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Who Owns South Korea? -NYTimes Article
Kono10
post May 4 2011, 03:51 PM
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QUOTE
Who owns South Korea?
By Philip Bowring
Published: July 20, 2004

At one level South Korea represents a triumph of globalization over economic nationalism. Yet because of the head-in-the-sand policies of the Seoul government this could well turn sour.

Foreigners now own most of the commercial crown jewels of South Korea, the newest and seemingly most nationalist member of the developed world. Whether it is the world's leading chip maker and mobile phone challenger, Samsung Electronics, or the world's largest and most profitable steel producer, Pohang Iron & Steel, or Korea's major financial groups Kookmin and Shinhan, most of Korea's high-profile companies are now more than 50 percent owned by foreigners. In some cases the foreign stakes go above 70 percent. Foreigners now account for 44 percent of the total Korea stock market capitalization of around $360 billion

The statistics are especially remarkable given that less than a decade ago foreign ownership of equity in Korean companies was highly restricted. Even when the nation joined the OECD in 1996, liberalization was at snail's pace. It took the Asian financial crisis and strong-arm IMF and creditor tactics to force Koreans to accept almost unrestricted foreign ownership.

Koreans still often express resentment at how the sudden withdrawal of foreign bank lending in 1997-98 caused a collapse in the Korean currency and asset values. The crisis opened the way to equity capital liberalization and made it possible for foreigners to acquire large portions of Korean commerce and industry at very depressed prices.

Nor was this just a one-time process. The foreign buying of Korea has continued steadily, and with occasional big waves. Over the past year some $25 billion in new foreign portfolio equity has arrived.

So far there has been no major backlash. Koreans may be uncomfortable with the numbers, but they can take comfort from the fact that in most cases foreign ownership is fragmented and management control rests firmly with Koreans — frequently with the families of the former major shareholders. Still, resentment of foreigners, especially when they try to exercise their rights as shareholders, lurks not far below the surface.

Yet Koreans are failing to acknowledge that they themselves now bear the main responsibility for the foreign capital invasion. Instead of buying their own companies, they are investing in government bonds, houses and U.S. debt.

Despite foreign buying, Korean equities continue to be priced at a fraction of overseas equivalents. The Korean stock market is selling on nine times its historic earnings compared with 21 for the S&P 500, 14 for London, 15 for Taiwan, 16 for Hong Kong or 32 for Japan. The foreign owners are even collecting dividend yields of around 2.5 percent — as much as Koreans are earning on their massive holdings of short-term U.S. debt.

The fact is that individual Korean savers are put off equity investment by the volatility of the market, and by memories of 1997. In turn, volatility is a result of the lack of Korean institutional investment, which is a direct result of laws forcing the majority of Korea's vast household savings held in insurance and pension funds into bonds and fixed deposits. While foreigners buy their farm, Koreans are buying bonds.

The situation grows more ridiculous by the day. The government is in the process of issuing vast quantities of won-denominated bonds as a "war chest" in order to be able to sell won and buy dollars to prevent the exchange rate from appreciating. This obsession with maintaining an undervalued currency will result in further expansion of bloated foreign reserves. These are now $230 billion — far more than the foreigners have spent acquiring their 44 percent of Korean equities.

The Korean government's failure to let market forces determine the exchange rate is leading directly to the foreign acquisition of Korean assets by keeping them cheap in dollar terms and channeling Korean savings into U.S. consumer debt rather than into ownership of the true pride of Korea — Samsung, POSCO, etc.

Such dumb policies could spark both a nationalist backlash in Korea and a trade backlash by Korea's trading partners.


Please Discuss!

Keep in mind this article was written in 2004. Foreigners have increased their ownership of Korean assets and equities (ie Foreigners own 70%+ of Samsung as of late)

Article: http://www.nytimes.com/2004/07/20/opinion/...ing_ed3__1.html

This post has been edited by Kono10: May 5 2011, 12:30 AM
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tom2011
post May 4 2011, 08:09 PM
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LOL.

Yup, look at the article, written in 2004. You see, it's just that the author Philip Bowring does not have a very good track record with the economy. Case in point:

http://asiancorrespondent.com/32319/austra...philip-bowring/

LOL. And you should have read the article he wrote exactly 5 years later in 2009, with his article in NY Times, "Korea Rising". Four years earlier, according to him, South Korea was owned by foreigners and is doomed. Five years later, he writes about South Koreans in all over South East Asia, as investors. All of a sudden Korea is rising. LOL. Geez.. Make up your mind. LOL.

