We sorta knew they love rockets...but markets too?!

The perception we often get is that North Korea is the archetypal Communist state, with collectivist means of production concentrated in mostly rural communities churning out goods which the government tells to make in what quantities. Actually, the old-style command economy is on the outs. For several years now, the hermit kingdom has been experimenting with the use of markets. Mind you, it's not because of any sort of enlightened about the virtues of capitalism. Rather, it's being done out of survival. Indeed, North Korea may be more resilient than believed because of these partial market-oriented reforms:

Byung-Yeon Kim, a professor at Seoul National University, began interviewing North Korean defectors seven years ago to learn more about their country's economy. One wouldn't have thought there was much to discover: Often described as "Stalinist," the hermetic regime to the north seemed to preside over a crude, centrally planned system, with peasants toiling away for a pittance in collective farms and state-owned factories, dependent on food aid and growing poorer with each passing year.

In fact, as Kim lays out in his new book "Unveiling the North Korean Economy: Collapse and Transition," that popular image is almost entirely wrong. By necessity, virtually all North Koreans, from farmers to army commanders, now buy and sell goods and services in capitalist markets -- whether to survive or, in some cases, to get rich. The economy is growing and wages are rising; until recent rounds of United Nations sanctions, North Korea was about as dependent on foreign trade as the U.K. or Italy.

This will come as a disappointment to those who hoped that popular discontent would spell the end of the North Korean regime; despite decades of isolation, the country has stabilized economically even as it rapidly develops its nuclear and missile arsenals. Kim is more sanguine: He sees the spread of markets and money as a threat to dictator Kim Jong Un -- whom U.S. President Donald Trump now derides as "Rocket Man" -- and a point of pressure that the outside world can exploit. We spoke last week soon after North Korea tested its first thermonuclear device but before its latest missile test flew over Japan. A lightly edited transcript:

To be sure, North Korea is hardly booming. Still, it is actually quite externally involve as its trade levels are nearly similar to global averages [!] according to Prof. Kim. Note though that much of this market activity occurs in the informal sector. Prof. Kim adds:

Since Kim [Jong-un] took power in 2011, the economy has stabilized. While the rate of growth isn't that high, overall the economy has grown 1 to 2 percent for the last five years.

It's not really a Stalinist economy anymore. North Korea experienced a severe crisis in the late 1990s, when several hundred thousand people starved to death because of famine. Afterwards, the economy changed dramatically. Before, the regime repressed any kind of market activities. But nowadays, households participate more in the informal economy than the official economy. About 70 to 90 percent of household income comes from markets.

The reason is quite simple: The government cannot pay a salary sufficient to live on. I talked to one high-ranking diplomat who served in London and defected to South Korea last year. He said that he received a monthly salary of 2,000 North Korean won. At that time, the market rate was 3,000 North Korean won to the dollar. A typical North Korean household needs $50 per month for survival; the remaining part of this need is filled by markets. Some 70 percent of households participate in markets, while only 50 percent participate in the official economy. It's a hugely informalized or marketized economy.

Second, North Korea is not a closed economy anymore. I estimate the economy's trade dependency ratio is higher than 50 percent. The world average is 58 percent.

So, are there any truly Soviet-style economies left out there in the year 2017? Our usual suspect may not even be on the list. I guess that's progress of a sort.

AmorePacific owns several internationally well-known cosmetics brands--especially among PRC buyers.

Whew! That post title is a bit of a mess, but believe me (Trump-style) it is accurate. A few weeks ago, I discussed the potential economic hit to South Korea from deploying the US-sourced THAAD missile defense system. The PRC does not want South Korea to deploy it on the Korean peninsula out of concern that its advanced detection capabilities potentially compromise China's military defenses. I like to think that South Koreans are a sensible sort not prone to provoking the Chinese without any sane reason...but maybe nuclear annihilation at the hands of North Korean crazies is just cause? Some (Chinese) people are being irrational and unreasonable IMHO.

At any rate, aside from the company that provided the land for the deployment of THAAD--Lotte--another Korean firm has had its business activities negatively affected as well to a significant extent. AmorePacific is the umbrella group of several top Korean makeup brands, which are all the rage here in Asia. Let's just say a PRC embargo on all things Korean as a result of the THAAD deployment has hit AmorePacific's bottom line...like a missile attack, in fact:

AmorePacific Corp, South Korea's biggest cosmetic company, reported a 58 percent slump in operating profit in the second quarter on Wednesday, as the once investor-darling bore the brunt of diplomatic tensions with China that dampened demand from Chinese tourists.

Chinese visitors, the largest population of the total tourists to South Korea, fell 66 percent in June from a year earlier, resulting in a significant plunge in the number of customers to domestic duty-free shops. Since mid-March, Beijing has banned travel agencies from selling trips to South Korea following Seoul's decision to deploy a U.S. missile system to counter North Korean threats, despite China's objections.

"Cosmetic giants such as AmorePacific tend to rely on profits produced from duty-free stores," said Cho Yong-sun, an analyst at HMC Investment Securities.

China's communists are getting back at South Korea economically over the deployment of a THAAD system.

We are constantly reminded of the Chinese government having no reservations about using its considerable economic heft to punish other countries that defy its will. That's a perk of having the world's second largest economy. Now, this particular story isn't new, but the latest twists are regarding South Korea intending to deploy an American anti-ballistic missile system to protect against North Korea possibly launching an attack against it.

Let's go back to the beginning: South Korea's government has been seeking land to base the Terminal High Altitude Area Defense (THAAD) system near the border with North Korea. In this instance, the Korean conglomerate Lotte had such available land. Lotte's diverse holdings include a confectioner, groceries, and even theme parks. As it so happened, Lotte was also planning to build a theme park in mainland China. Let's just say that plan has been trashed by PRC authorities upset about the proliferation of ABM systems in Asia which will be based on Lotte-owned land:

Lotte Group has been forced to suspend the construction of its theme park in northeastern China, the latest in a series of retaliatory steps against Korea's decision to deploy a U.S. anti-missile defense system. Korea's fifth-largest conglomerate has been the main target of the reprisal for its decision to provide a golf course as the site for a U.S. Terminal High Altitude Area Defense (THAAD) battery.

The Chinese government ordered Lotte last December to stop building the Lotte World Theme Park near its department store and cinema in Shenyang, Liaoning Province, according to Lotte officials Wednesday. They said the authorities took issue with the construction site's preparedness for fire emergencies.

Yeah, whatever; fire hazard my foot. Lotte recently finalizing a land swap deal only kicked the PRC into overdrive as the PRC is now hitting South Korea on nearly all fronts where there's economic interaction. Today, the PRC's actions arguably sent the Korean stock index KOSPI down over a percent:

China has the economic power to move markets, and it isn’t afraid to use it. South Korean stock trading offered a case in point Friday, with a selloff in hotels, cosmetic makers and other tourism-related companies that made the country’s benchmark the worst performer among Asian equity markets. The slide followed a Yonhap news agency report on China ordering travel agents to halt sales of holiday packages to South Korea.

