Extra! Korea

February 25, 2010

Now it’s Hyundai’s turn to have a recall

Filed under: economics — extrakorea @ 1:02 pm

Any gloating by Hyundai over Toyota’s recent misfortunes should be muted now. Because of a mechanical problem with the front-door latches on the new 2011 Sonata sedan, Korea’s biggest auto maker announced a recall of 46,000 units in South Korea and 1,300 units across the U.S. Hyundai received complaints that, in certain unusual circumstances, the latch becomes stuck, after which the doors don’t close properly, but there were no reports of injuries or of accidents. The voluntary recall will become effective in March, and only affects cars that were built until December 6.

February 15, 2010

China plans huge investment in North Korea

Filed under: economics, North Korea — extrakorea @ 9:03 am

According to a news report, China is planning to invest $10 billion in North Korea to build railroads, harbors and houses. Over 60 percent of the investment will come from Chinese banks, and the deal is supposed to be signed next month.

January 21, 2010

Reporter has difficulty not laughing while reporting “Go home, make babies” news

Filed under: economics, humor — extrakorea @ 2:35 am

As Brian in Jeollanam-do reported earlier, South Korean bureaucrats are being told to go home early so that they can make more babies, for the good of the nation (“Just lie back and think of England Korea.”).

The BBC reported on this, and during the video segment, the reporter has difficulty not laughing while reporting this news (see 0:40 of the video). And at 1:05, 1:25, and 1:55 he’s visibly trying really hard to keep a straight face.

Boosting the number of newborn children is a priority for the government, which is staring into the abyss of a rapidly ageing society, falling levels of manpower and spiralling health care costs.

The Ministry of Health, now sometimes jokingly referred to as the Ministry of Matchmaking, is in charge of spearheading this drive, and it clearly believes its staff should lead by example.

Generous gift vouchers are on offer for officials who have more than one child, and the department organises social gatherings in the hope of fostering love amongst its bureaucrats.

But critics say what is really needed is widescale reform to tackle the burdensome cost of childcare and education that puts many young people off starting a family.

Be sure to check out the comments below the article. Korea Times, this is what a comment board should look like.

January 19, 2010

Universal Studios’ largest Asian theme park scheduled to open in Korea in 2014

Filed under: economics, movies — extrakorea @ 6:23 am

After a delay of two years because of a lack of funding, Universal Studios has revived a plan to build a theme park in Hwaseong City, near Seoul. Scheduled to be begin construction in 2011 to be completed in 2014, it will be Universal Studios’ third in Asia, and its largest, as it will include a movie theme park, water park, and a resort that will include a golf course and condominiums.


January 10, 2010

Knowing it must adapt, LG will use Google’s Android operating system in its smartphones

Filed under: economics, technology — extrakorea @ 12:51 pm

LG Electronics is doing very well as a TV manufacturer these days, having displaced Sony as the number two producer and recently unveiling the world’s thinnest TV. But the electronics giant knows that it can easily be left behind if it does adapt, and quickly. Sony is planning to take second place back. More importantly, the product lines that are likely to be popular in the future, smartphones, smart TVs. and solar cells, are ones that LG is currently not strong in.

He [LG Electronics CEO Nam Yong] said the company would not be able to survive after three to five years if it fails to become a major player in those fast-growing market segments.

“There is a sense of crisis (at LG) that we may be left behind in the smartphone race should we be ill-prepared for the market this year,” he said in a meeting with reporters yesterday. Nam is in Las Vegas to attend the Consumer Electronics Show, the world’s biggest tech trade fair.

He expected smartphones to replace mid-end feature phones, LG’s stronghold. “There will be either smartphones or low-tier handsets in the future … Feature phones, in which we have had strength so far, may lose ground over smarpthones,” he said.

His remarks underline challenges facing Korean manufacturing giants, which are weak in software and content, key to smartphones sales. Despite a manufacturing edge, LG, the No.3 handset maker, and second-ranked Samsung are falling behind their smaller rivals Apple, Research In Motion and HTC in the smartphone market.

He noted that the handset industry is shifting from devices to content and software, driven by smartphones, a computer like-device that allows users to surf the internet and download applications from the Web. “We face a number of tasks at a time when a paradigm is shifting.”

LG and Samsung each account for no more than five percent of the world smartphone market. Worse, the iPhone, which was recently allowed into the Korean market, has quickly steamrollered the domestic competition in its own backyard.

To this end, about half of all new LG smartphones will use Google Inc.’s Android operating system. Google recently entered the cell-phone market with the Nexus One, which could change the way the entire industry runs.

Until now customers have been able to purchase cell phones only through mobile service providers. When they switch providers they have to buy a new phone, as phones have built-in locks that enable them to work with only the specified network. Handset subsidies are offered, but they must commit to a contract that requires them to use the service for a certain period. Google is changing all this and is selling its phone itself. The Nexus One has no built-in lock, allowing users to choose whichever service they like.

