The Korea Herald

Luxury compact cars subject to tax next year

The government said Thursday that it would levy an acquisition tax on pricey compact cars starting next year, to strengthen tax balance.Buyers of compact cars have been exempted from paying the tax so far, while purchases of regular cars are subject to a 4 percent acquisition tax. The tax deduction rate of a compact car priced at over 50 million won will be reduced to 85 percent from the current 100 percent. Smart Fortwo, manufactured by German carmaker Daimler AG, is the only compact car model

Dec. 10, 2015

Luxury compact cars subject to tax next year

Chinese ownership of Jeju land surges fivefold in 3 years

The amount of land owned by Chinese investors on the southern resort island of Jeju has surged nearly fivefold over three years, raising concerns that the rapid flow of Chinese money could further inflate real estate prices there.According to a report by the National Assembly based on recent data by the Ministry of Land, Infrastructure and Transport, Chinese investors owned 8.34 square kilometers of the island’s land last year, up from 1.42 square kilometers in 2011. The 2014 figure also showed

Dec. 10, 2015

Chinese ownership of Jeju land surges fivefold in 3 years

Bank of Korea holds key rate amid uncertainty

South Korea's central bank kept its benchmark interest rate steady Thursday for the sixth month in a row, extending its wait-and-see mode ahead of a looming U.S. rate hike.In a widely expected decision, the Bank of Korea froze its base rate at 1.5 percent after sending it to a record-low level through four rate cuts in less than a year since August 2014.The decision comes amid growing concerns over a possible U.S. rate hike, the first of its kind in nearly a decade, which could prompt a mass out

Dec. 10, 2015

Korea-China FTA to take effect Dec. 20

Ending years of negotiations and political hurdles, a free trade pact between Korea and China will go into effect on Dec. 20, removing numerous trade barriers between both nations amid flagging exports. The two countries have agreed to officially implement the deal by exchanging diplomatic letters in Beijing on Wednesday, a week after the South Korean parliament ratified the bill in the midst of political confrontation between rival parties. (Yonhap)The bills on FTAs with China, New Zealand and

Dec. 9, 2015

Corporate tax debate needs balanced approach

A set of bills designed to raise the country’s corporate tax rates failed to pass the parliament during its regular session that ended Wednesday.　The two major parties remained poles apart on the need to increase the rates, which currently range from 10 to 22 percent. Lawmakers of the ruling Saenuri Party, who opposed levying heavier taxes on corporations, were reluctant to deliberate on the bills submitted by legislators of the main opposition New Politics Alliance for Democracy. The ruling p

Dec. 9, 2015

Corporate tax debate needs balanced approach

Foreigners' card spending plunges in Q3 after MERS

Foreigners spent far less with their credit cards during their stay in South Korea in the third quarter of this year in the aftermath of the Middle East Respiratory Syndrome outbreak that led to a drop in the number of foreign visitors, data showed Wednesday. Credit card purchases by non-South Korean nationals plunged 38.7 percent to US$2 billion in the July-September period from a year earlier, according to the data compiled by the Credit Finance Association. The third-quarter figure marked t

Dec. 9, 2015

Korea-China free trade deal to take effect on Dec. 20

A free trade agreement between South Korea and China will come into force on Dec. 20, officials said Wednesday, about six months after the two nations formally signed the deal aimed at slashing tariffs and other trade barriers. The South Korean Ambassador to China, Kim Jang-soo, and Chinese assistant commerce minister, Wang Shouwen, exchanged a diplomatic document that set the date for inaugurating the accord earlier in the day. After about three years of negotiations, South Korea and China

Dec. 9, 2015

Korea-New Zealand FTA to take effect on Dec. 20

South Korea and New Zealand agreed Wednesday to put their free trade agreement into effect on Dec. 20, the Foreign Ministry said. The two sides exchanged a related diplomatic document in a ceremony in Wellington the same day, it said. They struck the deal on the FTA in November last year and signed it formally four months later. The FTA eliminates import tariffs on over 90 percent of goods traded between the two countries. Two-way trade reached $3.26 billion in 2014. It is also expected to p

Dec. 9, 2015

Korea's home sales rise 7.4% on-year in Nov.

South Korea's home transactions rose 7.4 percent in November from a year earlier amid a recovering trend in the local real estate market, the government said Wednesday. The number of housing purchase transactions reached 97,813 last month, compared with 91,050 tallied the previous year, according to the Ministry of Land, Infrastructure and Transport. The November figure, however, fell 8 percent from 106,274 a month earlier. For the first 11 months of the year, home transactions came in at 1.1

Dec. 9, 2015

KDI cuts Korea's 2015 growth estimate to 2.6 pct

South Korea's leading state-run think tank downgraded the country's growth forecast for 2015 on Wednesday as weak exports continue to weigh down the economy despite a recovery in domestic consumption. The Korea Development Institute forecast that Asia's fourth-largest economy will expand 2.6 percent this year from a year earlier, down from the 3 percent growth it predicted in May. The KDI's growth estimate is lower than the government's official target of 3.1 percent announced in September and

Dec. 9, 2015

Korea's M2 money supply growth slows in Oct.

