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Korea's Industrial Policy Spending Just 68% of OECD Average
Korea's fiscal spending on industrial policy as a share of gross domestic product (GDP) does not even reach 70% of the average level among Organization for Economic Cooperation and Development (OECD) members. Even this spending has shown low efficiency, as policies from multiple ministries overlap and are concentrated on small and start-up enterprises. With countries enhancing their policy capabilities to foster future industries, analysts say Korea should redesign its industrial policy. The Korea Institute for Industrial Economics and Trade (KIET) released a report containing these findings, titled "Quantitative Analysis of Korea's Industrial Policy and Policy Implications," on Thursday. According to KIET, the average share of industrial-sector fiscal spending relative to GDP among OECD member countries rose from 1.34% in 2019 to 1.55% in 2023. By contrast, Korea's share of industrial-sector fiscal spending relative to GDP peaked at 1.37% in 2021, then fell to 1.06% in 2023. This figure amounts to just 68% of the OECD average. Amid recent U.S.-China competition compounded by supply chain instability stemming from geopolitical crises, countries are actively using industrial policy to secure economic security and leadership in future industries — yet Korea alone is moving in the opposite direction. Korea's industrial-sector fiscal spending was found to be not only small in total scale but also low in concentration. KIET's analysis of the scale and concentration of industrial policy across OECD countries found that Korea had the lowest policy concentration among the 20 countries analyzed, except for Chile. This means there are many programs, but each individual program is small in scale. KIET expressed concern that under such conditions, policies with similar effects are more likely to overlap, while the effect relative to fiscal input declines. Furthermore, as of 2023, 65% of Korea's industrial policy spending was found to be "horizontal policy" commonly applied across all industries or enterprises. The share of vertical industrial policy, which strategically fosters specific industries or enterprises, stood at just 35%. KIET stressed, "Vertical policy is also concentrated mainly on support for manufacturing materials, parts and equipment and on research and development (R&D)." It added, "Considering that major countries have recently focused their policies on advanced strategic industries such as artificial intelligence (AI), semiconductors and future mobility, Korea too should discuss the need to expand vertical industrial policy." KIET went on to advise, "We must break away from the horizontal, manufacturing-centered industrial policy based on the Industrial Development Act and work to foster specific fields such as advanced strategic industries." It said, "Only by reducing inertial spending and boldly broadening the scope of support to include non-manufacturing new industries can we respond to changes in the global industrial landscape." Meanwhile, Korea's export financing relative to GDP was found to be about twice the average of OECD countries. This result reflects a characteristic of the Korean economy, whose trade volume is large relative to its economic size. In fact, Korea's exports and imports relative to GDP reached 92.8% last year....
Korean Leverage ETFs Blamed for US Tech Selloff
international
Korea's leveraged exchange-traded funds (ETFs) tied to single stocks Samsung Electronics (005930) and SK hynix (000660) have driven extreme volatility in the Kospi, and the butterfly effect of these products is now delivering some shocks even to U.S. markets. In particular, with Micron — which splits the memory chip market with Samsung Electronics and SK hynix — set to report fiscal third-quarter (March–May) earnings after the close on the 24th (local time), the influence of these leveraged ETFs appears to be growing incrementally. As Korean ETFs rattle even the U.S. market, warnings about related leveraged investing are sounding on Wall Street. With the concentration of retail money in these ETFs sending market volatility soaring and the currency-stabilization effect failing to materialize, Financial Supervisory Service Governor Lee Chan-jin lamented having permitted them. Korean chip stocks plunge a day earlier, dragging down New York-listed peers in a chain reaction On the 23rd (local time), the New York markets all fell on a tech correction, with the Dow Jones Industrial Average down 0.09%, the Standard & Poor's (S&P) 500 down 1.44%, and the Nasdaq Composite down 2.22%. In particular, Micron plunged 13.18%, while most chip-related stocks fell sharply, including Nvidia (-4.09%), Broadcom (-3.06%), SanDisk (-13.64%), AMD (-5.76%), Intel (-6.14%), ASML (-7.82%), Lam Research (-9.33%), Applied Materials (-8.48%), Seagate (-5.07%), and Qualcomm (-8.01%). The Philadelphia Semiconductor Index also fell 7.87%. The chip-led wave of selling is read as reflecting a perception that recent share prices of artificial intelligence (AI)-related stocks have run too high. In particular, the U.S. Federal Reserve's recent signal of a rate hike within the year and the enormous capital-expenditure (CAPEX) burden of big tech companies including SpaceX acted as successive negatives, worsening investor sentiment. Above all, anxiety over the concentration of investment capital in chips triggered a sell-off in related stocks. A defining feature of the market that day was that the New York market did not fall entirely independently but was influenced to some degree by chip-stock sentiment in Asian equity markets. New York tech stocks were broadly weak on the 22nd, the previous day, on news that key Google talent had moved to other privately held AI companies, with the S&P 500 and Nasdaq falling 0.37% and 1.33%, respectively. After Noam Shazeer, vice president of engineering at Google, announced on the 17th that he was joining OpenAI, news on the 19th that John Jumper, a researcher at Google's AI lab DeepMind, was moving to Anthropic after nine years sent Alphabet down 4.99%. Jumper is a co-developer of the protein-structure-prediction AI AlphaFold and a 2024 Nobel laureate in chemistry. Alphabet fell more than 7% intraday on the 22nd, marking its biggest decline in a year, and slipped a further 0.94% on the 23rd. On news of U.S. tech weakness, SK hynix and Samsung Electronics plunged 12.47% and 12.31%, respectively, in the Kospi market on the 22nd. The two stocks' declines were the largest in 17 years, since the 2008 global financial crisis. With the two leading shares crashing, the Kospi also tumbled 9.99%. The Kospi 200 Volatility Index (VKOSPI), known as the "Korean fear gauge," also surged to 89.41, closing in on the 90 mark. The same day, Japan's Nikkei fell 3.55%, ending an eight-session winning streak. "Sharp Korean market volatility triggers 'AI investment overheating' fears"... Wall Street, too, warns of 'Samsung·SK leveraged ETF' risk The Asian market decline in turn became a vicious circle fueling the plunge in New York chip stocks on the 23rd. In this process, Wall Street analysts repeatedly noted that rapid asset-rebalancing selling by Samsung Electronics and SK hynix leveraged ETFs stoked technical volatility in U.S. markets in a chain effect. The view is that the effect of Samsung Electronics·SK hynix single-stock two-times leveraged ETFs — which absorbed enormous retail capital in a short span — dumping large volumes of underlying-linked stocks and futures to maintain their target multiple in a falling market spilled over to the U.S. market. The logic is that as Samsung Electronics·SK hynix single-stock leveraged ETFs and related derivatives are liquidated simultaneously, the global investment banks (IBs) and hedge funds connected to them are mechanically forced to sell U.S. chip stocks to diversify risk. In fact, global institutional investors not infrequently trade U.S. tech stocks and Korea's leading chip stocks as a single AI bundle. Leveraged ETFs are designed to track the upward and downward moves of an underlying asset by two times or more. If the investment outlook is right, one earns a great deal; if wrong, one loses a great deal. On the 23rd, Bloomberg also pointed out that "concerns are spreading on Wall Street that the AI fervor that drove the stock bull market may have been exaggerated," adding that "warnings about AI investment overheating are not new, but the recent decline was triggered by sharp swings in the world's best-performing market this year (the Kospi market)." Bloomberg analyzed that "what began as a modest decline in Korea morphed into foreign investors selling more than $2.5 billion of Kospi shares," and that "forced liquidations of investors dealt a blow to retail traders dealing with borrowed funds, compounded by a wave of selling linked to leveraged ETFs tracking Samsung Electronics and SK hynix." Citing experts, it warned that "the volatility was concentrated in the memory chip makers that accounted for the bulk of this year's stock gains," and that "given leverage levels in Korea and worldwide, investors should be careful not to become overly complacent." In a separate article the same day, Bloomberg also reported that "the recent plunge in Korean AI-related stocks Samsung Electronics and SK hynix has renewed attention on the rapid growth of the global leveraged ETF market." According to Bloomberg, the combined assets of 16 leveraged ETFs tracking Korean chip stocks launched last month have ballooned from $3 billion at launch to more than $9 billion now. Bloomberg tallied that global leveraged ETF assets have surpassed $290 billion (about 446 trillion won), with the Asian market at $45 billion and the U.S. market at more than $220 billion. In fact, a Hong Kong leveraged product tracking twice the return of SK hynix's share price has become the largest ETF in that region's market. According to Bloomberg on the 23rd, the assets under management (AUM) of the "SK hynix Leveraged ETF," launched in October last year and listed on the Hong Kong exchange, stood at $16.8 billion (about 25.8 trillion won) as of the 22nd, surpassing the $16.2 billion (about 24.9 trillion won) Hang Seng-tracking "Tracker Fund of Hong Kong." With SK hynix's share price soaring more than 300% this year, the ETF's year-to-date return has reached around 900%. Currency-defense effect of 'zero,' and Lee Chan-jin says "I'd lie down to block it"... Micron's earnings on the 24th a turning point Regarding this product, Financial Supervisory Service Governor Lee Chan-jin confided at a regular press briefing held at the FSS head office in Yeouido, Seoul, on the 22nd that he regrets the introduction of the Samsung Electronics·SK hynix single-stock leveraged ETFs. The Samsung Electronics·SK hynix single-stock leveraged ETFs were introduced late last year, amid a persistently high exchange rate, in a bid to redirect into the domestic market the overseas-investment demand of so-called "Seohak ants" who had been investing in U.S. stocks. Lee diagnosed that "with trading turnover and the like surging, market instability and volatility are in a very serious state," adding that "the concentration of trading is expanding, particularly around chip stocks." He went on to say, "Leveraged investing has also expanded enormously, but a contradictory phenomenon is appearing in which the share of margin-loan balances declines because market capitalization has increased," noting, "We are watching carefully so as not to be buried in a statistical illusion, and we view it seriously." Lee also said, "The extreme turnover of the product is resulting in only securities firms lining their pockets," voicing concern that "I worry it will end up looking like a gambling table where the traders gain nothing in real terms and only the people taking 'ppojji' (a kickback that a winner in a game or gamble gives to those around) make a lot of money." Asked whether "the single-stock leveraged ETFs have had the high-exchange-rate-easing effect intended at their introduction," Lee said, "At the time it was prepared somewhat hastily [BODY] He acknowledged "it's true," adding, "As a measure to repatriate funds from Hong Kong, the effects were not very good and the side effects became too large, so the government is also grappling with this." He continued, "I personally regret it and reflect on whether I should have somehow lain down to block it at the time," and assessed that "it is true that market instability factors—such as inflationary pressure from high oil prices and anticipated interest rate hikes in Korea and major countries—persist in the foreign exchange market." As Director Lee regretted, single-stock leveraged ETFs tied to Samsung Electronics and SK hynix have recently degenerated into an arena for retail investors' ultra-short-term speculative trading. According to the Korea Exchange on the 23rd, among the 16 single-stock leveraged and inverse ETFs tied to Samsung Electronics and SK hynix listed on the 27th of last month, the most heavily traded—Samsung Asset Management's KODEX and Mirae Asset Management's TIGER ETFs—each plunged more than 24%. Nevertheless, these products dominated the list of top net-buy stocks by retail investors from listing through the 22nd, recording total daily average trading value of more than 10 trillion won. According to the Financial Supervisory Service, the daily average turnover rate for single-stock leveraged products reached 122.5% from the 27th of last month through the 12th of this month. This means the entire stock changed hands more than once in a single day. The turnover rate for these products at times approached as high as 200%. As Wall Street experts have pointed out, it remains uncertain how long the "tail wagging the dog" market—in which Samsung Electronics and SK hynix single-stock leveraged ETFs shake the broader New York stock market—will continue. The turning point appears to be Micron's earnings, set to be released after the market close on the 24th. This is because the price movements of Korean and U.S. semiconductor stocks, currently swayed by technical supply and demand, could shift somewhat toward an earnings-driven market with Micron as a catalyst. ※ "Trump Stocker" is a column delivering on-the-ground stories and analyses of current issues related to U.S. markets, companies, policy, politics, and diplomacy that may aid investment in the era of President Donald Trump. Subscribe to receive useful news from the United States....