Travel to Korea seems an obvious target, but how about makeup?

Amorepacific Corp., South Korea’s biggest cosmetics company. Chinese authorities have ordered the destruction of about 700 kilograms of Amorepacific’s imported product, saying they included bacteria. The company slid 13 percent Friday...

Kim Yeong Ju, an official at South Korea’s Korea Tourism Organization, said its Chinese counterpart issued the ban, which also covers flights to South Korea and hotel bookings. Almost 50 percent of the foreign visitors to Korea in 2016 were from China, according to the KTO.

I agree though is that the "soft power" of Korea is too strong a lure for these PRC covert sanctions to have much traction:

The move may be more about conveying China’s displeasure than inflicting lasting wounds to the relationship, said JJ Kang, head of equity at Franklin Templeton Investment Trust Management Co. in Seoul.

“China never does things that are against their economic interests,” Kang said. “Shoppers will do anything they can if they want Korean products. Tourism will be difficult but it is hard for China to drag this problem on long term.”

Make no mistake: the Koreans offer really good stuff in terms of makeup, tourism, etc. that Chinese tourists crave and certainly cannot obtain locally.

UPDATE: Also follow the online war between citizens going on due to this deployment.

Another University of Birmingham graduate (like myself) is rather well-known for his appeasement strategies.

The year is 2017, and instead of military conflict, the matter foremost on the minds of many is trade conflict. Rhetorically at least, the new American leader begrudges almost everything made elsewhere by foreigners (or even US-based corporations). What's a profit-oriented business concern to do? We've heard of automakers being pressured to keep or add plant capacity Stateside. Ditto for telecommunications firms.Trump is not even in office yet and these sorts of headlines just keep rolling in.

The latest case in point is the Nikkei Asian Review reporting that Korean conglomerates (chaebol) LG and Samsung are keen on building plants Stateside instead of Mexico in order to appease the angry gods...I mean, Trump:

South Korea's two largest electronics companies are considering building factories in the U.S. for the production of home appliances in view of incoming President Donald Trump's "Make in America" pledge. LG Electronics is set to announce its plan to invest in the U.S. to construct production lines for washers and refrigerators while Samsung Electronics is mulling a similar plan ahead of the real estate billionaire's inauguration on Jan. 20.

Let's start with LG. With significant manufacturing facilities south of the border meant to service the vast US market, it's said to be reconsidering future sites based on what policies Trump enacts while in office:

"We are likely to wrap up our discussions on the matter by the end of the first half of this year," said LG Vice Chairman and CEO Jo Seong-jin at a press conference at the Consumer Electronics Show in Las Vegas on Jan. 6. "We are checking ways of productions in the plants, including whether it is okay to assemble parts there."

LG's Chief Technology Officer Skott Ahn also said that his company was keeping an eye on Trump's policy. "We should pay attention to it," Ahn said in an interview with Nikkei Asian Review at the event.

South Korean media reported that LG is considering building a home appliance production line in Tennessee. The company has three production factories in Mexico -- Reynosa, Mexicali and Monterrey -- and most products from these plants are exported to the U.S. tariff-free, thanks to the North American Free Trade Agreement, or NAFTA.

Meanwhile, Samsung is said to be doing the same. Instead of appliances, it's mulling whether to locate electronics assembly operations Stateside:

Previously, he said he would levy a 35% tax on products from Mexico. As Trump pressures foreign companies to invest in the U.S., Samsung Electronics is also discussing ways to establish new plants in the country. The company declined to comment on its plans. Samsung also produces home appliances for the U.S. market in Mexico.

The Trump presidency is a headache for Samsung, which is already embroiled in a political scandal in South Korea.

It seems LG and Samsung are keeping their options open as to what policies Trump will actually enact while in office. That said, they may be miscalculating about giving indications of possibly building Stateside since Trump may call them on it should they ultimately decide to set up shop in Mexico like they've done in the past. Unlike the Japanese who've pooh-pooed Trump dumping on Toyota for planning to build a plant in Mexico, the Koreans may be more...pragmatic.

Historically speaking, however, appeasement strategies aiming to calm would-be tyrants have not been found to work.

No thanks to Galaxy Note 7, it won't be a very merry Christmas in these parts.

The recall of Samsung's Galaxy Note 7 worldwide for its battery catching fire has damaged any number of things including Samsung's sales and profits, Samsung's reputation (though some would say less than you think) and...Samsung's hiring of local workers at its Vietnam assembly plant[s]. Nearly a third of Samsung's assembly operations are now being handled in the lower-cost Southeast Asian destination. Obviously, hopes were high that business would pick up at year end when retail demand is highest for the Christmas season.

However, what we instead have is whiplash from the Galaxy Note 7 being discontinued due to safety concerns. Anecdotes about slowing activity are emerging from areas surrounding Samsung's factory town:

"The factory used to be so busy toward the end of the year, and the workers wouldn't come out until night," Nguyen Van Loi says as evening falls and employees shuffle out. He has been selling fruit here for six years, but his sales this month are down 30% from October.

Just over a month has passed since Samsung halted production of the Galaxy Note 7 after a number of phones' batteries caught fire. Some workers at the Bac Ninh plant, which employs some 110,000 people, have been told to stay home. Others have seen their pay fall by half owing to a loss of overtime. "My pay has gone down by 40-50%," says Nguyen Thi Kieu Anh, a 19-year-old assembly line worker. She and other workers say they have been going home three hours earlier, at 5 p.m., since production of the Note 7 ended in mid-October. 

Worse may be in store:

While the factory appears to have been spared layoffs so far, those consigned to waiting at home have had their pay reduced by 70%, employees say. New hiring to ready for the typical year-end rush also appears to have been halted. Nguyen Van Chien, who runs a nearby boarding house, said he now has 30 roomers compared with 50 last year. With his income down by a third, he is finding it hard to make ends meet, he said.

It's going to be a lonely Christmas near Vietnam's manufacturing operations. For what it's worth, though, less than a tenth of its population is Christian, so Samsung's ill-timed lump of coal may matter less.

"Busan, we have a problem."

The oversupply of shipping vessels in the wake of world trade slowing down in recent years has resulted in the bankruptcy of one of Korea's most venerable firms, Hanjin Shipping. For years it has brought Korean-made goods to the rest of the world, but that didn't stop it from declaring bankruptcy earlier this year as its financial position became untenable. Its ships have not been able to dock at the world's major ports--those large enough to accommodate these large ships--over legal complications. What's more, shipments meant for the Christmas season have been stranded at sea together with these vessels:

With South Korea's biggest shipping company filing for bankruptcy protection, the vessels, sailors and cargo of Hanjin Shipping are stuck in limbo, stranded at sea. Ports, fearing they will not get paid, refuse to let them dock or unload...

