Other interesting headlines August 31

- It is reported that the government is positively reviewing Zaytun Division’s extended staying in Iraq. The division is supposed to end its mission this December. Many point out that there is no justification or benefits coming from extended staying, especially at a time when other countries are withdrawing their soldiers from Iraq after the establishment of independent Iraqi government.

- One year after government’s 8.31 policy to cool down the property market, it seems that the government failed to achieve its intended goal; to pull down house prices in Kangnam area. Some apartment prices in the region even go up. While speculative moves died down a little bit, the overall construction market is sluggish especially in non-Seoul area and not much transaction is taking place.

- Government’s plan to enter US Visa Waiver Program by 2008 doesn’t seem to be easy since the rate of Korean visa application rejected by the US amounts to 3.5 per cent, higher than 3 per cent, a requirement to enter the program.

- The government and the Uri party agreed to offer a comprehensive health examine for all soldiers from 2008.

- ‘Light alcohol war’ will be spread into the beer market as well. The country’s two biggest beer companies, Hite and OB, will launch the end of next month new products with lighter alcohol proportion. .

- In-house couples are most widely seen in the financial sectors and IT industry. 160 employees of LG card, 7 per cent of the workforce, are dating co-workers while there are 100 couples in LG CNS and 90 couples in Samsung SDS. Shin Kyoung-soo, CEO of a human resources company, says “in a company with higher salary and more stable employment environment, there are more in-house couples.”

- It is reported that 5 TV, France national TV, was strongly complained by the Japanese government about broadcasting a documentary including the content that Dokdo belongs to Korean territory. But the documentary was on air on August 18 as scheduled.

- Samsung Electronics unveiled its new ultra-slim cell phone editions in Paris Louvre Museum in France, for the first time in the museum’s history to allow a company to have a commercial event.

- According to a report by BoK, company sentiment is on the continuous decline, reaching its lowest point in 20 months. The sentiment is an indicator showing how local companies feel about the market environ0ment.

Local paper headlines August 31

1. Chosun Ilbo

- Korean Teachers and Educational Worker’s Union decided in its regular meeting to take a collective holiday the end of October in protest against teacher evaluation, incentive differentiation, and Korea-US FTA.

- According to Vision 2030, the government will pour W1100 trillion into social welfare system by 2030 to raise welfare spending to 40 per cent of national budget, up from the current 25.2 per cent. The project aims at tripling GDP, ranking 10th in the world in terms of national competitiveness and life quality by the year.

- The prosecution arrested Kim Min-seok, the chairman of Korea Computer Game Industrial Association, on charges of bribing government officials for business favors on behalf of the gaming industry and receiving kickbacks from game developers.

2. Maeil Business Daily

- Roh Moo-hyun said of Vision 2030, “it is a comprehensive national management strategy report including not only about welfare system but also about technology innovation, human resources development, aggressive globalization, and social capital expansion.” “I want the report to provide discussion subject to the public for a new national management paradigm.”

- Samsung Electronics will unveil its 4G mobile technology for the first time in the world. With the technology, users can download a movie just for 3-4 seconds. The company expects it can commercialize the technology by 2010.

- Federation of Korean Trade Unions walked out of ILO meeting currently taken place in Pusan, saying “while a roadmap for better relations between company and labor union is being discussed, Labor Minister unilaterally revealed part of the discussion.”

- Ssangyoung finally stoke a deal with its labor union and the company plants will be up and running again from tomorrow.

- Korea is expected to have more voting shares in the international monetary fund (IMF) from current 0.77 per cent to 1.35 per cent, making the country have bigger say in running the organization.

other interesting headlines_August 30

- Rumors are whirling that North Korea leader Kim Jong-il visited China as some media reported that North Korea’s special train was spotted to arrive in China. Regarding the matter the government said it can’t confirm whether it is true. But one government official familiar with the matter said” we received some intelligence regarding Kim’s visit to China.”

- CEO of Lone Star said in an interview with Bloomberg that the deal with KB can be cancelled if the prosecutors’ investigation doesn’t finish by September 16. Some say his remark aims at putting blame on the Korean government and assuaging US fund investors.

- Prime Minister Han Myung-sook said today, “there will be no need to increase tax burden by 2010.” “Tax raise should be based on national consensus.” Vision 2030, the government’s long-term social welfare project, is “aimed at providing medium to long term welfare vision to people and openly discussing the matter,” said the prime minister.

- Regarding the GNP’s recent remark that the early transfer of wartime command is a present that North Korea is most happy about, a North Korean website severely criticized the remark, saying it is very provocative and absurd. “The transfer is meaningless as long as the US continues occupying South Korea by force.”

- Parents will be able to check out information on the performance of their children via internet. The ministry of education offers an internet service for parents from September 1.

- Ssangyoung Motors failed to strike a deal with its labor union. The strike has been going on since July 14, causing the company W380 bn in sales loss.

