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THE INVESTOR

Economy

[DECODED X] Up to speed

  • PUBLISHED :October 24, 2017 - 11:38
  • UPDATED :October 24, 2017 - 11:45
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DECODED X is more than just news.

It’s a weekly brief of critical political and economic events in Korea and their takeaway, created by The Investor staff for an exclusive group of opinion leaders.

To ensure content quality, DECODED X is offered as a paid service.

Corporate annual subscription fees are set at US$3,000, but The Investor is handing out special discounts this year.

For more details, please contact Monica Lee (jylee@heraldcorp.com), or call 82-727-0616. You can also get in touch with Editor-in-Chief Jemmie Kim (jemmie@heraldcorp.com).

In the meantime, enjoy the highlights of the Oct. 23 issue of DECODED X.


UP TO SPEED

It’s been just about a year since the Choi Soon-sil Gate broke, but for Samsung, which has been “out of it” ever since it was found to be “involved,” it feels like a decade.

With all the leaders out of the picture -- we don’t have to mention Lee Kun-hee is still not quite himself -- there’s no one to control a company that’s used to being controlled. 




“Samsung is relevant (in the autonomous vehicle area). But they are half a step behind compared to where the leaders are,” said Jeremy Carlson, principal analyst and manager of autonomous driving and mobility at IHS Markit, a global market tracker.

“Samsung has a license to test (autonomous) vehicles on roads in California. But there are 20 other companies who acquired a license before it.”

But the system is sturdy at Samsung, and with M&As being the fastest way to grow when technological advancement seems a tad out of reach, the Korean tech giant has been doing just that.

The Korea Herald recently uncovered a scoop involving Samsung’s investment in Chinese AI developer DeePhi Tech, which possess deep-learning technologies.

“Samsung has made quite a large investment in DeePhi Tech, which a group of Korean developers who met the startup’s officials found surprising,” said a source.

“Samsung appears to have made considerable investment in the Chinese company, in line with the Chinese government’s move to foster homegrown AI tech firms. The investment could have been made out of political considerations, not necessarily due to the company’s technological prowess.”

It’s the second investment Samsung has made in foreign AI tech startups following a US$30 million investment in UK-based Graphcore last October.


THE JURY IS IN

One of Moon Jae-in government’s first policy initiatives was to go anti-nuclear. Not just for weapons, but in energy, too.

But since it was a big decision, the government decided to take an unprecedented step and formed a so-called “citizen jury” of 471 people who were given the mandate to decide for the government and public. 




On Oct. 20, the jury voted to continue building two nuclear plants that have already guzzled up trillions of won of tax money.

Putting something to a vote is all quite democratic and fair. But because the government wanted to be fair, and not “right,” it wasted three months of time and money.

On the bright side, perhaps this was something that had to happen.

Just short of 60 percent of the jury said the nuclear plants should stay, and ironically, the fact that the decision was made NOT by the government -- which, please remember, is actually mandated by the people to make decisions on behalf of the country -- but by the people lends it more authority.

But it wasn’t all bad news for the Moon Jae-in administration, since the majority also wants to eventually cut down on nuclear energy


SAVED BY THAAD

Seoul’s THAAD row with Beijing is not bad news for all. For some Korean companies, it’s a blessing in disguise.

Sources have been saying for a while now that even before THAAD, Korean companies like Hyundai Motor had been struggling.

Hyundai now has an excellent excuse to blame for its lagging sales: THAAD.

THAAD has also become a good reason to close down money-losing shops in China without appearing to wimp out, to spend less on advertisement, and even a great excuse for plummeting stock prices.

THAAD rules!


BICYCLE FOR MANY

MOBIKE is one of the hottest bike-sharing apps on the block, and Koreans will soon have a chance to hop on.

It will soon begin services in Korea, starting with Suwon City, which has been upping the initiative to become an eco-friendly city.




So what’s so neat about Mobike? It’s the world’s first cashless and station-free bike-sharing platform. It’s available in 180 cities around the world, and boasts 30 million rides a day.

And it’s a big deal, because Korea is on a mission to cut down on CO2 emissions and make bicycles a more permanent part of the landscape, like Japan.

Mobike users have so far cycled over 5.6 billion kilometers, and this is believed to have reduced CO2 emissions by more than 1.26 million tons, according to Mobike.

Costs will be just 500 won for every 30 minutes. All you have to do is unlock a Mobike using your smartphone and an e-wallet.

Also to note, Mobike is backed by China’s tech giant Tencent Technologies and is estimated to be valued at US$3 billion.


THE BIG HIKE


It was an expected move. After lawmakers discussed on Oct. 20, it’s now guaranteed that taxes on heat-not-burn cigarettes like HEETS by Philip Morris and Glo by BAT are going to be raised to 90 percent of taxes on ordinary cigarettes.

For those who might not know, HNB, or e-cigarettes, are lit up by heating the cigarette, and not burning it. This is supposed to make it “healthier,” or at least “less harmful” than ordinary cigarettes. Philip Morris’ e-cigarettes currently have a 2.5 percent market share.

So far, taxes on e-cigarettes have been at around 50-60 percent of those on conventional cigarettes.

If taxes go up, it’s only natural for consumer prices to go up.

Right now, they cost 4,300 won, which is cheaper than burning types that on average cost 5,000 won.

KT&G will soon roll out its version of e-cigarettes, so the decision will have an impact. But sources say, it’s still too early to know, and that tobacco firms may just decide to keep prices in place for now.


Click here for DECODED X Oct. 23


Don’t miss:
DECODED X Oct. 13
DECODED X Sept. 29
DECODED X Sept. 22
DECODED X Sept.15
DECODED X Sept. 7
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