Not only are ships not allowed to unload, containers waiting to be picked up are also being held back by the ports as collateral over unpaid bills. And even if the ports did allow them in, Hanjin would probably not as the vessels could expect to be immediately repossessed by the firm's creditors.

Beyond the ships and containers, there is of course the cargo within those containers - in many cases part of a tight chain of supply and delivery. By September, the global shipping industry is already into what is its busiest time of the year ahead of the Christmas season.

Busan is better known worldwide as the home of a US Navy base. However, it too has been Hanjin's main port for the longest time. As goes Hanjin, so goes the port city of Busan, and things aren't going too well at the moment:

A group of companies in South Korea’s port city of Busan said about 11,000 jobs are at risk if the troubled container line Hanjin Shipping Co. isn’t rescued.

With no Hanjin ship berthing at its terminal in Busan, the world’s fifth-busiest port, the city’s shipping industry is headed for a crisis, Lee Seung Kyu, chairman of Busan Port Development Association said. About 1,000 tractor drivers are unemployed, and many contractors may be forced to shut down their businesses, said Choi Chul Hee, a port executive. Hanjin handles about 50 percent of the facility’s container volume, he said, dealing a blow to an industry that accounts for 30 percent of the city’s economy.

“The lost volume will find its way to China and Busan will lose its competitiveness,” said Choi. “The economy of Busan will be hit if Hanjin Shipping fails.” Some companies that provide services to Hanjin Shipping and their workers haven’t been paid a total 42 billion won ($39 million), while about 10 percent of the 10,000 workers at the port haven’t received their wages for about three to four months, according to Kim Young Deuk, president of Eastern Marine Service Co. and also the head of Busan Marine Industry Association. Hanjin Shipping declined to comment.

At the other end of the world, the port of LA is clogging up with empty Hanjin containers that will  not be making a return trip to Busan:

As Hanjin Shipping Co. vessels drop off containers after weeks stranded at sea following the company’s bankruptcy, ports are dealing with a new problem: what to do with the empty boxes they leave behind.

Since the South Korean ocean carrier filed for bankruptcy five weeks ago, roughly 15,000 Hanjin containers have trickled in through the Ports of Los Angeles and Long Beach, often weeks after they were due to arrive. Now emptied of their goods, many are cluttering warehouse yards and parking lots across Southern California. With Hanjin’s ships no longer making the trans-Pacific trip, the company’s containers aren’t needed to carry goods back and forth.

While the stranded containers themselves are a nuisance, logistics companies say the bigger issue is that many are still attached to the wheeled trailers that trucks used to get them off the docks. These pieces of equipment, known as chassis, are vital to port operations, and putting thousands out of commission can delay the container deliveries for all shipping companies—not just Hanjin—people in the industry say.

The interesting thing to ponder is Hanjin's fate alongside that of Korea, Inc.: Is the problem particular to this company only and not the larger Korean export machine? Certainly it's an important cog whose demise may raise shipping costs for producers. Given the potentially vast spillover effects, will the Korean government bail it out...or ask another company to help shore it up? Or, will an erstwhile competitor like Hyundai Merchant Marine be encouraged to purchase part of its operations? For the rest of Korea Inc., the show must go on.

Maybe "Korean multiculturalism" won't be an oxymoron in the near future.

When it comes to the least fertile countries in the world, East Asian ones are pretty much at the bottom of global league tables. Since the demographic consequences of this phenomenon are dire--ever-fewer workers supporting a larger number of economically inactive--these countries have naturally been investigating solutions ranging from increasing benefits for new parents to improving the image of parenthood. To date, none have really worked in East Asia.

Enter migration: if people will not have children of their own who will eventually enter the workforce, why not bring in persons of working age from abroad? Better than wait for children to grow, they can work now. As relatively homogeneous societies, however, the fear remains that of cultural dilution. That said, there may be differences even among East Asian countries.

Consider South Korea. Make no mistake: On the balance, the general public holds negative views of migrant workers:

More than half of Koreans have a negative attitude towards foreign workers residing here, a recent survey showed. In a survey by local pollster Gallup Korea, 54 per cent of respondents said that the migration of foreign workers to Korea is "not a good thing." The study was conducted on 1,500 Koreans aged 19 and above.

Thirty-nine per cent said that it is a "good thing," which is significantly lower than the 57 per cent average across the 69 countries that participated in this global survey.

That said, multi-ethnic marriages and families are becoming more of a staple in South Korea. Call it another globalization phenomenon:

Interracial marriages [...] have grown since the 1990s in largely homogenous South Korea as the country started opening up following the end of military rule in 1993, and its people engaged in trade and tourism exchanges with nationals of neighbouring countries, including China, Vietnam and the Philippines.

As of 2014, there were 795,000 multicultural family members, comprising South Koreans, their foreign spouses and their biracial children, living in the nation of 50 million people, according to the Ministry of Gender Equality and Family. The country is also home to about 1.7 million foreigners.

Over 63 per cent of interracial marriages are between South Korean men and foreign-born women, the majority of whom hail from China, Japan and South-east Asian countries such as Vietnam and the Philippines. South Korean women marrying foreign men make up 24 per cent, and the rest are marriages that include one or two naturalised foreigners.

Unlike Japan, South Korea's government has been more active in changing public attitudes towards these multi-ethnic families:

Last November [2015], a revision to the Multicultural Families Act was made to put greater emphasis on changing biased views of these families, preventing discrimination of biracial children and encouraging more openness among Koreans towards these families.

This marks a shift in the government's policy, from merely integrating migrant spouses into the Korean society to more active efforts at promoting multiracial harmony. Details are being worked out and will be announced later.

While it's true that Korea's government is dragging its foot somewhat on the subject matter, there is a clear difference with Japan which has not really tackled the issue of acceptance in a significant way. In this respect, Korea is ahead--if only slight so, it's still a meaningful public policy difference.

Beware the Seoul speculator whose derivatives trading causes disorder elsewhere in the world.

There's an interesting illustration of financial globalization in how derivatives trading in South Korea (of all places) is apparently helping drive down not only European stock indices but even the Hong Kong dollar. Despite being removed from where the action is--Seoul is not usually regarded as a front-line financial center--the consequences of Korean derivatives trading has magnified movements in offshore markets. The knock-on effects are evident when markets are especially turbulent--as they have been as of late:

Korea hosts the largest and most liquid market in the world for options on single stocks — bigger than the US, even, according to bankers — and retail interest in derivatives does not stop there. In what looks like the latest example of a “butterfly effect” in global markets, last year Korean investors bought record amounts of so-called “autocallables” — a structured product offering an attractive yield. About $40bn are outstanding. 

The distinguishing feature of these structured products is that they tend to magnify volatility when the indices or underlying securities they are based on fall below a level known as the "knock-in" level which makes the derivatives (and therefore mark-to-market losses) active. When this happens, investors write put options--to sell at a certain price in expectation they may decrease--to hedge against future losses. All this activity introduces additional volatility:

Since these autocallables are two- or three-year deals, and most were sold last year, the final reckoning over who has lost what is some way off. The area of interest for now is their effect on other markets. The products in essence sell volatility. They work by offering investors a “worst of” basket of two or three reference securities — typically indices.