[ snip ]

This is expected to change the very landscape of the mobile communications industry. The days of mobile operators controlling prices will likely come to an end soon. With customers able to freely choose the cheapest service, telecom companies will see their role shrink to mere suppliers of cellular networks and their profits drop accordingly. As companies like Apple and Google expand into the handset market with their own software, existing handset manufacturers will see their powers diminish as well. In 2009 Samsung and LG Electronics boosted their shares of the global cell phone market to the 30-percent level for the first time and pulled in record earnings. But they account for no more than 5 percent of the world smartphone market. They may be riding high now, but there is no telling when they might be knocked out of the saddle. The only way to survive is to innovate, innovate, and innovate.

January 7, 2010

Kim Yu-na and Mao Asada are not representative of their respective economies

Filed under: economics, sports — extrakorea @ 2:49 am

The Chosun Ilbo recently had an article proposing that Kim Yu-na and Mao Asada were representative of their respective economies. According to it, Kim and Korea have good presentation skills and Mao and Japan have good technical skills.
Rubbish. Kim is overflowing with technical skills. She regularly does triple-triple combinations. (That is, she performs one triple jump followed immediately by another triple jump.) While other skaters slow down before a jump, she actually speeds up. The reason that she has been so dominant and setting records is because of has both superlative technical and presentation skills. The fact that Mao Asada can do the triple Axel (a 3-and-a-half rotation jump) owes as much to sheer brute strength as it does to technical prowess. And the notion that the Japanese lack a sense of aesthetics is ridiculous.

January 6, 2010

North Korea is suffering runaway inflation

Filed under: economics, North Korea — extrakorea @ 1:32 pm

The Chosun Ilbo has an article about the runaway inflation that has taken place since their currency was reformed.

According to a North Korean source, 1 kg of rice cost about 30 won right after the currency reform but is now closing in on 1,000 won. The U.S. dollar was exchanged at the rate of 75 won to the greenback right after the currency reform but soared to 400 won in late December. There is speculation that it is now only a matter of time before the rate will reach 3,000 won, the same as the unofficial exchange rate of the old won.

The blog called One Free Korea has written, and continues to write, in detail, about this issue. Kushibo believes that this may be the straw that breaks the camel’s back.

January 5, 2010

Korean reunification could cost $5 trillion

Filed under: economics, North Korea — extrakorea @ 2:52 am

The Chosun Ilbo and KBS World both mention a recently published Wall Street Journal article that I had already seen thanks to both Kushibo and North Korean Economy Watch.

Even the best-case German model will cause South Koreans heartburn. Despite the $2 trillion West Germany has paid over two decades, Bonn had it relatively easy in the beginning. East Germany’s population was only one-quarter of West Germany’s, and in 1989 East German per capita income was one-third of the West’s. The two Germanies also had extensive trade ties.

North Korea’s per capita income is less than 5% of the South’s. Each year the dollar value of South Korea’s GDP expansion equals the entire North Korean economy. The North’s population is half the South’s and rising thanks to a high birth rate. North and South also barely trade with each other.

[ snip ]

I estimate that raising Northern incomes to 80% of Southern levels—which would likely be a political necessity—would cost anywhere from $2 trillion to $5 trillion, spread out over 30 years. That would work out to at least $40,000 per capita if distributed solely among South Koreans.

Who would foot such a bill? China is the greatest supporter of the current regime in Pyongyang, with trade, investment and economic assistance worth $3 billion a year. Even if that flow continues, it’s only a fraction of the $67 billion a year needed to equal $2 trillion over 30 years. Japan is willing to pay $10 billion in reparations for having colonized the North in the 20th century, but that too would barely make a dent.

That leaves international institutions like the World Bank as well as South Korea and the United States.

Sugar Daddy Sam and the IMF* to the rescue. Again. I wonder if South Koreans would be willing to give up their fancy cell phones and SUVs.

* who were vilified in the aftermath of the 1997 Asian Financial Crisis. To this day, South Koreans still refer to that event as the “IMF crisis.”

January 3, 2010

Upheld: Sale of Korea Exchange Bank to Lone Star was not illegal

Filed under: crime, economics — extrakorea @ 1:51 pm

From Yonhap News:

A Seoul appellate court on Tuesday upheld a lower court’s ruling that the 2003 sale of Korea Exchange Bank (KEB) to U.S. equity firm Lone Star Fund was not conducted at a below-market price, a verdict that cleared government and banking officials involved in the sale of breach of trust charges.

December 27, 2009

Over 26% of Koreans Plan to Buy Imported Cars

Filed under: economics, rapid cultural change — extrakorea @ 1:18 am

According to this article, over 26% of Koreans plan to buy imported cars. This is a far cry from when I first arrived in Korea. Back then, anyone who bought a non-Korean car was regarded as a national traitor. Such back-stabbers could expect to receive a vindictive tax audit (not to mention many “accidental” scratches).

The highest percentage of those surveyed, some 22 percent, said safety was the most important factor that figured into their purchase of a car, followed by design and fuel efficiency.

This is good news for Toyota, who plan to sell more cars in Korea.

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