more organized and quiet, with strict controls on temperature, humidity, and airborne particles for satellite production. KAI's space center includes assembly areas for satellites, as well as orbit environment testing rooms, launch environment testing rooms, and electromagnetic testing rooms. A separate acoustic testing room is also available to simulate the vibrations and loud sounds generated during launch, as well as the vacuum and rapid temperature changes of space, ensuring that satellites can withstand extreme conditions. Since starting the development of the multipurpose practical satellite in 1994, KAI has accumulated expertise in satellite system and body development through subsequent projects. Inside the center, medium and large satellites, along with a small synthetic aperture radar (SAR) satellite currently under development by KAI, were being assembled. This satellite, weighing around 150 kg, is being developed as part of KAI's bid for the government's small satellite system SAR constellation project. It is equipped with SAR technology for ground observation regardless of day or night and weather conditions, as well as an automatic identification system (AIS) signal receiver to track maritime vessels. The exterior is wrapped in a gold multi-layer insulation (MLI) to protect internal equipment from extreme temperature fluctuations in space. Park Yong-hyun, head of KAI's space industry development team, stated, "We can assemble about 20 small SAR satellites simultaneously, and if we utilize idle space, we could produce over 100 units annually. We have established a one-stop solution that allows us to handle everything from design to production, assembly, and testing in one location once orders come in."* This article has been translated by AI. 2026-09-18 06:04:00