Date: January 1, 2011
Source: JoongAng Daily
Government leaders and corporate chiefs yesterday unveiled their hopes and predictions for the Year of the Rabbit. Bank of Korea Governor Kim Choong-soo said in his New Year's message his top priority will be to maintain price stability.
He warned that global economic uncertainties remained and Korea should be prepared to respond quickly to fast-changing economic conditions.
His remarks are widely interpreted as a hint that the BOK will likely raise the key interest rate, after increasing the rate by 50 basis points to 2.5 percent in the second half of 2010.
Korea is facing growing inflationary pressure because of its rapid economic recovery and a rise in raw material costs.
It has raised its inflation projection for 2011 to a three-year high of 3.5 percent from 2.9 percent in 2010.
Financial Supervisory Service Governor Kim Jong-chang said that Korea will need to deal with continuing risks, such as the European debt crisis, the slow economic recovery in advanced countries, a sluggish property market and high household debt in Korea.
Yoon Jeung-hyun, the Minister of Strategy and Finance said that attention should be focused in the new year on price stability and maintaining the economic recovery, while encouraging closer cooperation between the conglomerates and small and medium-sized businesses.
Cho Suck-rai, chairman of the Federation of Korean Industries said that Korea has scored notable successes in 2010 with the G-20 Summit, an economic growth rate of 6 percent and record exports. He said, however, continuing tensions with North Korea and high debt levels remained a problem.
He urged that regulations governing business should be reduced and more free trade agreements should be signed in order for Korea to become an advanced country.
SaKong Il, head of the Korea International Trade Association, said that his goal was to create a “Korea premium” to replace the “Korea discount” through the signing of more trade pacts.
He predicted that trade volume could exceed 1 trillion won ($889.8 million) this year and said Korea should focus attention on China.
Sohn Kyung-shik, chairman of Korea Chamber of Commerce and Industry, said a new culture should be created to support coexistence between big business and SMEs, while efforts should focus on improving the quality of products, strengthen research and development programs, and make innovative changes to management.
Date: January 2, 2011
Source: Hankyung Economy
Korea's economy in the first half of 2010 was estimated to be the world's 13th largest. According to the Finance Ministry and Statistics Korea, Gross Domestic Product (GDP) between January and June of last year was $445.5 billion.
That is the 13th largest among 33 major countries. It is one-sixth the size of Japan's or China's and similar in size to Australia's and the Netherlands'.
The world's largest economy was the U.S. with a GDP of $7.29 trillion. Japan and China trailed behind at $2.63 trillion and $2.53 trillion, respectively.
Germany ($1.63 trillion), France ($1.28 trillion), the U.K. ($1.10 trillion) and Italy ($1.02 trillion) all saw their GDPs exceed $1 trillion.
Brazil ($977 billion), Canada ($775.1 billion) and Russia ($734.9 billion), with GDPs below $1 trillion, were within the top 10 countries by GDP size.
Closely ahead of Korea's economy was Spain, with $699.8 billion, and Australia, with $596.5 billion.
The ministry expects Korea to outpace Spain and Australia probably within five years. Korea can narrow the gap with Spain and Australia since the GDP difference with these countries is within $200 billion and Korea's economic growth is high.
Closely trailing behind Korea is the Netherlands, with $389.4 billion, and Turkey, with $353.4 billion. Korea's economy has the upper hand over such countries as Switzerland, with a GDP of $252.6 billion, Belgium ($230.6 billion), Poland ($230.5 billion) and Taiwan ($204 billion).
“The rankings of GDPs of each country in the first six months continued through the end of 2010,” said a Finance Ministry official.
“While emerging countries including China are seeing the size of their economies expand rapidly, Korea's growth has been slowing down and therefore it is important to foster new growth engines.”
Date: January 3, 2011
Source: Newsis
Consumer prices rose 2.9 percent in 2010 mainly because of a sharp increase in the prices for fresh produce in the second half of the year, Statistics Korea said yesterday.
Although consumer inflation stayed below the government's inflation target of 3 percent for last year, the inflation rate for fresh food prices was the highest in 16 years at 21.3 percent.
Inflation in December was 3.5 percent, while food prices were up by 33.8 percent. Korea suffered a sharp rise in food prices in 2010 because of unusually bad weather that damaged crops.
The inflation rate for 2010 was only slightly higher than that for 2009 at 2.8 percent.
Between 2005 and 2007, the inflation rate was steady between 2.2 percent and 2.8 percent, but it spiked in 2008 to 4.7 percent because of the global financial crisis.
The onset of poor weather conditions last year contributed to the inflationary pressure.