- Supreme prosecutor’s office of Suwon district arrested three people on charges of running illegal internet gambling sites and developing gambling software. It is the first time for prosecutors to actually arrest a game program developer.

- According to Payopen, internet site for salary information, financial sector employees receive the highest amount of salary 10 years after entering the company, with the average yearly salary amounting to W40.31 m, followed by law/accounting/advertising/PR/ company workers with W40.06 m and computer/internet company employees with W38.45 m.

Local paper headlines August 30

1. Chosun Ilbo

- Grand National Party’s planned meeting aimed at urging the government to stop pursuing wartime command transfer was botched due to internal disputes and lack of party members’ participation. The party leadership is supposed to issue a statement that Korea and the US should stop discussing the transfer and rather come up with a blueprint for stronger Korea-US alliance.

- A research by Seoul National University shows that the birth rate is lower in areas with high unemployment rate.

- Stuart A. Levey, the Treasury Department's undersecretary for terrorism and financial intelligence, said North Korea is financially isolated more than ever as many countries follow US-led economic sanctions on the regime.

- Prime Group is named as a preferred bidder in the takeover of DongA Construction Co. The price tag will be around W650 bn- 700bn.

2. Maeil Business Daily

- SK Telecom is to help China develop 3G mobile technology standard known as TD-SCDMA and signed a preliminary contract with China’s National Development and Reform Commission yesterday.

- Korea’s big electronics companies won a series of international patent lawsuits, which demonstrates that Korean companies have obtained high-level of technology. LG Electronics won a patent lawsuit filed by Whirlpool while Samsung Electronics received a court ruling that Samsung didn’t infringe on Matsushita’s patent on D-ram.

Defense Ministry's Position

"It is far from true that taking back wartime command control will require more defense budget and increase taxes,” said the Ministry of Defense today in its report titled ‘Misunderstanding regarding Regaining Wartime Operational Control and Defense Budget.’

The ministry says under the current plan, only command structure will change while keeping the military budget unchanged in the case of emergency so the move is unlikely to incur an additional defense budget.

But some point out if Korea becomes fully responsible for wartime command control between 2009 and 2012, a bit earlier than originally planned, the military might need more budgets to increase deterrent power against North Korea.

other important headlines_August 29

- Prime Minister Han Myung-sook offered an apology for ‘the Sea Story Gate,’ saying “I feel great responsibility for the matter and I apologize for people’s suffering and concerns. In a letter for apology, she said “as the gambling places were spreading throughout the country, it caused severe damages on the lives of ordinary people and the economy.” “There must be several reasons behind this, but more than other things the government should take responsibility for inadequate handling of the possibility that some gambling places can exploit loopholes.”

- A survey commissioned by Joongang Ilbo finds out that Koreans have the worst sentiment towards business and market economy than Chinese and Japanese do. As for company-friendly environment, Korea again turns out the most difficult country among the three due to excessive demand for business sovial responsibility and government regulations. Meanwhile 77 per cent of Korean respondents say they are proud of Samsung, showing two different attitudes towards Chaebol.

- In the North American market, Samsung’s extreme-slim phones, A900 and T509, are becoming so popular, taking number two spot after Motorola, overtaking Nokia. According to Strategy Analytics, Samsung Electronics sold 6M cell phones in the market, selling 0.2 M phones more from a year earlier. Market share for Samsung is 15.5 per cent, still much lower than that of Motorola with 43.8 per cent.

- According to a survey on 561 listed companies, only 49.7 per cent of the companies say they have plan to hire new employees for the second half, which is 11.8 per cent down from a year ago. The reduced hiring plan is due largely to worse-than-expected economy outlooks.

- Cheon Ki-won, pastor of Doori Hana Missionary Church, said in an interview with Radio Free Asia, about 30 North Korean defectors is to seek an asylum in the US soon.

- The US seems to finalize its investigation into North Korea’s overseas financial transactions and will start re-launching severe economic sanctions.

loca paper headlines_August 29

1. Chosun Ilbo

- Korea’s economy measured by GDP stands at 12th in the world, overtaken by Brazil, one notch down from a year earlier.

- According to Military Reform 2020, which includes the regaining of wartime command control from the US, the aggregate cost per capita for ‘independent’ military defense by 2020 amounts to W12.5 bn.

- The National Assembly is to revise law to reduce property transaction tax in order to lessen tax burden.

- The prosecution swooped the house of former Cheong Wa Dae official Kwon Ki-jae whose mother is accused of holding a 0.49 per cent stake in one of the gift certificate issuers.

- Some lawmakers are confirmed to have received political donations from gift certificate issuers from 2004-5.

-Samsung Card, the country’s third largest card company, is set to push ahead with flotation the end of next year. The company is holing a controlling stake in Everland, Samsung Group’s holding company. A Samsung official said “the specific date and methods have yet to be decided, but we see the end of next year,” and “the listing is for management improvement.”