"12,000 Won Per Hour" vs "Freeze to Survive": Minimum Wage Talks Begin
finance
Concerns are mounting among small business owners as labor unions demand an hourly minimum wage of 12,000 won for next year. While labor argues that a double-digit increase is needed to address inflation and income inequality, small business circles are calling for a freeze or minimal increase, citing weak domestic demand and a crisis in the self-employed sector. The Minimum Wage Commission opened its eighth plenary session at the Government Complex in Sejong on Monday, beginning discussions on next year's minimum wage increase rate. The commission, composed of 27 members in total — nine each representing workers, employers, and the public interest — decides next year's minimum wage by exchanging revised proposals based on the initial demands from labor and management. The initial proposal presented by labor this year is an hourly wage of 12,000 won. This is 16.3% higher than this year's minimum wage of 10,320 won, with a monthly equivalent reaching 2.508 million won (based on 209 hours per month). The Federation of Korean Trade Unions and the Korean Confederation of Trade Unions stressed, "The minimum wage is a lifeline for low-wage workers and a measure of equality and justice in our society," adding, "We must end inequitable growth in which the fruits of economic recovery are concentrated among only a few." In contrast, the management sector, including small business owners, counters that a sharp minimum wage increase is a claim that ignores reality. Small and medium-sized enterprises and small business organizations are demanding a freeze or minimal increase. This is because prolonged domestic demand slumps, the burden of high interest rates, and rising labor costs have pushed small business operators' management conditions to their limits. According to a "Survey on the Impact of Minimum Wage Increases on Small Business Owners" conducted last month by the Korea Federation of Micro Enterprise on 700 small business owners nationwide, 87% of respondents answered that "the burden of the current minimum wage level is heavy." This means more than eight out of ten small business owners feel a heavy burden from the current minimum wage of 10,320 won. By industry, those finding the minimum wage burdensome ranked in the order of coffee shops (92.9%), hair and beauty salons (91.7%), and other wholesale and retail businesses (91.1%). Of businesses with employees, 92.7% said their operating profit had declined due to the minimum wage increase, as did 88.3% of businesses without employees. As a response to rising labor costs, the highest proportion cited "reducing employment and halting new hiring" (38.4%). This was followed by considering the introduction of unmanned operations and automation (32.9%), reducing working hours (21.9%), raising prices (17.6%), and cutting investment (14.0%). As for an appropriate minimum wage level to maintain employment, 54.7% chose "8,500 to 9,000 won per hour." Responses of "9,000 to 9,500 won per hour" came to 22.5%, while "8,500 won per hour" came to 18.8%. The view that next year's minimum wage should be lowered stood at 74.9%, while the view that it should be frozen stood at 23.6%. The view that it should rise was only 1.6%. Debate is also heated over the impact of a minimum wage increase on employment. The Pi-Touch Institute, a research organization sympathetic to small and medium-sized enterprises, released an analysis showing that if the minimum wage is raised by 16.3% as labor demands, 443,000 jobs would be lost annually and real gross domestic product (GDP) would decline by 8.1 trillion won. It also forecast that corporate innovation investment would fall by 400 billion won annually. The institute explained that a minimum wage increase reduces labor demand and output at small businesses, while the burden of labor costs dampens innovation investment such as new product development. It estimated that a 5% minimum wage increase would result in a loss of 151,000 jobs, and a 10% increase would result in a loss of 288,000 jobs....
