L2W - Ferry Fugitive, Election Season, & Chinese Cash

1. National

1) Ferry owner under most wanted list

Yoo Byung-eon, the owner of ill fated ferry operator and leader of a religious cult, is being chased by the police with 500 million won ($500K) on his head. Besides culpability in the ferry disaster in April, Yoo is suspected of embezzling 129 billion won from his companies, and selling calendars with his photos at 5 million won ($5,000) a piece to his companies. They include 44.6 billion won he transferred overseas illegally. It is reported that Yoo is attempting to stow away out of Korea with his 2nd son.  The government plans to seize his asset to pay for the cost incurred by the ferry accident as well as the jail sentence for him.

   

Interested in earning the 500 million won bonanza instantly? Open your eyes wide, and look for a gentleman who is 99% copy of Col. Sanders of Kentucky Fried Chicken 

2) June 4 local election heats up

Candidates for the opposition New Politics Alliance for Democracy are leading the key three regions in Korea, Seoul, Incheon and Gyeonggi Province, for June 4 local elections, according to the latest poll. In Seoul, the NPAD’s incumbent mayor Park Won-soon has a clear lead over ruling Saenuri party’s Chung Mong-joon, with 51% vs. Chung’s 35.4%. In Incheon, the incumbent candidate from NPAD is leading by comfortable 10%, while it is neck and neck with less than 1% gap in Gyeonggi Province. Chung Mong-joon, the chairman of Hyundai Heavy Industries, used to have a slight lead over Park Won-soon, but had to watch his popularity drop because of his teenage son’s comment on his Facebook after the ferry disaster. He wrote “Koreans must be uncivilized to throw water bottles at the Prime Minister, and swear four letter words at the president who were at the scene to urge quick rescue effort.” Experts think the ruling party and President Park Geun-hye are bearing the brunt of public anger over the ferry disaster.

   

Opposition party leader claims that president Park Geun-hye has to be totally responsible for the Apr 16 ferry disaster. As there has been no ferry accident since then, the president must be doing a pretty darn good job these days then. 

2. Economy

1) Park attends international debut of Korean reactor

President Park Geun-hye attended the event celebrating the installation of a Korean made nuclear reactor in U.A.E on May 20. Built by Doosan Heavy Industries, the reactor is the first to be exported overseas. Korean companies have won U$18.6 billion worth of orders for 4 reactors until 2020. The two countries made diplomatic ties in 1975, and the relationship got a momentum in 2009 when Korea won the deal to build four 1,400 megawatt nuclear reactors at $20 billion by 2020. After the ceremony, Park made a visit to a Korean military base near Abu Dhabi where Korean soldiers are training U.A.E forces as part of the nuclear deal. 

   

Kim Jong-un must be complaining why South Korea can make and export nuclear reactors freely, while he becomes an Adidas soccer ball in Brazil World Cup to do the same. Well, it would O.K if Col. Sanders has a knife in his kitchen, but not, if Ted Bundy has one in his pocket. 

2) Much Chinese money falling in Korea

Some 4.3 million Chinese tourists visited Korea last year, spending 3.75 trillion won with their credit cards, to Shinhan Card, an eye popping increase of 82.7% from 2012. The rise was especially notable in plastic surgery for which Chinese visitors spent 65 billion won last year, up 85% and accounting for 47% of total spending by foreigners at Korean hospitals last year.  Others Chinese tourists spent more were skiing and leisure activities that went up 103%, superstores with 38% up and cloth boutiques with 31% increase. 

  

K-Pop culture has become very popular in China. When actress Chun Jee-hyun whispered to her boy friend man in a Korean soap opera titled ‘You who came from stars,’ saying “Chicken with beer is the best on a snowy day ” in Feb this year, the demand for chicken and beer up went up so high all over China that there were as many as 3 hours of long lines in chicken restaurants in China, a good thing for Chinese chicken restaurants which had been suffering from bird flu epidemic. Col. Sanders has lost his public enemy No.1 status to the pretty Korean actress among Chinese chicken. 

3. Auto Industry

1) Kia celebrates its 30 million vehicles 

Kia Motors announced its global sales will surpass the 30 million milestones this month, 52 years after its first three wheel light truck K-360 rolled off its Sohari plant near Seoul in 1962. As end of this April, Kia had sold 29.9 million vehicles. Kia surpassed sales of 10 million in 2003 and 20 million in 2010. Its subcompact Pride, which was introduced in 1987 and sold in the U.S as Ford Festiva, was its best seller with 3.46 million units sold. Ironically, Kia’s growth in sales got stronger since it went belly up, and then bought by Hyundai in 1998.

   

My family owes a lot to the K-360 as it was what my father had driven to deliver goods in the 60’s and 70’s to bring bread for the family. As per K-360 name itself, K is not from Kia, but from a Mazda model code. What about 360? It is not from 360 degree panorama view, but from its 357cc engine displacement. 