This post has been edited by tom2011: May 4 2011, 08:10 PM
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KraterosHellas
post May 4 2011, 08:15 PM
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he raises very valid points. seriously koreans have dangerous levels of hubris about their accomplishments that they're wilfully choosing to ignore these very sad statistics and trends. what is ur government doing about this?
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KochiGachi
post May 4 2011, 08:19 PM
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^ That's not yours to worry about my fake Iranian friend.
Stop trolling, you can't read Farci, Korean and even Chinese.
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Chan-Ho
post May 4 2011, 08:21 PM
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Trolololol.

This post has been edited by Chan-Ho: May 4 2011, 08:22 PM
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Kono10
post May 4 2011, 08:28 PM
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QUOTE (tom2011 @ May 4 2011, 09:09 PM) *
LOL.

Yup, look at the article, written in 2004. You see, it's just that the author Philip Bowring does not have a very good track record with the economy. Case in point:

http://asiancorrespondent.com/32319/austra...philip-bowring/

LOL. And you should have read the article he wrote exactly 5 years later in 2009, with his article in NY Times, "Korea Rising". Four years earlier, according to him, South Korea was owned by foreigners and is doomed. Five years later, he writes about South Koreans in all over South East Asia, as investors. All of a sudden Korea is rising. LOL. Geez.. Make up your mind. LOL.


Yes, I also read that article, but it doesn't change the FACT that foreigners benefit from the "rise." sure.gif Talktohand.gif
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KochiGachi
post May 4 2011, 09:11 PM
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QUOTE (Kono10 @ May 5 2011, 11:28 AM) *
Yes, I also read that article, but it doesn't change the FACT that foreigners benefit from the "rise." sure.gif Talktohand.gif


No you didn't when you've posted quotes from old article, you're just insecure about your original post and have to post that so obvious comment to back it up, but just dig your own grave. Wasn't posting same topic twice will earn a week of temp ban from this forum?

http://www.asiafinest.com/forum/index.php?showtopic=265933
QUOTE (Tenjikuronin @ May 4 2011, 12:47 AM) *
^Quit double posting. I've combined your posts for you this time, but next time you double post you will be temp banned for a week.


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Kono10
post May 4 2011, 10:08 PM
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QUOTE (Chan-Ho @ May 4 2011, 08:21 PM) *
Trolololol.


addressing a serious matter is considered "trolling" to you? Talktohand.gif
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DOUBLEMINT
post May 4 2011, 10:20 PM
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Whats so horrible about foreign investment?What did korea lose?Seems like a win-win to me.
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Kono10
post May 4 2011, 10:25 PM
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QUOTE (DOUBLEMINT @ May 4 2011, 11:20 PM) *
Whats so horrible about foreign investment?What did korea lose?Seems like a win-win to me.


There's a difference between foreign investment and foreigners owning most of a country's assets.

This post has been edited by Kono10: May 14 2011, 03:48 PM
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KaptainAmeriKa
post May 4 2011, 11:49 PM
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Globalists own everything now a days. Heck even America is being sold to Chinese.
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Joseon
post Dec 11 2011, 09:05 PM
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okay so because the IMF pillaged South Korea's economy, CHan-ho Kochi Gochi, and Tom are going to gang up on the op with no evidence whatsover regarding how the IMF tookover the economy of South Korea. I means it is enough that South Korea is a puppet to the UN. BUt what pisses me off is that South Korea can't even run their own economy anymore.

It's really disgusting to know that there are White pigs that stole billions of dollars of Korean's hard earned worok.. While, the Korean serfs continue to work for the powers that be, without truly knowing who they are truly serving..

And it's people like Chan-ho and the rest of the gang that continue to propagate the lie that the South Korean people are a free republic that can control its economic destiny.

I already showed documents after documents of evidence showing how the IMF tookover the South Korean economy..
IF you people still don't get it, you are either military intelligence, or hopefully lost. I think the former is true
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Joseon
post Feb 4 2012, 09:04 PM
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QUOTE (Kono10 @ May 4 2011, 11:08 PM) *
addressing a serious matter is considered "trolling" to you? Talktohand.gif

i think chan ho works for the canadian military.. he sold out to Canada and the crown.
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Joseon
post Feb 9 2012, 07:42 PM
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fact that nobody wants to discuss this tells you alot about this so called Korean chat.
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