2. Maeil Business Daily

- According to a survey on 77 CEOs, CEOs consider rising Chinese companies and bad relations between company and labor union as the biggest threat to competitiveness. CEOs underline that local companies should brace themselves for the time when China, armed with strong capital power, aggressively pursues hostile M&As.

- Park & OPC, a local internet solution development company, has filed a lawsuit against Google for patent infringement.

- Business deregulation efforts by the government for reinvigorating the economy and creating jobs are in a deadlock due to lack of cooperation between government agencies and self-interest prevailing in the officials involved.

- LG Group reaffirmed that the name, LG Card, will not be allowed to be used by Shinhan Financial Group after the company finalizes the takeover process.

Defense Minister stands firm in regaining wartime operation control

Amid increasing concerns for Korea’s capability to handle wartime operation control, Defense Minister Yoon Kwang-woong today showed a gesture of easing public worries by confirming that US army will continue to stay in Korea even after the US fully relegates wartime operation control to Korea.

The minister, however, made it clear that the government has no intention to move an inch from its current position to push ahead with taking back wartime operational control. According to a partially unveiled roadmap out today, the government aims to be fully capable to manage operational control on its own by as early as 2012. The US has once showed its willingness to give it back to Korea even before 2009 as long as Korea is ready. It is reported that the two allies are in close talks to set up an independent system which helps the two countries continue closely coordinating security issues such as joined grills, risk management, information sharing, and wartime co-operation.

GNP leader Kang Jae-sup, meanwhile, voiced concern over the transfer and said the talk for independent operational control is in itself a move to weaken Korea-US alliance and increase possibility to totally disband United States Forces Korea in the future. He urged the talk poses a danger to national security at a time when Korea is not ready at all to cope with urgent security matters as seen in the recent North Korea missile firing.

Ji Choong-ho is sentenced 11 years in prison

Seoul western district court today sentenced 11 years in prison for Ji Choong-ho, who slashed the face of Park Geun-hye, former leader of the opposition GNP party, with a box cutter, on charges of injuring, violation of election laws, blackmailing, and damaging public buildings. But the court gave a verdict of not guilty for his attempted murder charge, saying “there isn’t evidence that proves the accused’s intention to murder.

LG's Chocolate makes a debut in the US

Chocolate phone, LG’s ambitious sleek slider targeting up-market, makes inroads into the US market. LG Electronics has successfully launched the phone in Europe, Asia, and Central Asia since early May, selling more than 2 million worldwide. “We reckon music phones are increasingly on demand in the US market so we greatly enhanced Chocolate’s music-playing functions,” said the company.

Hyundai's dismal sales report for July

Recent labor strike took a heavy toll on the country’s biggest carmaker. Hyundai is overtaken by GM Daewoo in monthly sales records, for the first time in its history. Hyundai labor union staged partial strikes throughout July except for only one day whereas GM Daewoo’s partial sit-in lasted only for four days. Reno Samsung which does not have union saw its July sales up 40 per cent year-on-year.

Hyundai’s domestic market share in July hit a record 8-year low with a sales number totaling 28,097, down 46.4 per cent from a year earlier.

Its total sales were 128,489, down by 42.4 per cent from a month earlier, and 36.7 per cent year-on-year.

Former President speaks out on North Korea

Former President Kim Dae-jung said of North Korea’s recent recalcitrant behavior:

North Korea is doing things that put itself to a disadvantage;
I don’t know what North Korea is thinking and (firing missiles) only makes hard-liners in the US and Japan clapping their hands in happiness.

On the US attitude towards the regime, he underlines:

The way the US treats the regime is not wise. The US should talk to North Korea and by doing so, the regime can change;
The US is imposing economic sanctions on the North, but when ordinary people in the North feel more reduced to poverty, they do put the blame on US sanctions, not on the regime;
Military punishment will not be successful because US military capability is not up to the level that can effectively constrain the regime. Moreover South Korea and China won’t let it successful.

As of Korea-US relations, he gently suggests:

We are the third largest US ally in terms of the number of army dispatch to Iraq but the US is grumbling about minor things. So we have to persuade the US. Korea-US relations should be based on a give-and-take.

Finally he says of his suspended visit to the regime, “When the North tells me it wants to hear what I have to say, I can go. Otherwise, I can’t unilaterally say I will come,” indicating he wouldn’t like to go unless invited.

Koreans rosy about GDP growth

According to a poll on 500 Koreans conducted by Korea Chamber of Commerce and Industry, 98.7 per cent of respondents are positive about Korea being able to enter the ranks of $30,000-GDP per capita country bracket in ten years. As of 2005, GDP per capita stood at $16,291.

Most of respondents, however, don’t see highly the country status, giving 62.4 out of 100. Asked what should be done to become a developed country, 38.5 per cent points to dissolving social discord, followed by creating company-friendly environment (21.8%) and improving government’s competitiveness (19.7%).

As critical issues related to social discord, social disparity takes up 48.5 per cent, followed by labor union problems (20.2%) and regional disputes (14.8%).