The sales pitch is that investors get a yield on top of their capital if the reference securities stay within a specified range. If they rally above it, investors are “knocked out” and get their money back with a bonus. If it falls below a specified point — usually between 40 and 50 per cent of the level, when the product was sold — they are “knocked in” and lose some capital.

Holders can be made whole if the index recovers all lost ground before the autocallable ends — hence it being difficult to gauge losses at this point. However, the nearer an index falls to that strike price, the more product sellers have to hedge, which they do via selling futures. This is what is weighing on the HSCEI, which was a popular inclusion in the first half of last year because of China’s soaring markets. But it is now down 46 per cent from its May 2015 peak — putting it right in the zone where issuer hedging will be at its highest.

To illustrate, consider the Hong Kong dollar. As speculative rumors swirled on breaking its 32-year-old peg to the US dollar, Koreans were forced to follow suit lest this become another source of losses:

Hong Kong indices are even more popular in Korean products because of the 32-year unchanged link between the Hong Kong dollar and its US counterpart. So imagine the fear among Korean sellers of autocallables last month on seeing the Hong Kong currency suddenly spike higher after Chinese authorities quashed speculative shorts in the offshore renminbi market. The result was additional weakening pressure on the Hong Kong dollar as Korean groups rushed to hedge.  

Who'd have thought the Koreans were introducing more volatility into global finance?

In East Asia, China and South Korea have generally gotten along better than either of them with Japan due to the latter's WWII-era imperialism. Nor does China have any major territorial dispute with South Korea--they only have minor tiffs over some rock. It should come as no surprise then that the Koreans are becoming financial innovators in a sense. You see, they will be the first sovereign issuers of yuan-denominated bonds in the mainland. Yes, of course there are already RMB bond issuances by offshore entities--the Asian Development Bank and the (World Bank's) International Finance Corporation come to mind.

But issuance by a sovereign entity? South Korea will be the first:

Korea is poised to become the first sovereign to sell yuan-denominated debt in China, setting a benchmark for companies seeking to expand in the nation’s biggest export market. The need for yuan funding is rising as Korean corporations boost investment in China, Song In Chang, the Finance Ministry’s director general, said in Seoul on Tuesday. The panda bonds will also allow Korea to diversify its foreign-currency issuance, he said.

China wants to increase the yuan’s global use and win its inclusion in the International Monetary Fund’s basket of reserve currencies. It agreed at an Oct. 31 meeting in Seoul between Korean Finance Minister Choi Kyung-hwan and Xu Shaoshi, chairman of the National Development and Reform Commission of China, to back the bond plan as well as direct trading in yuan- won in Shanghai. The Canadian province of British Columbia also said last month it’s in discussions to sell panda debt on the Chinese mainland as it seeks closer business ties with the world’s second-largest economy.

“Local investors have been interested in yuan-denominated bonds, but there were no credible benchmarks,” said Lee Jae-hyung, a fixed-income strategist at Yuanta Securities Korea, in Seoul. A sale by Korea’s government “will be a catalyst for issuance by local companies,” he said.

In effect, it's a trial balloon that, if all goes well, anticipates Korean multinationals also issuing panda bonds to fund their PRC-based operations.

Indonesia and S Korea apparently seek a seat at this table now.

It appears as though the United States is gaining the upper hand in signing FTAs in the Asia-Pacific after the TPP enlargement. With China's pan-Pacific equivalent not gaining any traction, the undecideds--countries that sat out the TPP negotiations to see how matters progress--appear to be more favorably disposed now to the American effort. Chalk this one up to the "bandwagon" effect: non-participants in the TPP negotiations fear being left out will cause their exports to be less competitive as those within the FTA benefit from lower tariffs. Make no mistake that the US swaying Japan greatly involved the former playing up the latter's fears about China:

[Former US trade negotiatior Ira Shapiro] believes that it was the rise of China that ultimately convinced Japanese Prime Minister Shinzo Abe to pursue TPP. If the TPP becomes reality, "China will have a choice of either making the changes necessary to join TPP or intensify its leadership of competing arrangements, as we've seen with the Asian Infrastructure Investment Bank," he said. "For the U.S. and Japan, it is important to set a model."

Let's begin with South Korea. Like Japan, it has traditionally been very careful about the terms of FTAs given the mandate not to offend domestic agricultural interests. However, with Japan making such concessions already with TPP, the Koreans are now more willing to do the same--at least slightly. In particular, the Japanese seek more automobile exports to Korea. In a manner of speaking, Japan got a head start over Korea and can now help dictate the terms for the latter's entry to its advantage:

South Korea's effort to be welcomed into the Trans-Pacific Partnership trade pact will provide Japan with an opportunity to regain lost ground in that country's automobile market. South Korean President Park Geun-hye expressed hopes that Japan will cooperate on this matter during her meeting with Japanese Prime Minister Shinzo Abe on Monday.

By cooperation, she is presumed to have meant Japan's quick approval, since all 12 TPP members need to agree to the entry of new members. Japan's stance is that it welcomes South Korea, since Abe has said before that he hopes to broaden the TPP's reach in Asia as a high-level trade pact. Japan had to promise that it will open up its market to the U.S. before joining the TPP.

Likewise, "South Korea will need to promise to drop tariffs on Japanese industrial products in exchange for approval of its participation," said a Japanese TPP negotiator. Currently, South Korea levies a tariff of 8% on Japanese autos and around 6.5% on Japanese chemical products.

Meanwhile, Indonesia's new President Joko Widodo is also in a semi-rush to get in after the conclusion of the aforementioned deal:

On his first official visit to Washington, however, Widodo pulled a surprise out of his hat. "Indonesia is an open economy," he was quoted as telling U.S. President Barack Obama. "We are the largest economy in Southeast Asia, and Indonesia intends to join the TPP..."

Indonesia, which has the world's fourth-largest population, has long been wary of free trade. This is largely because natural resources are its only major exports. When it comes to big multilateral deals, Jakarta has favored the Regional Comprehensive Economic Partnership -- a proposed agreement involving the Association of Southeast Asian Nations, China and India -- over the TPP due to its lower degree of trade liberalization.

But Widodo, recognizing the global liberalization momentum, appears concerned that staying out of the TPP would put Indonesia at a disadvantage. When he travels abroad, Widodo urges foreign businesses to invest in Indonesia as an export base. The TPP, though, will increase the appeal of member countries by reducing or eliminating tariffs on goods, provided a certain ratio of parts are made within the zone.

Nuff said: advantage America. China, what's your counter-proposal?

To the Lees, control of Samsung is their birthright. To Westerners, the Lees are not a corporate royal family.