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AI LENSKorea's Industrial Policy Spending Just 68% of OECD Average
Korea's fiscal spending on industrial policy as a share of gross domestic product (GDP) does not even reach 70% of the average level among Organization for Economic Cooperation and Development (OECD) members. Even this spending has shown low efficiency, as policies from multiple ministries overlap and are concentrated on small and start-up enterprises. With countries enhancing their policy capabilities to foster future industries, analysts say Korea should redesign its industrial policy. The Korea Institute for Industrial Economics and Trade (KIET) released a report containing these findings, titled "Quantitative Analysis of Korea's Industrial Policy and Policy Implications," on Thursday. According to KIET, the average share of industrial-sector fiscal spending relative to GDP among OECD member countries rose from 1.34% in 2019 to 1.55% in 2023. By contrast, Korea's share of industrial-sector fiscal spending relative to GDP peaked at 1.37% in 2021, then fell to 1.06% in 2023. This figure amounts to just 68% of the OECD average. Amid recent U.S.-China competition compounded by supply chain instability stemming from geopolitical crises, countries are actively using industrial policy to secure economic security and leadership in future industries — yet Korea alone is moving in the opposite direction. Korea's industrial-sector fiscal spending was found to be not only small in total scale but also low in concentration. KIET's analysis of the scale and concentration of industrial policy across OECD countries found that Korea had the lowest policy concentration among the 20 countries analyzed, except for Chile. This means there are many programs, but each individual program is small in scale. KIET expressed concern that under such conditions, policies with similar effects are more likely to overlap, while the effect relative to fiscal input declines. Furthermore, as of 2023, 65% of Korea's industrial policy spending was found to be "horizontal policy" commonly applied across all industries or enterprises. The share of vertical industrial policy, which strategically fosters specific industries or enterprises, stood at just 35%. KIET stressed, "Vertical policy is also concentrated mainly on support for manufacturing materials, parts and equipment and on research and development (R&D)." It added, "Considering that major countries have recently focused their policies on advanced strategic industries such as artificial intelligence (AI), semiconductors and future mobility, Korea too should discuss the need to expand vertical industrial policy." KIET went on to advise, "We must break away from the horizontal, manufacturing-centered industrial policy based on the Industrial Development Act and work to foster specific fields such as advanced strategic industries." It said, "Only by reducing inertial spending and boldly broadening the scope of support to include non-manufacturing new industries can we respond to changes in the global industrial landscape." Meanwhile, Korea's export financing relative to GDP was found to be about twice the average of OECD countries. This result reflects a characteristic of the Korean economy, whose trade volume is large relative to its economic size. In fact, Korea's exports and imports relative to GDP reached 92.8% last year....
Korean Leverage ETFs Blamed for US Tech Selloff
international
Korea's leveraged exchange-traded funds (ETFs) tied to single stocks Samsung Electronics (005930) and SK hynix (000660) have driven extreme volatility in the Kospi, and the butterfly effect of these products is now delivering some shocks even to U.S. markets. In particular, with Micron — which splits the memory chip market with Samsung Electronics and SK hynix — set to report fiscal third-quarter (March–May) earnings after the close on the 24th (local time), the influence of these leveraged ETFs appears to be growing incrementally. As Korean ETFs rattle even the U.S. market, warnings about related leveraged investing are sounding on Wall Street. With the concentration of retail money in these ETFs sending market volatility soaring and the currency-stabilization effect failing to materialize, Financial Supervisory Service Governor Lee Chan-jin lamented having permitted them. Korean chip stocks plunge a day earlier, dragging down New York-listed peers in a chain reaction On the 23rd (local time), the New York markets all fell on a tech correction, with the Dow Jones Industrial Average down 0.09%, the Standard & Poor's (S&P) 500 down 1.44%, and the Nasdaq Composite down 2.22%. In particular, Micron plunged 13.18%, while most chip-related stocks fell sharply, including Nvidia (-4.09%), Broadcom (-3.06%), SanDisk (-13.64%), AMD (-5.76%), Intel (-6.14%), ASML (-7.82%), Lam Research (-9.33%), Applied Materials (-8.48%), Seagate (-5.07%), and Qualcomm (-8.01%). The Philadelphia Semiconductor Index also fell 7.87%. The chip-led wave of selling is read as reflecting a perception that recent share prices of artificial intelligence (AI)-related stocks have run too high. In particular, the U.S. Federal Reserve's recent signal of a rate hike within the year and the enormous capital-expenditure (CAPEX) burden of big tech companies including SpaceX acted as successive negatives, worsening investor sentiment. Above all, anxiety over the concentration of investment capital in chips triggered a sell-off in related stocks. A defining feature of the market that day was that the New York market did not fall entirely independently but was influenced to some degree by chip-stock sentiment in Asian equity markets. New York tech stocks were broadly weak on the 22nd, the previous day, on news that key Google talent had moved to other privately held AI companies, with the S&P 500 and Nasdaq falling 0.37% and 1.33%, respectively. After Noam Shazeer, vice president of engineering at Google, announced on the 17th that he was joining OpenAI, news on the 19th that John Jumper, a researcher at Google's AI lab DeepMind, was moving to Anthropic after nine years sent Alphabet down 4.99%. Jumper is a co-developer of the protein-structure-prediction AI AlphaFold and a 2024 Nobel laureate in chemistry. Alphabet fell more than 7% intraday on the 22nd, marking its biggest decline in a year, and slipped a further 0.94% on the 23rd. On news of U.S. tech weakness, SK hynix and Samsung Electronics plunged 12.47% and 12.31%, respectively, in the Kospi market on the 22nd. The two stocks' declines were the largest in 17 years, since the 2008 global financial crisis. With the two leading shares crashing, the Kospi also tumbled 9.99%. The Kospi 200 Volatility Index (VKOSPI), known as the "Korean fear gauge," also surged to 89.41, closing in on the 90 mark. The same day, Japan's Nikkei fell 3.55%, ending an eight-session winning streak. "Sharp Korean market volatility triggers 'AI investment overheating' fears"... Wall Street, too, warns of 'Samsung·SK leveraged ETF' risk The Asian market decline in turn became a vicious circle fueling the plunge in New York chip stocks on the 23rd. In this process, Wall Street analysts repeatedly noted that rapid asset-rebalancing selling by Samsung Electronics and SK hynix leveraged ETFs stoked technical volatility in U.S. markets in a chain effect. The view is that the effect of Samsung Electronics·SK hynix single-stock two-times leveraged ETFs — which absorbed enormous retail capital in a short span — dumping large volumes of underlying-linked stocks and futures to maintain their target multiple in a falling market spilled over to the U.S. market. The logic is that as Samsung Electronics·SK hynix single-stock leveraged ETFs and related derivatives are liquidated simultaneously, the global investment banks (IBs) and hedge funds connected to them are mechanically forced to sell U.S. chip stocks to diversify risk. In fact, global institutional investors not infrequently trade U.S. tech stocks and Korea's leading chip stocks as a single AI bundle. Leveraged ETFs are designed to track the upward and downward moves of an underlying asset by two times or more. If the investment outlook is right, one earns a great deal; if wrong, one loses a great deal. On the 23rd, Bloomberg also pointed out that "concerns are spreading on Wall Street that the AI fervor that drove the stock bull market may have been exaggerated," adding that "warnings about AI investment overheating are not new, but the recent decline was triggered by sharp swings in the world's best-performing market this year (the Kospi market)." Bloomberg analyzed that "what began as a modest decline in Korea morphed into foreign investors selling more than $2.5 billion of Kospi shares," and that "forced liquidations of investors dealt a blow to retail traders dealing with borrowed funds, compounded by a wave of selling linked to leveraged ETFs tracking Samsung Electronics and SK hynix." Citing experts, it warned that "the volatility was concentrated in the memory chip makers that accounted for the bulk of this year's stock gains," and that "given leverage levels in Korea and worldwide, investors should be careful not to become overly complacent." In a separate article the same day, Bloomberg also reported that "the recent plunge in Korean AI-related stocks Samsung Electronics and SK hynix has renewed attention on the rapid growth of the global leveraged ETF market." According to Bloomberg, the combined assets of 16 leveraged ETFs tracking Korean chip stocks launched last month have ballooned from $3 billion at launch to more than $9 billion now. Bloomberg tallied that global leveraged ETF assets have surpassed $290 billion (about 446 trillion won), with the Asian market at $45 billion and the U.S. market at more than $220 billion. In fact, a Hong Kong leveraged product tracking twice the return of SK hynix's share price has become the largest ETF in that region's market. According to Bloomberg on the 23rd, the assets under management (AUM) of the "SK hynix Leveraged ETF," launched in October last year and listed on the Hong Kong exchange, stood at $16.8 billion (about 25.8 trillion won) as of the 22nd, surpassing the $16.2 billion (about 24.9 trillion won) Hang Seng-tracking "Tracker Fund of Hong Kong." With SK hynix's share price soaring more than 300% this year, the ETF's year-to-date return has reached around 900%. Currency-defense effect of 'zero,' and Lee Chan-jin says "I'd lie down to block it"... Micron's earnings on the 24th a turning