Regards,

H.S.

L2W - Ferry Sorrow & Economics, High Won, & O in Korea

1. National

1) Korea still in sorrow

The sadness of Apr 16 Sewol ferry incident has continued, with 275 dead and 29 still missing. A principle committed suicide out of shame he was save while many of his students have not. The Prime Minster had to submit his resignation, and President Park Geun-hye apologized for the government’s initial handling of the disaster. Outraged by KBS newsroom chief’s personal comparison of the Sewol tragedy to traffic accidents, the families of the victims staged a sit-in in front of the Blue House, demanding President Park to fire the head of KBS and to meet with them. Another tragedy also occurred as one rescue diver lost his life in his efforts to retrieve the victims from the water. Nearly 50% of news time is still about the ferry incident, nearly a month after the incident.

It is an irony that anti-government forces are taking advantage of the tragedy to overthrow Park’s regime, harassing Park to step down in street protests, but there are no protestors at all in front of the headquarter of Chonghaejin, the ferry operating company. It’s like Americans blaming George Bush and Whitehouse for 9/11, instead of Bin Laden and Al Quaeda.

2) Barack Obama in Korea

Mr. Obama made a two day visit to Korea on Apr 25. He consoled the families of the ferry boat victims, sent a strong message to Kim Jong-un not to tinker with nuclear tests, and agreed to delay South Korea’s takeover of wartime operational control, currently scheduled for 2015, during the visit to the U.S. Army base in Seoul with President Park. He also touched on diplomatic issues, bringing up China’s role to better control North Korea, and mentioning “comfort women was a terrible violation of human rights.”

Kim Jong-un must be ticked off by Obama’s comments in Seoul. Soon after Obama’s visit, North Korea’s news agency poured racial insults to Obama, like “Obama is a monkey to live in a zoo in Africa” or “Obama is a crossbreed.” Kim Jong-un should learn from Donald Sterling of LA Clippers on how damaging it can be to make racial slurs to the Americans.

2. Economy

1) High Won to cut export profits

With the constant increase of Korea Won against the U.S. dollar, export driven companies are in worries. It was 1,084 won per dollar on Feb 4, but got strengthened to 1,022 won on May 8, a 5.7% increase in three months. It was the strongest won value since Lehman Brothers crisis in Nov 2008.  Though the impact may be limited for big companies like Hyundai or Samsung that has hedging mechanisms, analysts believe their profit margins will weaken if the won strengthens to the 1,010 won level. Much more difficulties are expected for small and midsize exporters with less ability to hedge currency risks.

While high won is a bad news for Korean export companies, it was a good news for parents who send their children to the U.S. for schooling. My wife and I got into a panic in 2009 to find money for $40,000 tuition fee at Washington University in St.Louis for my first son, when the currency rate was running around 1,600 won at that time. We took a sigh of relief only after he managed to get a scholarship fund that covers most of the tuition. Attaboy!

2) Ferry incident’s negative effect in economy

The government has decided to pour 7.8 trillion won to provide support for regions and industries hit hard by the ferry incident and the sag in domestic spending that followed. According to the Seoul Association of Chartered Bus Transportation Business, almost all reservations of chartered buses for school trips since Apr 16 have been cancelled. Korea’s largest discount store E-Mart saw its sales drop by 3.5% in April, while its rival Lotte Mart also suffered 4.5% drop. Daily credit card spending got reduced by 4.6% after the Apr 16 accident. Housing transactions also reduced about 11% in April from March as “there have been fewer people willing to buy a house in the sorrowful national mood,” to a realtor in Seoul.

There was a big flood from typhoon Lusa in Gangwon Province in the east of Seoul in 2002, and many were in sorrow over the loss of lives and properties. While people were working hard for restoration in a village, there was a tourist group from outside, drinking, dancing and having good time, right next to the restoration workers. The drinking tourists were severely hammered by the media, but local authority asked more people to come to their town for drinking and dancing. Gangwon Province’s main industry was tourism.

3. Auto Industry

1) Big hands to Hyundai Genesis from IIHS

Hyundai’s new Genesis earned “Top Safety Pick+” ratings from the U.S. Insurance Institute for Highway Safety (IIHS) crash test, becoming the first passenger car to receive top grades in all 29 categories of the test.  IIHS said the redesigned Genesis received a “Good” rating in the small overlap frontal crash, and “Superior” for its front crash prevention system, the first time any Hyundai or Kia model to do so. Hyundai hopes the IIHS rating will boost its Genesis sales in the U.S. and globally, reaching 24,000 and 68,000 units, respectively, this year.  

.With the success of Genesis, Hyundai has chosen many good names for its future models. They are Exodus, Leviticus, Numbers, …….

Regards,

H.S.