The price of radishes jumped by 98.1 percent, followed by Napa cabbage at 80.8 percent and green onions by 67.8 percent.
In December, cabbage prices shot up by 238.6 percent, while the cost of radishes increased by 177.7 percent. In addition, consumers are facing higher costs because of a rise in prices for crude oil, gold and other natural resources.
Gasoline prices last year increased by 7.9 percent, diesel prices 8.8 percent, liquid petroleum gas prices 14.8 percent, and kerosene prices 10.7 percent.
Statistics Korea said, however, that price rises for other products remain moderate.
Prices for manufactured goods rose 3.1 percent while services rose 1.9 percent in 2010. “The main reason why prices rose so much in December was due to the supply problems with the rise of international oil prices and a fall in supplies of fruits and fisheries,” said an official from the Ministry of Strategy and Finance, which will offer anti-inflation measures.
- The country has the best access to global markets among Asian nations
Date: January 4, 2011
Source: Hankyung Economy
Korea is hoping in 2011 to reap the benefits of the free trade agreements it concluded last year with the European Union and the United States, two of the world's largest trading blocs.
The EU trade pact is scheduled to take effect on July 1. Though it is still uncertain when the Korea-U.S. free trade deal, known as Korus, will go into effect because it still must be approved by the legislatures in both countries.
Most observers think passage of Korus is likely this year despite protests about the agreement in Korea. Supporters of the deal in the U.S. argue that it will benefit both sides in the long-term and will boost Korea's heavily export-dependent economy in terms of job growth, while offering consumers more choices on imported products.
The FTA with the EU was signed in October 2009 despite reservations among European automakers about what they believed was overly favorable treatment of Korean car imports. Korea became the first Asian country to sign an FTA with the EU, which makes up about 30 percent of the global economy and is the world's single biggest trading bloc with a combined gross domestic product of $18.3 trillion.
The FTA with the EU is potentially more significant to Korea than Korus because Europe is already a slightly bigger market for Korean products. The EU is Korea's second largest trading partner after China.
The trade deal will eliminate tariffs on 99.6 percent of traded products.
The government estimates that the free trade agreement with the EU will boost Korea's growth rate by 5.6 percent over the next 10 years and create 253,000 jobs.
The government also said that the trade surplus will increase $361 million per year with exports expected to rise by $2.5 billion per year and imports expected to rise by $2.2 billion.
The biggest result from the trade pact will likely be increased exports of Korean autos to the EU because the agreement will eliminate a 10 percent import tariff.
Other Korean products should also benefit because EU tariffs are generally higher than those in the U.S. But Korean agricultural and fisheries industries will see increased competition from European producers.
“Many say that agriculture and fisheries will be hit hard because of the FTA, but when we look at previous cases such as Chile, the damage was not as bad as most people expected,” said Cho Sung-dae, a senior researcher at Korea International Trade Association.
“People in these sectors should not be frightened or oppose the situation, but instead try to adjust by using government support programs.” In December, Korea and the U.S. agreed to revisions of the original Korus agreement, which was signed in 2007. Although the trade pact had been approved by the relevant National Assembly committee in Korea, the U.S. Congress did not take any action on it because of objections from the U.S. auto industry.
In last month's negotiations, Korea agreed to compromise on auto-related issues. It allowed the U.S. to maintain a 2.5 percent tariff on Korean auto imports for four years instead of eliminating them immediately.
In addition, Korea agreed to cut in half its 8 percent tariff on U.S. cars immediately and the remainder after four years once the trade pact is passed. U.S. cars were effectively exempt from Korean emissions and safety standards, which was been seen as a nontariff barrier.
The U.S. offered face-saving concessions in return, including allowing Korea to extend a tariff on U.S. pork products for two years and abandoning a demand that Korea should relax import restrictions on U.S. beef.
Korean trade officials were criticized for dropping an earlier pledge not to revise the original FTA, but analysts say the compromise would not affect the overall outcome of the pact in the long-term because the elimination of tariffs contained in the 2007 agreement will be implemented, just over a longer period of time.
The conclusion of trade negotiations is also seen as a boost for Korea's geopolitical status because it strengthened its alliance with the U.S., through Korus, as Seoul confronted provocations from North Korea.
The U.S. viewed the revised agreement as ensuring that it would not lose market share in the Korean market after the EU FTA goes into effect on July 1, while it improves its trade ties with Korea in competition with China, which is Korea's single largest trading partner.
Attention will now focus on the legislative fate of Korus in the U.S. and Korea. Despite criticism from opposition parties in Korea, the trade pact is expected to be approved by the National Assembly because President Lee Myung-bak's Grand National Party holds a majority of the seats.