The intricate web of cross-shareholdings characterizing Japanese and Korean multinationals has long befuddled and annoyed Westerners. In Japan, the keiretsu (cross-shareholding) system based on conglomerates' various companies owning each other's shares is deliberately meant to keep longstanding and closely-linked structures intact for the likes of Mitsui, Sumitomo, etc. In Korea, the chaebol perform a similar function. In more recent times, especially after liberalizations demanded of Korea in exchange for IMF emergency lending, these cross-shareholdings have been meant to keep minority (read: foreign) shareholders at bay.

As of late, the most pesky of these have been US hedge funds. Recently, there was a showdown for the very soul of Samsung over the succession of its ailing leader Lee Kun-hee. Samsung insiders wanted familial succession, whereas minority Western shareholders agitated for a more "democratic" selection process for the succession:

The Lee family that controls the Samsung conglomerate won its showdown with minority shareholders on Friday, but the vote still represents a watershed for corporate governance in the world’s 14th-largest economy. Though Samsung won, the bell is tolling for South Korea’s chaebol system of corporate control.

After weeks of pleading and foreigner-bashing by Samsung executives, shareholders narrowly approved the sale of Samsung’s construction arm to its de facto holding company, Cheil Industries. The transaction won 69.5% of the votes, barely more than the necessary two-thirds. The deal will help heir apparent Lee Jae-yong keep control of Samsung Group upon the death of his ailing father, Chairman Lee Kun-hee.

From the Western perspective, they are treated by Samsung the same way Argentina treats its creditors (more on the Southern American nation in a little while):

Opposition to the deal was led initially by the U.S. hedge fund Elliott Associates, which rightly argued that the transaction undervalued the purchase by as much as $7 billion. But the insider self-dealing also mobilized thousands of mom-and-pop shareholders and exposed the cronyism and political favoritism that have made the giant chaebol firms increasingly unpopular in Korea. Samsung’s more than 70 affiliates, linked through a complex network of cross-shareholdings, account for a huge chunk of South Korean gross domestic product, and Samsung Electronics is the world’s second largest tech company by sales after Apple.

But that high profile is all the more reason for Samsung to abide by modern rules of corporate transparency and respect for minority shareholders. Instead Samsung played on nationalist sentiment and drew on its political influence to prevail. In echoes of Argentina, Samsung claimed to be defending itself against “an attack by a foreign hedge fund seeking short-term trading gains.” But Elliott and the Canada Pension Plan Investment Board, another opponent of the insider deal, bought their shares on the open market. If Samsung wants only South Korean shareholders, it ought to say so and return to being a nonpublic company.

I am of two minds about this. While shareholders large and small should be treated well, Western shareholders have a much shorter-term orientation--as in the current quarter. Although it is difficult to construct a counterfactual argument, would Samsung have become the globe-spanning conglomerate that it is now if activist minority shareholders from the West were agitating for these sorts of things in the 60s or 70s?

My belief is that it's not merely a fight over "bad" Asian corporate governance against "good" American corporate governance. There is a cultural gap that demands more scrutiny than simply dismissing Korean practices as continuations of favoritism, crony capitalism, ignorance of shareholders rights and so forth. They really do things differently elsewhere, and the world is not merely America writ large.

Korea would save $$$ partnering Japan in hosting certain events, but it probably won't.

The out-of-control costs of hosting Olympic events is a well-worn trope by now. Unfortunately for South Korea, it's now its turn to feel the financial burn for the 2018 Winter Olympics in Pyeongchang. It was originally meant to promote development outside the overcrowded capital of Seoul, but like most of these Olympics, the costs are soaring and the local government officials don't know where to find the money to complete venues amid cost overruns. Actually, the IOC has become increasingly mindful of this phenomenon and recently passed a new provision allowing the co-hosting of the Olympics:

For years the International Olympic Committee ignored the rising costs and indebtedness associated with hosting the Olympics. But after Vladmir Putin’s $51 billion Sochi Olympics scared off several cities from even bidding for future games, the International Olympic Committee responded last December with a set of reforms. Among them was a provision allowing for games to be co-hosted across international borders, in order to lower costs for individual countries.

Though the provision wasn’t aimed at any particular country, Pyeongchang should be the first to make use of it. Since 2011, the prospective budget for the 2018 event has increased more than 50 percent, from an already steep $7.8 billion to $11.9 billion. (The final bill for 2006 winter games in Turin, Italy was around $1 billion.)

As of December, Pyeongchang still needed eight more facilities, including a $120 million sliding center where the bobsled and luge events can be held. But after shelling out $1.5 billion for a ski resort, Gangwon, the economically underdeveloped state where Pyeongchang is located, is already threatening to forfeit its rights to host the games if the federal government doesn’t chip in more money. (It's not clear what such a forfeiture would mean in practice.)

Enter Japan. More specifically, Nagano--the host of the 1998 Winter Olympics. It was held a long time ago, but the facilities there are still useful and, conveniently, are those which Korea has not yet built. Especially since these specialist venues just fall into disrepair after the games, why not eat some humble pie and ask for Japan's help? What's supposedly holding the Koreans back from this idea is having to work with the staunchly nationalistic Shinzo Abe, and this doesn't hold up well with Koreans still upset over being occupied during WWII:

Even if Pyeongchang manages to find the money it needs, that would just be the start of its troubles. As other Olympic cities have learned, maintaining Olympic venues after the conclusion of the games can be extremely expensive -- especially if nobody wants to pay to continue using them. (That problem has been particularly acute in Beijing, host of the 2008 summer games.) According to an analysis published last week, the cost of maintaining Pyeongchang’s Olympic venues will be approximately $18.9 million annually, including almost $3 million per year for the sliding center. Shortly after the latest round of IOC reforms, several news organizations reported that the IOC was urging South Korea to give up on the expensive dream of hosting the Olympics solo, and share the sliding events with Nagano, Japan, as a cost-saving measure.

But if the economic logic is hard to argue with, the political symbolism seems to be a tougher sell. Since the election in Japan of nationalist Prime Minister Shinzo Abe, tensions between Tokyo and Seoul -- always high -- have been on the rise. When South Korea’s then-Prime Minister Chung Hong Won politely dismissed the idea of sharing the games last December, it may have been because he was wary of the political and diplomatic costs of asking Japan to lend it a hand in 2018.  The same goes for last week’s petulant announcement by the head of Pyeongchang’s organizing committee that South Korea would only share the Olympics in the case of a natural disaster.

There is of course a precedent for the Japanese and Koreans co-hosting major sporting events. One of the most (financially) successful World Cups in recent memory was that in 2002 co-hosted by the Japanese and the Koreans.

But South Korea shouldn't only consider the symbolic costs of cooperating with Japan -- it should also consider the potential symbolic gains. The country's political leaders would be well-served by looking back to the 2002 World Cup they successfully co-hosted with Japan. It wasn't the preferred option for either Japan or South Korea, each of whom would have preferred to have had the honor of hosting on its own. But politics and practicality brought the two countries together. And the event is still universally cited as a success -- not only for the events on the field, but also because it marked the first time that geopolitical rivals co-hosted a major sporting event.