point Regarding this product, Financial Supervisory Service Governor Lee Chan-jin confided at a regular press briefing held at the FSS head office in Yeouido, Seoul, on the 22nd that he regrets the introduction of the Samsung Electronics·SK hynix single-stock leveraged ETFs. The Samsung Electronics·SK hynix single-stock leveraged ETFs were introduced late last year, amid a persistently high exchange rate, in a bid to redirect into the domestic market the overseas-investment demand of so-called "Seohak ants" who had been investing in U.S. stocks. Lee diagnosed that "with trading turnover and the like surging, market instability and volatility are in a very serious state," adding that "the concentration of trading is expanding, particularly around chip stocks." He went on to say, "Leveraged investing has also expanded enormously, but a contradictory phenomenon is appearing in which the share of margin-loan balances declines because market capitalization has increased," noting, "We are watching carefully so as not to be buried in a statistical illusion, and we view it seriously." Lee also said, "The extreme turnover of the product is resulting in only securities firms lining their pockets," voicing concern that "I worry it will end up looking like a gambling table where the traders gain nothing in real terms and only the people taking 'ppojji' (a kickback that a winner in a game or gamble gives to those around) make a lot of money." Asked whether "the single-stock leveraged ETFs have had the high-exchange-rate-easing effect intended at their introduction," Lee said, "At the time it was prepared somewhat hastily [BODY] He acknowledged "it's true," adding, "As a measure to repatriate funds from Hong Kong, the effects were not very good and the side effects became too large, so the government is also grappling with this." He continued, "I personally regret it and reflect on whether I should have somehow lain down to block it at the time," and assessed that "it is true that market instability factors—such as inflationary pressure from high oil prices and anticipated interest rate hikes in Korea and major countries—persist in the foreign exchange market." As Director Lee regretted, single-stock leveraged ETFs tied to Samsung Electronics and SK hynix have recently degenerated into an arena for retail investors' ultra-short-term speculative trading. According to the Korea Exchange on the 23rd, among the 16 single-stock leveraged and inverse ETFs tied to Samsung Electronics and SK hynix listed on the 27th of last month, the most heavily traded—Samsung Asset Management's KODEX and Mirae Asset Management's TIGER ETFs—each plunged more than 24%. Nevertheless, these products dominated the list of top net-buy stocks by retail investors from listing through the 22nd, recording total daily average trading value of more than 10 trillion won. According to the Financial Supervisory Service, the daily average turnover rate for single-stock leveraged products reached 122.5% from the 27th of last month through the 12th of this month. This means the entire stock changed hands more than once in a single day. The turnover rate for these products at times approached as high as 200%. As Wall Street experts have pointed out, it remains uncertain how long the "tail wagging the dog" market—in which Samsung Electronics and SK hynix single-stock leveraged ETFs shake the broader New York stock market—will continue. The turning point appears to be Micron's earnings, set to be released after the market close on the 24th. This is because the price movements of Korean and U.S. semiconductor stocks, currently swayed by technical supply and demand, could shift somewhat toward an earnings-driven market with Micron as a catalyst. ※ "Trump Stocker" is a column delivering on-the-ground stories and analyses of current issues related to U.S. markets, companies, policy, politics, and diplomacy that may aid investment in the era of President Donald Trump. Subscribe to receive useful news from the United States....
"12,000 Won Per Hour" vs "Freeze to Survive": Minimum Wage Talks Begin
finance
Concerns are mounting among small business owners as labor unions demand an hourly minimum wage of 12,000 won for next year. While labor argues that a double-digit increase is needed to address inflation and income inequality, small business circles are calling for a freeze or minimal increase, citing weak domestic demand and a crisis in the self-employed sector. The Minimum Wage Commission opened its eighth plenary session at the Government Complex in Sejong on Monday, beginning discussions on next year's minimum wage increase rate. The commission, composed of 27 members in total — nine each representing workers, employers, and the public interest — decides next year's minimum wage by exchanging revised proposals based on the initial demands from labor and management. The initial proposal presented by labor this year is an hourly wage of 12,000 won. This is 16.3% higher than this year's minimum wage of 10,320 won, with a monthly equivalent reaching 2.508 million won (based on 209 hours per month). The Federation of Korean Trade Unions and the Korean Confederation of Trade Unions stressed, "The minimum wage is a lifeline for low-wage workers and a measure