A bigger challenge will be gaining passage in the U.S. Congress. The Obama Administration is expected to submit the trade pact early this year in hopes of passing it by mid-year, before the run-up to the U.S. presidential election in 2012 starts to disrupt the legislative action.
The two trade pacts with the EU and U.S. will give Korea unprecedented access to global markets among its Asian competitors. Including Korea's other FTA deals, including that with the Association of Southeast Asian Nations, these three trade pacts cover about half of Korea's merchandise trade and 30 percent of total trade volume.
Following this progression, Korea's next goals would be to try to conclude free trade deals with China and Japan.
But Seoul remains cautious about a pact with China as it studies the merits of a deal and its effect on local industries, particularly agriculture.
Korean industry remains divided on the issue, with some fearing they will lose exports to China after Beijing reached a trade deal last year with Taiwan, a keen Korean competitor.
Other industries worry about losing market share to Chinese imports if an FTA with Beijing is signed.
Korea restarted working-level talks in September on an FTA with Japan and will continue them this year - negotiations originally broke down in 2004.
Japan favors an FTA with Korea, following Seoul's deals with the EU and U.S. In addition, Korea is holding FTA negotiations with Australia, Colombia and Turkey, after it signed a trade agreement with Peru last year. Economists believe that the FTAs could also help improve productivity levels in Korea's heavily regulated and inefficient agricultural and service sectors.
“I think it is close to the point where our industries, especially in agriculture, need to sharpen their competitiveness and not feel threatened by free trade,” said a Ministry of Foreign Affairs and Trade official.
“If such conditions are achieved, Korea will probably have a better track record in the number of FTA deals signed.”
Date: January 4, 2010
Source: JoongAng Daily
Trade volume will exceed $1 trillion this year, with exports expected to be more than $500 billion, said the Ministry of Knowledge Economy in its annual forecast.
The ministry said that Korea became the world's seventh biggest exporter in 2010, up from ninth place in 2009, as trade volume reached a record high.
Korea had $467.4 billion in exports in 2010, up 28.6 percent from a year earlier, while imports reached $425.7 billion, up 1.8 percent. Korea and China have been the only major exporters that have recovered to pre-2008 global financial crisis levels.
Officials said exports to emerging countries, including China, Latin America and Southeast Asia, were on the increase.
Imports have grown because of rising costs for raw materials and capital goods. The ministry said that 2011 presents new opportunities for Korea, with exports expected to reach $513 billion and imports $488 billion.
But the trade surplus is expected to fall to $25 billion. When the trade volume reaches $1 trillion this year, Korea will be only the ninth country to reach this milestone. Other countries have included the United States, Germany, China, Japan, France, Italy, United Kingdom and the Netherlands.
Countries with $1 trillion in trade are seen as major economic powers. While it took other countries 26.4 years to reach the $1 trillion milestone from the $100 billion mark, it took Korea 23 years.
In the case of expanding from $500 billion in trade volume to $1 trillion, it took the other countries 8.4 years, but in Korea's case it was six years.
“In 2011, a new $1 trillion trade era will open as we will fully utilize developing new markets as well as the free trade agreements with the U.S. and the European Union,” said the ministry.
“We will become firmly established as one of the trade giants and create more jobs as well as improving the quality of our internal economic stability.”
Meanwhile, the Korea International Trade Association announced three key goals for 2011's trade environment, as it expected exports to continue to grow but warned of slimmer profit margins.
KITA said Korean exporters should advance further into emerging markets, strengthen product competitiveness and avoid low-value exports.
In a recent survey of 900 KITA members, 41.9 percent said Korea will have better product competitiveness compared to its rivals, while 28.8 percent said they saw emerging markets as key opportunities for Korea.
The companies said that a rise in raw material prices and a strong won pose risk factors. Nearly three-fourths of those surveyed expected an increase in Korean exports this year, with more than 50 percent saying the growth rate will be over 5 percent.
KITA said it expected only a limited increase in export prices. Computers and machinery were selected as the two top products to increase the most.
“In order to prepare for the coming fight to maintain export profit margins, industries should use currency insurance or forward exchange contracts and minimize losses by securing supplies of raw materials in advance,” said a KITA official.
“The government should also expand its support for currency management and ways to secure raw materials,” it said.
The official added that “both public and private sectors must make good use of the heightened reputation for Korea that resulted from the G-20 Seoul Summit and pursue a drive to create a 'Korea Premium' in order to counter possible obstacles in the export environment.”