South Korea's M2 money supply continued to expand in October, but the rate of the growth slowed from the previous month ahead of an anticipated U.S. rate hike, central bank data showed Wednesday. The M2 reached 2,235.8 trillion won ($1.89 trillion) in October, inching up 0.1 percent from the previous month, according to the Bank of Korea. The October reading marks an 8.8 percent rise from the same month last year, compared with a 9.4 percent on-year increase in September that marked the fastes

Dec. 9, 2015

Rise in household debt slows in Nov.

Household loans extended by local lenders continued to rise at a fast rate last month, but the rate of growth slowed from a month earlier ahead of an imminent U.S. rate hike, central bank data showed Wednesday. As of the end of November, outstanding household loans extended by local banks totaled 632.3 trillion won ($536.3 billion), up 7.6 trillion won from the month before, according to the Bank of Korea. The rise marks a slowdown from October, when outstanding household loans gained 9 trilli

Dec. 9, 2015

Japan agrees to more than triple Korean laver import quota

Japan has agreed to raise its quota for South Korean laver imports by more than twofold over the next 10 years that will create new demand for local producers, the government said Wednesday. The Ministry of Oceans and Fisheries said under a new agreement reached with its Japanese counterpart, the quota will be raised 225 percent from 1.2 billion sheets this year to 2.7 billion sheets in 2025. This translates into exports rising 150 million sheets every year in the next decade, it said. The m

Dec. 9, 2015

Korea seeks to rev up green car sales

More than 1 million environmentally friendly cars could hit the roads in the next five years under a plan unveiled by the government Tuesday, as part of efforts to reduce greenhouse emissions and generate new sources of economic growth.The government plan approved in a Cabinet meeting on the same day aims to increase the proportion of green cars among new vehicles sold in the country to 20 percent, from the current 2 percent, by the year 2020. About 80,000 green cars including hybrids, electric-

Dec. 8, 2015

Sliding oil prices weigh on Korea

Economic policymakers in the government said early this year sliding oil prices would be a blessing for the Korean economy. Their argument was that a decline in oil prices would result in an increase in household income and consumption while helping manufacturing companies cut production costs.But such expectations have proved simply wrong, even as oil prices fell to the lowest level since 2009.The policymakers, who set this year’s growth target at 4 percent, now concede the annual growth rate w

Dec. 8, 2015

Korea to front-load 68% of spending in 2016 budget

Korea will front-load 68 percent of spending in its 2016 budget, as Asia’s fourth-largest economy is expected to grow slower next year amid bleak global trade outlook, the Finance Ministry said Tuesday. According to the plan, endorsed at a Cabinet meeting earlier in the day, the government will aim to complete 40.1 percent of expenditure for public projects earmarked in the budget by the end of March, worth 128 trillion won ($108.7 billion), and 68 percent, or 224 trillion won, by the end of Jun

Dec. 8, 2015

China's central bank approves Korea's plan to float yuan bonds

China's central bank approved a South Korean plan to issue yuan-denominated foreign exchange stabilization bonds in the world's No. 2 market, the government said Tuesday. The finance ministry said the People's Bank of China approved the issuing of upwards to 3 billion yuan ($463 million) worth of bonds. This is the first time Beijing has approved the floating of yuan-based bonds by a foreign government inside China, and it follows a visit by Chinese premier Li Keqiang to Seoul on Oct. 31, the

Dec. 8, 2015

Household debt growth quickens in Oct.

Loans extended to households by local lenders and other financial institutions rose at a faster rate in October than a month earlier amid a continued rise in demand for mortgages, central bank data showed Tuesday. Outstanding household loans by commercial banks and savings banks came to 792.4 trillion won ($674.9 billion) as of end-October, up 11.8 trillion won from the previous month, according to the preliminary data from the Bank of Korea. The October tally marks an 8.5 percent increase fro

Dec. 8, 2015

U.S., IMF do not view Korea as currency manipulator: Korea

Neither the U.S. government nor the International Monetary Fund view South Korea as a currency manipulator, and the issue is unlikely to affect economic relations between the two countries, the Korea Society president said Monday. Thomas Byrne, an economics expert who has been leading the Korea Society since August, made the remark during a meeting with South Korean correspondents in Washington, pointing out that the large current account surplus Korea is enjoying now is not because of increase

Dec. 8, 2015

Park vows reform for trade competitiveness

President Park Geun-hye on Monday pledged to complete her reform drive, stressing that it would create a new environment for Korean exporters facing both internal and external challenges.　In a speech delivered at the annual Trade Day, Park also urged to foster start-up exporters and industrial convergence with information technology in order to improve the nation’s trade competitiveness.　“(The government) will improve the country’s trade competitiveness and strengthen the economy by wrapping up

Dec. 7, 2015