of equality and justice in our society," adding, "We must end inequitable growth in which the fruits of economic recovery are concentrated among only a few." In contrast, the management sector, including small business owners, counters that a sharp minimum wage increase is a claim that ignores reality. Small and medium-sized enterprises and small business organizations are demanding a freeze or minimal increase. This is because prolonged domestic demand slumps, the burden of high interest rates, and rising labor costs have pushed small business operators' management conditions to their limits. According to a "Survey on the Impact of Minimum Wage Increases on Small Business Owners" conducted last month by the Korea Federation of Micro Enterprise on 700 small business owners nationwide, 87% of respondents answered that "the burden of the current minimum wage level is heavy." This means more than eight out of ten small business owners feel a heavy burden from the current minimum wage of 10,320 won. By industry, those finding the minimum wage burdensome ranked in the order of coffee shops (92.9%), hair and beauty salons (91.7%), and other wholesale and retail businesses (91.1%). Of businesses with employees, 92.7% said their operating profit had declined due to the minimum wage increase, as did 88.3% of businesses without employees. As a response to rising labor costs, the highest proportion cited "reducing employment and halting new hiring" (38.4%). This was followed by considering the introduction of unmanned operations and automation (32.9%), reducing working hours (21.9%), raising prices (17.6%), and cutting investment (14.0%). As for an appropriate minimum wage level to maintain employment, 54.7% chose "8,500 to 9,000 won per hour." Responses of "9,000 to 9,500 won per hour" came to 22.5%, while "8,500 won per hour" came to 18.8%. The view that next year's minimum wage should be lowered stood at 74.9%, while the view that it should be frozen stood at 23.6%. The view that it should rise was only 1.6%. Debate is also heated over the impact of a minimum wage increase on employment. The Pi-Touch Institute, a research organization sympathetic to small and medium-sized enterprises, released an analysis showing that if the minimum wage is raised by 16.3% as labor demands, 443,000 jobs would be lost annually and real gross domestic product (GDP) would decline by 8.1 trillion won. It also forecast that corporate innovation investment would fall by 400 billion won annually. The institute explained that a minimum wage increase reduces labor demand and output at small businesses, while the burden of labor costs dampens innovation investment such as new product development. It estimated that a 5% minimum wage increase would result in a loss of 151,000 jobs, and a 10% increase would result in a loss of 288,000 jobs....
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AI PRISM· June 24, 2026 · TODAY
The WEF Just Named the 10 Technologies That Will Hire for the Next Decade | June 24 2026
The World Economic Forum's 2026 top-10 emerging technology list isn't abstract. LG Chem just committed 15 trillion won to three of the four domains. SK Biopharma signed a 4-trillion-won AI drug discovery deal at Bio USA. And the U.S. government signed executive orders accelerating quantum computing deployment by 2028. If you're deciding where to build your career, these are the signals.In today's AI PRISM: Careers Edition, we map the WEF's H·E·R·O technology framework — Healthcare, Energy, Resources, Optimization — against where Korean companies are actually committing R&D capital, what LG Chem's 15-trillion-won pivot means for hiring in advanced materials and oncology, what K-bio's record 350-company showing at Bio USA signals about biotech job creation, why the U.S. quantum computing executive order accelerates a skills gap that Korea has four years to close, what the KOSPI's 10% single-day crash tells job seekers about financial market volatility risk in their future employers, and where Korea's 2027 minimum wage negotiation opening gap of 1,680 won sets the floor for non-chaebol offer letters.Sources:Beyond AI — The H·E·R·O Technologies Are Coming — WEF Top 10 Emerging Tech 2026 — Seoul Economic Daily, June 23, 2026Minimum Wage Freeze vs. 16.3% Hike — Labor and Management Open with Record Gap — Seoul Economic Daily, June 23, 2026K-Bio Leads with AI at Bio USA — Celltrion Books 150 Meetings — Seoul Economic Daily, June 23, 2026LG Chem Commits 15 Trillion Won in R&D — Targets Semiconductor Materials, Mobility, Robotics, Oncology — Seoul Economic Daily, June 23, 2026U.S. Weaponizes Quantum — Set to Replace GPS by 2031 — Seoul Economic Daily, June 23, 2026KOSPI Black Tuesday — Retail Investors Buy Record 8.5 Trillion Won as Market Crashes 10% — Seoul Economic Daily, June 23, 2026About AI PRISM:AI PRISM is Seoul Economic Daily's WAN-IFRA award-winning newsroom AI series, delivering Korean economic news adapted for global audiences. Episodes are produced with AI assistance and reviewed by a human editor.Tags:#KoreaCareers #JobSeekers #WEFtech #HEROtech #LGChem #KBio #BioUSA #QuantumComputing #KoreaJobs #MinimumWage #SG1CareersEdition #KOSPI #AIPRISM #SeoulEconomicDaily #WANIFRA
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