It makes much financial sense for South Korea to go down the co-hosting route given its current challenges, but pride gets in the way. Unfortunately, there will be a steep tab for that.

Making mobiles for the Man in Vietnam, AKA Samsung.

Unbeknownst to many, Vietnam has, in a number of respects, become the "Republic of Samsung." As labor costs in China have gone up as its development continues apace, it was inevitable that MNCs would move on to countries with relatively skilled workers and more competitive wages. Today's case in point is the Korean electronics behemoth Samsung. How reliant has Vietnam become on Samsung? The Nikkei Asia Review points out that Samsung subsidiaries are three of the four largest foreign investors in Korea; these subsidiaries account for about a fifth of all Vietnamese exports; and a slowdown in global smartphone sales could tip Vietnam into a trade deficit [!] If you're a Marxist, you'd say it's Korean imperialism:

[T]he Vietnamese economy has been growing more reliant on Samsung. In 2014, Samsung group companies ranked first, second and fourth in terms of new foreign direct investment projects in the country. In addition, Samsung accounts for nearly 20% of Vietnam's exports by value. The country could incur its first trade deficit in four years in 2015 if sales of Samsung smartphones slow.

Unsurprisingly, many Vietnamese are now wary of their government giving Samsung too many incentives to locate there, while other foreign investors are envious as well:

The biggest foreign direct investment project in Vietnam in 2014 was Samsung's $3 billion construction of its second plant in Thai Nguyen, according to the Foreign Investment Agency. The figure represents about half of total South Korean foreign direct investment in Vietnam last year.

As its dependence on Samsung increases, Vietnam is growing more dissatisfied with the company's local content ratio. Samsung procures some parts from Vietnamese suppliers, but as of last autumn, 80% of the components used in its products came from South Korean companies.

Critics say the Vietnamese government has done too much for Samsung, granting it tax exemptions [e.g., 10% instead of a 25% income tax] and reductions for more than 10 years and providing subsidies for employee education programs. An official at a Vietnamese financial institution said the government's preferential treatment of Samsung is so generous that it might seem unfair from the viewpoint of other companies.

Oh, and I forgot to add one more superlative: Samsung is also the largest foreign employer in Vietnam. What is very remarkable is that Samsung is ramping up its operations very quickly, having just put up its smart phone factory in 2009:

Samsung Electronics plans to hire 60,000 workers in Vietnam by July, bringing its number of local employees to around 100,000, more than any other foreign company.  The company currently has 84,000 workers on its payroll in the Southeast Asian country. The new employment plan, which takes into account attrition and retirement, comes as the electronics giant is looking to expand production and facilities at its plants in Bac Ninh and Thai Nguyen provinces in northern Vietnam.

Most of the new hires will be female factory workers, but Samsung is also looking to take on engineers, as well as recent graduates for possible executive-track positions. The company has already started recruiting extensively, and the first group of 2,500 additional workers is slated to join by the end of March. Samsung started production in Vietnam at its plant in Bac Ninh, east of Hanoi, in 2009. The plant currently produces smartphones, conventional mobile phones and parts for both, and the company plans to build new facilities for producing displays.

Like China before it, Vietnam offers the attraction of "market authoritarianism" to MNCs wary of labor disputes and other disruptions. So it's starting at a fairly low level with assembly work, but you have to begin somewhere. Still, the Vietnamese leadership is apparently gung-ho on Samsung. As labor costs in China inexorably rise, more will probably follow Samsung's lead in going to lower-cost locations. That is the way of modern manufacturing: it's just that Samsung has made major moves ahead of others being in a cutthroat, highly competitive global industry. Already, about half of its smart phones are made in Vietnam.

China, Samsung hardly knew ye.

De Niro, Scorcese and DiCaprio: hawkers of high-end casinos in Manila.

In a number of ways, the PRC authorities' crackdown on mainland officials gambling in Macau with state funds could not have come at a worse time for the special administrative region. With China slowing down anyway, fewer punters (gamblers in British-speak) are visiting Macau given stricter rules on bringing in gaming funds there from the PRC. To top it all off, so many other Asian countries are copying the Chinese playbook in opening glitzy new casinos of their own to steal business from Macau. There's been something of a bloodbath in the stocks of Macau casino operators as of late that has largely gone unnoticed outside of financial circles:

Gaming revenue will keep sliding through mid-year and dividends will be cut as the cost of new capacity eats into free-cash flow, leaving share valuations too expensive, said Jamie Zhou, an analyst at Macquarie Securities in Hong Kong. Zhou was one of just two analysts tracked by Bloomberg with sell ratings on Sands China Ltd. and Galaxy Entertainment Group Ltd. when he started covering the shares in December.

The two largest casino operators by market value in Macau have since tumbled at least 20 percent as China’s economic growth slowed to the weakest pace since 1990 and President Xi Jinping’s anti-graft campaign deterred VIP gamblers. While a gauge of Macau casinos rallied the most in two weeks on Tuesday as the revenue drop was smaller than some analysts predicted, Zhou is keeping his sell recommendation on the industry. “Macau is in a tough spot,” Zhou said in an e-mailed response to questions from Bloomberg News. “We believe dividends will be slashed across the board.”

The six main casino operators -- Sands, Galaxy, Wynn Macau Ltd., SJM Holdings Ltd., MGM China Holdings Ltd. and Melco Crown Entertainment Ltd. -- lost $89 billion in market value over the past year, according to data compiled by Bloomberg. An index of the stocks fell 2.5 percent on Wednesday, bringing its 12-month slump to 47 percent.

In a way, then, there is some cannibalization going on insofar as those opening casinos elsewhere in Asia siphoning business away from Macau are oftentimes these very same operators. For instance, the City of Dreams in Manila is run by Melco, with the promotional help of the likes of Robert De Niro, Martin Scorcese and Leonardo diCaprio. Which begs the question: why hire Italian-American actors to hawk the casino mainly to the Chinese?

Manila’s members-only Signature Club in Melco Crown Entertainment Ltd.’s City of Dreams casino has entrance signs in both English and Chinese, while Mandarin-speaking staff direct guests to cashiers, shops, and restaurants. The neighboring Solaire Resort and Casino owned by Bloomberry Resorts Corp. has suckling pig and Peking duck on the menu, catering to Chinese palates.

“There are a lot of excuses to go the Philippines; we always promote the Philippines not on the casino but the whole package,” Cristino Naguiat, chairman at gaming regular Philippine Amusement & Gaming Corp., said in an interview. “Even with the crackdown in China, we still had higher volume in terms of gross gaming revenue and in terms of junket and VIPs,” he said last month in Manila.

