S. Korea, Peru strike free trade deal

South Korea struck a free trade deal with Peru on Monday, the latest trade pact that could pave the way for Asia's fourth-largest economy to tap deeper into the South American region, Seoul officials said, Yonhap News reported.

Peru marks the second South American country with which South Korea has sealed such a trade pact. 

Kim Jong-il wants to resume six-party talks: report

North Korean leader Kim Jong-il wants to resume the six-nation nuclear talks at an early date through close cooperation with China, Xinhua News reported Monday.

Kim expressed his wish to ease tension on the Korean Peninsula during summit talks with Chinese President Hu Jintao last Friday in the northeastern Chinese city of Changchun, according to the Chinese state news agency.

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The Road to Seoul: Shared Growth Beyond Crisis

During the bleak days for the world economy immediately following the global financial crisis of 2008, there was much pessimistic commentary on the possibility of an economic slump that would push the world into another Great Depression.  Although the global economy still faces challenges, the actual outcome has been far better than those worst predictions. 

Much of the credit for averting a repeat of the Great Depression can be given to the unprecedented level of policy cooperation among the advanced and emerging countries of the G20.  The newfound status of the G20 as the premier forum for international economic cooperation owes much to its proven successes to date.  Indeed, the challenges that the world economy faces now, such as growing public sector debt, can be seen as the side-effect of the otherwise effective medicine.

As the G20 prepares to convene its summit in Seoul in November, it will continue its efforts in coordinating policies to meet potential crises and guide the global economy toward recovery. 

But there is a more important task.  The Seoul Summit will see the G20 take a decisive step toward longer-term policy coordination.  This year will see the G20 building the platform for longer-term economic cooperation that will ensure the sustained and balanced growth of the world economy in the months and years ahead.  For this reason, the motto for the Seoul Summit is “Shared Growth Beyond Crisis”.

No one should underestimate the size of the task. Ironically, the better than expected recovery of the world economy presents greater challenges for policy coordination.  While the crisis was raging, the necessity of achieving policy coordination was easily impressed on everyone.  As the immediate crisis abates or morphs into regional crises, policy makers need to be on their guard against complacency. 

Lee has much to do in second half

President Lee Myung-bak enters the second half of his five-year tenure Wednesday with new initiatives for the working-class while the ethical standards of his new Cabinet picks are questioned at the confirmation hearings.

The Lee administration so far has been generally lauded for its international feats and successful responses to the global economic crisis, but chided for the lack of many things -- communication even with the ruling party, flexibility in dealing with North Korea, consistency in employment policy and concrete solutions to health and welfare problems.

It has clearly experienced what it was like to succeed a decade of liberal governments, the republic’s first in its 60 years’ history.

Just a couple months after the administration took office, tens of thousands of people took to the streets for protests triggered by a television documentary on U.S. beef imports.

The demonstrations eventually faded out, but then came the U.S.-bound financialmeltdown.

Backed up by its strong manufacturing sector and lessons learned from another financial crisis a decade ago, the country’s export-driven economy managed to escape the downturn faster than any other nation, drawing enough attention from around the world to host the G20 Summit in November.

Korea is now expected to successfully mediate between advanced and developing countries for balanced growth, to fix the governance of international financial institutions such as the IMF and to reduce trade barriers. 

After intensive involvement by the president himself, a former businessman who became the CEO of a major construction company at the age of 35 in the 1970s, the country won its first overseas nuclear power plant contract in the United Arab Emirates last year.

The president is a globally acclaimed hard worker who wakes up at 4 a.m. and tells his aides to report on state affairs around the clock.

A presidential aide once said Lee’s greatest virtue was that he has no selfish motives, unlike some of his predecessors, whose reputations were marred with corruption especially toward the end of their terms.

A majority of the Korean society, weary of the ideological schisms dating back to the Korean War 60 years ago, welcomed Lee’s center, pragmatist policy directions, principled leadership on law and order as well as plans to reform the public sector and education. 

Lee’s support ratings started to pick up with the economic recovery last year, peaked with the UAE nuclear deal and now remain in the 40 percent range, according to surveys by the Herald Media. 

Samsung Electronics to release Galaxy U in S. Korea

Samsung Electronics Co., the world's No. 2 mobile phone maker by shipments, said Thursday that it will release this month a smaller Galaxy phone through South Korea's third-biggest mobile operator, Yonhap News reported.

   The Galaxy U, the second series of Samsung's flagship smartphone Galaxy, features a 3.7-inch display, smaller than the 4-inch screen of the Galaxy S, it said. The phone is powered by a 1-gigahertz processor and runs on the Google Inc.-developed Android 2.1 system, like the Galaxy S.  

Chinese rush to buy Korean treasury bonds

Chinese investors more than doubled their holdings of Korean bonds so far this year as part of efforts to diversify investment from the U.S. and Europe in the wake of the financial crisis.

Flush with cash, Chinese investors are putting money in the debt, stocks and real estate of Korea, which has been emerging from the global recession most robustly among rich countries.

Chinese invested a net total of 2.48 trillion won ($2.1 billion) in local bonds during the first seven months of the year, according to Financial Supervisory Service and industry data.

With the increase seen so far this year, the amount of local bonds held by Chinese investors rose to about 4.4 trillion won by the end of July, more than double the 1.87 trillion won recorded at the end of last year.

The figure for Chinese investors’ holdings is equivalent to 6.05 percent of all Korean bonds held by overseas concerns and came in at 71.9 trillion won at the end of last month.

In addition to the rapid rate of increase, the composition of Chinese investors’ Korean portfolios has also drawn attention.

According to industry data, the vast majority of Chinese funds were used to buy up treasury bonds. Non-treasury bonds accounted for only 200 million won of the 1.87 trillion won worth of bonds Chinese investors held at the end of last year.

The influx of Chinese funds is expected to continue this year, with some expecting as much as 4 trillion won worth of Korean treasury bonds to be snatched up by Chinese concerns by the end of the year.

Despite the increase, however, Korean won-denominated assets account for only 0.1 percent of China’s $2.45 trillion-foreign reserves, and experts say that the figure is unlikely to increase significantly in the near future.

Along with increasing the amount invested in Korean bonds, Chinese investors have been bolstering their Korean securities portfolio.

According to data compiled under China’s Qualified Domestic Institutional Investor scheme, the proportion of Chinese funds invested in overseas securities markets accounted for by investments in Korean securities jumped to a record high of 4.5 percent during the second quarter of the year. 

Korea’s financial markets could also be experiencing a surge in the flow of China’s state-managed funds.

The China Investment Corp. is thought to be planning to diversify its portfolio, and has been receiving consultations from Korean securities firms.

The CIC manages about $200 billion of China’s sovereign wealth, and its securities portfolio has been heavily focused on North American markets.

About 36 percent of CIC’s investments were directed to securities last year, of which 44 percent are said to have been North American stocks.

The Social Security Fund that manages 776.6 billion yuan ($114 billion) is also planning to raise the proportion of its assets accounted for by overseas assets to 20 percent from the current 7 percent, raising interest in whether Korea will be among those that receive an influx of its capital.