KITA said Korean exporters have gained a reputation of providing high quality products at reasonable prices.
Date: January 5, 2010
Source: Yonhap News
Foot-and-mouth disease (FMD) is spreading throughout South Korea despite extensive quarantine efforts.
The farm ministry and local governments confirmed four fresh outbreaks earlier in the day, raising the confirmed number of officially counted FMD cases to 85 after the disease was first detected on Nov. 29.
Of the four, two were at cattle farms in Gangwon, one in Uijeongbu, just north of Seoul, and one at a pig farm in Goesan, in the country's interior about 157 kilometers southeast of the capital city.
The Goesan outbreak marks the second confirmed case in the land-locked Chungcheong Province, following a case reported at a nearby cattle farm in Chungju late last month.
Quarantine authorities said all 284 cows and 2,700 pigs on the farms are to be destroyed, along with livestock within a 500-meter radius of the outbreaks, to stem the spread of the highly contagious disease.
The latest series of outbreaks are the most severe in South Korea's history with the disease having hit five provinces and the city of Incheon, the country's second-largest seaport.
Seoul has ordered the culling of over 778,850 animals on 2,769 farms while 700,000 cattle are slated to receive vaccines.
Vaccinations are only used as a last resort due to extra costs and because they slow down the process of the country regaining its FMD-free status from the Paris-based World Organization for Animal Health (OIE).
The farm ministry, meanwhile, said it seriously is considering a move to vaccinate pigs to help combat further spreading of the disease. "The issue was touched at a recent meeting of the livestock quarantine consultation committee," a source said without going into details.
Initially only cattle, which are more vulnerable than pigs, were to be given shots, but experts recently conceded that more comprehensive vaccination measures may be needed.
Because pigs are raised in larger-sized farms, an outbreak can quickly leads to a surge in the number of animals that need to be culled. The country is raising some 10 million pigs and less than 3 million cattle.
FMD is highly contagious and affects all cloven-hoofed animals, such as cattle, pigs, deer, goats and buffalo. It is classified as a "List A" disease by the OIE, although it is harmless to humans. The country was hit by the disease in 2000, 2002 and two more times early last year.
Before the latest set of outbreaks, Seoul had used vaccines only once, in 2000, because it had little experience with the disease.
Date: January 10, 2011
Source: Yonhap News
The government yesterday intensified its response to the outbreak of foot-and-mouth disease (FMD), extending the use of vaccines to all animals in infected regions in an effort to protect the last four virus-free provinces in the country - North and South Jeolla, South Gyeongsang and Jeju Island.
According to the government, 2.17 million cows and 611,000 pigs will be vaccinated nationwide. The Ministry for Food, Agriculture, Forestry and Fisheries held an emergency meeting yesterday and said it will conduct vaccinations on all farms in Gyeonggi, Incheon, North and South Chungcheong, Gangwon and even FMD-free North Jeolla.
“We found additional confirmed cases of FMD at a hog farm in Bonghwa, North Gyeongsang, and a cattle farm in Cheongwon, North Chungcheong,” the ministry said. A cattle farm in Daegwallyeong, Gangwon, was also found to have the virus, it said.
To prevent the highly contagious disease from spreading to uninfected regions, the government demanded that cities in neighboring virus-free areas vaccinate all of their livestock.
The North Jeolla government also held a meeting yesterday and said that it will vaccinate all of its healthy animals within a week. “We will finish vaccination for 194,600 cows and 69,400 pigs in our six cities, Gunsan, Iksan, Jeongeup, Gimje, Buan and Muju, within a week,” said Governor Kim Wan-joo.
Kim said the vaccination is needed to protect not only the region but South Jeolla as well.
Since a cattle farm in Andong, North Gyeongsang, was found to be positive for the virus on Nov. 28, the government has been unable to curb the relentless spread of the disease.
The central government said about 1.28 million animals have been or will be culled and it is now thinking of allocating about 1.3 trillion won ($1.1 billion) as compensation for farmers.
Meanwhile, several cases of avian influenza A (H5N1) have been reported, including a duck farm in Yeongam, South Jeolla, that was confirmed yesterday to be infected. Seven poultry farms have tested positive for the influenza so far.
“If wild birds, such as migratory birds, were found to be infected with AI virus, the virus is highly likely to transmit to domesticated birds a week afterward,” a ministry official said. “Since we found an increasing number of wild birds infected with the influenza, we think it would be difficult to curb the virus [in domesticated birds],” the official said.
Office of Commercial Affairs, Royal Thai Embassy in Korea
Source : http://www.depthai.go.th