South Korea's resort destination of Jeju Island as catering to Chinese gamblers turned off by Macau's newfound strictness:

Macau casino revenue fell last year for the first time and may decline another 8 percent this year, according to analysts surveyed by Bloomberg. By contrast, South Korea and the Philippines will grow 16 percent and 33 percent respectively this year, gaining from the spillover of Chinese gamblers, Deutsche Bank analyst Karen Tang wrote in a note...

Operators such as Paradise Co. in South Korea are hiring Mandarin-speaking staff and offering VIP treatment including free flights, limousines and hotel stays to big spenders. Echo Entertainment Group Ltd. of Sydney and NagaCorp Ltd. in Cambodia cater to the junket operators who organize trips for Chinese gamblers with perks such as higher commissions, lower taxes and private jets.

“Premium mass players can be recognized as VIP players and treated better than in Macau,” said Lee Hyuk-Byung, vice chairman of Paradise, in an interview in Seoul. “And we have other attractions in Korea such as culture, fashion, food.”

Fancy plastic surgery or the, er, paid companionship of Korean actresses? Come to Korea:

Gamblers who bet at least $50,000 at Paradise’s casinos qualify for freebies usually available only to VIP players, Lee said. In Macau, the minimum needed to get similar perks from junket operators is about $500,000, according to CLSA data. The company also draws Chinese gamblers to the celebrity-obsessed country by touting its pop culture and offering recommendations of top Korean plastic surgeons, Lee said.

Operators have more risqué offerings too. A gambler who exchanges 300,000 yuan ($48,000) worth of chips can receive free flights to Jeju, tours with a Mandarin-speaking guide, and the companionship of a “third-tier” Korean actress or model, according to an e-mailed brochure from Shanghai-based tour operator CNS. A CNS travel agent, who would only give her name as “Xiao Qi”, confirmed the services when contacted by phone.

It begs the question of whether Macau will be able to complete the PRC-ordered diversification away from gambling if its cash cow is being slaughtered in the meantime, with no help from the killjoy Communists.

Headlines here in Asia have been dominated by the story of the Korean Air executive who went ballistic on a flight attendant because he had served her nuts in a bag instead of on tableware. Hence the "nut rage" label applied to Cho Hyun-ah, the daughter of the Hanjin (chaebol conglomerate) chairman that owns Korean Air. Talk about nuts: She boarded the flight at JFK headed for Incheon and ordered it returned to the boarding gate over macadamia nuts to unload the poor fellow. The flight attendant Park Chang-jin was even coerced to cover up the incident to Korean government investigators. Does that make this incident "Nutgate"?

[Cho] ordered him off the plane and forced the flight to return to the gate at John F Kennedy airport in New York City. After being confronted about the nuts, senior flight attendant Park Chang-jin told South Korea's KBS television network he and his colleague kneeled down before Cho. According to Park, Cho yelled at the crew to "call right now and stop the plane. I will stop this plane from leaving."

Park said when he returned to South Korea on a separate flight, five to six officials from Korean Air came to visit his home every day and asked him to tell investigators that Cho did not use abusive language and that he voluntarily got off the plane. On Friday, in her first public appearance since the incident, a gloomy-faced Cho bowed and said "I sincerely apologise. I'm sorry," before droves of journalists in an almost inaudible, trembling voice.

At any rate, the Koreans have been fascinated with this incident. Just as the Sewol ferry accident caused much soul-searching, so has this "nut rage" reawakened questions about corporate governance in South Korea. In particular, chaebol reform has been on the to-do list of the government for quite some time now. Aside from dominating the business environment and discouraging dynamic small- and medium-sized businesses, cozy government-business ties have long generated accusations of favoritism. That is, chaebol may be too big to fail, block dynamic new entrants, and worst of all, abuse their dominance in the overall Korean economy.

Auntie points us to a thought-provoking article in the Korea Times that discusses corporate governance in their nation: are chaebol really so prone to these kinds of abuses? In particular, why are these conglomerates not meritocratic like their Western counterparts? Prior to this incident which has resulted in Cho Hyun-ah becoming an unlikely successor to her father at Hanjin, she was on track to do so. Here Hanjin is being compared to Germany's BMW here owned by the Quandt family who are largely uninvolved in day-to-day operations:

[Cho Hyun-ah] has shown behavior typical of someone born with a silver spoon in their mouth. In contrast, BMW recently named 49-year-old production executive Harald Krueger as the successor to CEO Norbert Reithofer, starting from May. The CEO in waiting joined the automaker in 1992 as a trainee, working his way to the top of the corporate ladder of the 98 year old company. His 11 predecessors have also been professionals without direct ties to the Quandt family, which owns a 46 percent stake of BMW.

Business experts say independent management was key to making BMW what it is now. "With no intervention coming from the owner family, BMW CEOs can concentrate on management issues, and maintaining the firm's growth," a BMW official said. "Had the company been directly controlled by an owner family, it is uncertain whether BMW would have reached the status it enjoys today because owners turned CEOs might have found themselves distracted at work by issues related to their ownership," an industry source said.

Contrast this trainee-to-CEO success story to what's supposedly happening in Korea:

Korean Air is owned by Hanjin Group led by Cho Yang-ho, the son of the firm's founder; he controls the company with a 15.49 percent stake. His three children ― Heather [Cho Hyun-ah], Won-tae and Hyun-min ― hold less than 2.5 percent each. One of those three will likely become the chairman's handpicked successor, a typical leadership transition seen at family-run conglomerates in Korea.

"Perhaps the recent nut rage incident was one of the dismal side effects of such a dynastic leadership succession," said Kim Sang-jo, a business professor at Hansung University and chief of the People's Solidarity for Economic Reform. "With chances of landing a top seat guaranteed, they may not feel any guilt looking down on employees of their father's company and treating them like their servants. "This is a feudal form of employer-employee relationship that should disappear as early as possible."

A bigger problem, he pointed out, is that the dynastic succession could lead Korean Air to fall into the hands of what he described as an "unqualified" leader. "Cho will choose his successor from a limited pool of candidates or out of his three children," the professor said. "Nothing wrong would happen if there is a qualified person among the three and the chairman makes the right choice. If it's not the case, however, his selection would usher in a tragedy. It's a very risky deal."

Make no mistake that there remains a pecking order of globalization envy. Us folks in  developing Asia look up to Korea. In turn, Koreans look up to Germany which has a similar profile of being an export-oriented, manufacturing-based economy. Every so often we have one of these "why can't these !@#$%*+ Koreans be more like Westerners" despite the country being the most successful of Asians. IMHO folks are making too much of a high-profile incident, but suffice to say that "nut rage" has resurfaced concerns about Asian forms of governance that lay dormant for some time after the Asian financial crisis became yesterday's headline. Meanwhile, the incident has little direct bearing on the firm's performance.

UPDATE 1: The Korean transport ministry is said to be filing a case against her, too.

UPDATE 2: Singapore's Straits Times offers a more sympathetic story about how Cho Hyun-ah was able to make several improvements to Korean Air before the fateful incident. 

UPDATE 3: Cho Hyun-Ah has now been arrested for endangering fight safety.

Most office slaves would rather be elsewhere watching Girls Generation music videos.

The stereotype of Asians as colorless "worker bees" toiling away during hours and hours of white collar drudgery is, alas, not entirely made up. Actually, the system gears up young people to expect this kind of mindless effort, e.g., all-important examinations based on rote learning that determine access to higher education and hence future prospects. The workplace is not much better: consider the case of South Korea. Otherwise much lauded for its fearsome export industries and "cool" image, workers there are not particularly productive compared to their OECD peers. In fact, they are bottom of the barrel in productivity:

In 2012, each waged Korean employee worked for 2,092 hours, which was 420 hours more than the OECD average. The numbers were 1,765 for Japanese workers, and 1,334 for the Dutch. Meanwhile, the labor productivity per working hour was US$29.75 as of the end of 2011, whereas the OCED average was US$44.56. The Netherlands’ labor productivity per working hour amounted to US$59.73, in spite of the much shorter hours worked.

According to the Ministry of Employment and Labor’s survey carried out this year, 43.65 percent of employees in Korea worked overtime each day for at least one hour. Fully 25.8 percent of the respondents said that they worked overtime because it was considered natural, while 20.9 percent and 9.4 percent mentioned low work efficiency during working hours and pressure from their senior workers, respectively. Just 25 percent of the respondents answered that overtime work was helpful for their job performance.

Translation: Korean office workers often sit around doing not much of anything during regular work hours, and must also stick around afterwards it if they expect to stick around and be promoted. As a bona fide hater of Dilbert-style white collar office culture--which is generally insipid and unhealthy--I am reminded of the phrase "work smart, not hard" in this regard. If these senseless cultural expectations were dropped, these workers could (a) be more satisfied with their jobs, (b) have more time for their families, (c) use the time they do spend at the office more productively if the culture is oriented around actually doing something and (d) live more fulfilling lives.

Expat Richard Kocken even enumerates seven reasons for this low productivity. Some may strike Western readers as hilarious, but believe me, they are real:

1. Rigid structures and hierarchy - A byproduct of such rigid corporate structures is constant and unnecessary reporting to senior directors, as soldiers to a superior officer. 
2. Communication issues - Despite an enforced culture of regular drinking and socializing, Korean companies suffer from a lack of direct, honest, and effective communication. 
3. Mobile phones and online communication - A silent rule of Korean society is that talking in the office gives off the appearance of not working, and so workers are forced to send messages via the Internet, even if the person they want to talk to happens to be sitting right next to them. 
4. Hungover workers taking excessive breaks - Korean companies encourage and pay for workers to enjoy after-hour dinners and drinks together on a regular basis, believing that it improves loyalty and interpersonal communication between workers. 
5. Form rules over substance - During my time at a Korean company, one of the observations that I made was that co-workers would spend two to three days adding in an array of fancy-looking shapes, images, flow charts, and graphs to a PowerPoint presentation that contained roughly half a day of research. 
6. Poorly-equipped, older graduates - Korean graduate employees, despite extreme competition for jobs, are under-prepared for the workplace, and come with poor research and reporting skills. This is a side effect of an education system based around testing and lack of practical applications.
7. The Art of Looking Busy - In business or social situations both, Koreans have a penchant for giving off the impression of being busy. Rarely will you meet a Korean that will say they have relaxed recently. Being busy is the desired state and worn as a badge of honor. 

Death by overwork is probably not responsible for the Asian economic miracle, and it's high time that it be spent, well, more productively. Korea got ahead in spite of rather than because of this cultural blind spot. As Korea becomes more developed, I expect that it will come to have a more "European" work-life balance as slave-driving of this sort will no longer be suffered gladly--and for good reason.

To Gangnam, man, on the double! (wherever that is.)

Libertarians for the most part tout the ride-sharing service Uber as a way to avoid taxis whose need to be government-regulated allows them to charge exorbitant fares. With Uber, anyone who can afford a smartphone and a data plan can use his or her vehicle as a privateer taxicab. Break the monopoly! Or that's how Uber works in theory. In practice, local governments the world over have taken legal action against the app's developers for skirting regulations on who can offer tax services in their jurisdictions. I do not exaggerate when I say it's Uber against the world's officialdom.

Having come to Asia, Uber is under assault after complaints from taxicab services wary of being marginalized by the app. While Uber has not yet established as large a presence as it has in some Western nations, it's best to beat it up before it establishes a foothold. In tech-savvy Seoul--supposedly the most wired city in the world--the local government seeks a ban on Uber. It also plans to develop an official taxi app to counter it by the end of the year:

The Seoul city government said Monday it would seek a ban on a car-hailing smartphone app from Uber Technologies Inc., joining a global battle by municipalities and traditional taxi services against the service.

The local authority said in a statement that Uber is illegal under South Korean law, which forbids fee-paying transport services using private or rented motor vehicles unregistered with the authorities. The city added that it will launch in December an app that will provide similar features to Uber for official taxis, such as geo-location data on cabs nearby, information about them and their drivers, as well as ratings.

In India, Uber has come up against an even more formidable foe: the central bank. Because Uber's payments are handled by an offshore entity, the Reserve Bank of India is using a stipulation that payments-handling mechanisms must be locally based to effectively render Uber illegal:

Credit card rules, another road block for [Uber] which has been described as illegal by city authorities. And what's India done to put the brakes on? Well, the one stepping on the brakes is the RBI [Reserve Bank of India], the central bank.

It's closed a loophole. All actions made on India-issued credit cards have to go through a two-step procedure. For Uber users that means one additional step to the payment system and if they want to comply with the new rules, it would have to change its app or adopt a different model totally.

The actions are free [of obtaining a taxi license] with pretty much with Indian rivals have to do. This is what local taxi companies have been complaining about. [All Uber] payments are collected and transferred to a Dutch bank and the procedure goes against India's [foreign exchange control] regulations and in a way, this is what the RBI is trying to address. 

To be more specific, the RBI regulations in question concern limiting capital flight emanating from foreign exchange transactions:

 "It has come to our notice that there are instances of card not present transactions being effected without the mandated additional authentication validation even where the under lying transactions are essentially taking place between two residents in India," RBI said in its circular issued on Friday. A transaction is considered local where both the purchaser and service provider are in India.

"It is also observed that these entities are evading the mandate of additional authentication by following business models which are resulting in foreign exchange outflow. Such camouflaging and flouting of extant instructions on card security, which has been made possible by merchant transactions being acquired by banks located overseas resulting in an outflow of foreign exchange in the settlement of these transactions, is not acceptable as this is in violation of the directives issued under the Payment and Settlement Systems Act 2007 besides the requirements under the Foreign Exchange Management Act, 1999," the RBI said. 

Also see Quartz discussing the politics behind this move. Talk about having enemies in high places. Unlike Uber and its fans, I am hardly convinced that they are on the right side of technological history. Are taxis the buggy whips of the early 21st century