Aurelia Butler

BENGALURU (Reuters) – The Bank of Korea will opt to support a rapidly slowing economy by holding its main interest rate at 3.50% on Tuesday, according to a Reuters poll of economists that showed a slim majority now expect a 25-basis-point cut by the end of 2023.Policymakers at the BoK, who have raised rates by 300 basis points since August 2021, are wary of overtightening an export-dependent economy that is on the brink of a recession, especially when global growth is also slowing.Inflation eased to a one-year low of 4.2% in March, but it is still double the BoK’s 2% target and not expected to get to that level for at least another year.All but one of 40 economists in the April 3-6 Reuters poll expected no change to the 3.50% base rate, already the highest since late 2008, at the April 11 meeting. Only one forecast a 25-basis-point hike to 3.75%. “The Bank of Korea has become less hawkish and is almost certain to leave interest rates unchanged,” said Dave Chia, an economist at Moody’s (NYSE:MCO) Analytics.”Considering weak consumption and high household debt, further rate hikes would be devastating to lower-income earners and economic growth. The recent easing of inflation is good news, but volatile oil prices still present a risk.”BoK Governor Rhee Chang-yong told reporters after the February monetary policy meeting that the central bank would not resume its rate hikes if inflation continued to moderate.The risk of a prolonged economic slowdown has fuelled market bets that the central bank will cut rates by the end of the year. While a majority of economists in the poll expected the base rate to remain at 3.50% until the end of the third quarter, just over half forecast at least one rate cut by the end of 2023.The BoK’s decision to pause policy tightening is in line with several other major regional central banks who have paused their post-pandemic tightening cycles, such as the Reserve Bank of Australia and the Reserve Bank of India.South Korea’s economy was expected to grow 1.2% in 2023 and 2.3% in 2024, while inflation was forecast to average 3.3% this year and 2.0% next year.(For other stories from the Reuters global long-term economic outlook polls package:) More

South Korean biotech companies are working to diversify from China in anticipation that the US could tighten export restrictions on the sector to bolster its domestic industry and curb Chinese growth.The Biden administration has identified biotechnology and biomanufacturing as strategic industries and is expected to introduce more specific measures within months. The concerns in South Korea over one of its most important sectors for growth also highlight the collateral damage for third countries from rising tension between the US and China over supply chains and technology. “We’re trying to reduce our reliance on cheaper raw material imports from countries like China and develop more domestic materials to secure supply chain stability as the US-China conflict intensifies,” said a spokesman for the Korea Pharmaceutical and Bio-Pharma Manufacturers Association. The US has been increasing the number of export controls on China. Last year, Washington introduced expansive chip export restrictions in an effort to slow its technological progress. Japan and the Netherlands have also restricted China’s access to cutting-edge technology. Washington is seeking to reduce US reliance on China for new medicines and products. In September, the White House issued two executive orders directing US government agencies to identify actions to “mitigate risks posed by foreign adversary involvement” in biomanufacturing supply chains and to enhance biosecurity in domestic infrastructure. Executives at South Korea’s top biotech companies — Samsung Biologics, SK Bioscience and Celltrion — are increasingly concerned about the potential fallout from Washington’s policies. “I am afraid that our products produced here could face higher tariffs in the US or be excluded from potential tax credits,” said an executive at one of the country’s leading biotech groups. Industry executives and analysts in the US suggest the policy shift will result in closer scrutiny of foreign transactions and could affect investment flows to companies that rely on China for parts of their supply chain. “From the White House’s point of view, these executive orders are very China-focused,” said John Murphy, chief policy officer at Biotechnology Innovation Organization, a lobby group representing biotech companies in the US and more than 30 other countries. “The concern we have is that Chinese investment is very widespread. How critically will US authorities look at a South Korean conglomerate’s proposed investment in the US if there is any Chinese money in that venture?” Gibson Dunn, a US law firm, warned clients that it expected the number of foreign investment transactions reviewed by US authorities to grow following the executive orders. In March, the US added several units of BGI Group, a Chinese genetic sequencing company, to its entity list restricting technology transfer, saying that BGI’s programme of “collection and analysis of genetic data present a significant risk of diversion to China’s military”.

In response to the rising tension between the US and China, South Korean chip companies Samsung Electronics and SK Hynix, along with automakers and battery producers, are expanding their North American operations. The country’s pharmaceutical companies have recently stepped up efforts to expand their overseas presence through acquisitions of US peers. The Korean groups have been producing Covid-19 vaccines and other drugs for multinational companies, including AstraZeneca and Moderna. Korean biotech groups also manufacture copycat drugs called biosimilars, designed to compete against expensive, branded biological drugs.Samsung Biologics, the world’s largest contract drugmaker, has opened sales offices in Boston and New Jersey and is seeking to build plants in the US and Europe to be closer to its main customers. More

While major Japanese firms concluded annual labour talks with the largest pay rises in about three decades, higher prices have demoralised consumers as the world’s third-largest economy faces uncertainty from a global slowdown and a new central bank chief.Inflation-adjusted real wages, a gauge of households’ purchasing power, dropped by 2.6% in February from a year earlier, following a 4.1% fall in January that marked the fastest decline in nearly nine years.Total cash earnings, or nominal wages, posted a 1.1% year-on-year gain in February, faster than a 0.8% growth in January.Yet the nominal pay growth fell short of the 3.9% consumer inflation rate used to calculate pay in real terms, which includes fresh food but excludes owners’ equivalent rent, although the pace of inflation cooled from 5.1% in January, due to the effect of government subsidies to curb utility bills.Overtime pay, a gauge of business activity, rose 1.7% year-on-year in February, after a revised 0.5% growth the previous month.Special payments fell for a second month by 1.7% in February, after a revised 1.3% drop the previous month. The indicator tends to be volatile in months outside the twice-a-year bonus seasons of November to January and June to August.The following table shows preliminary data for monthly incomes and number of workers in February:—————————————————————-Payments (amount) (yr/yr % change)Total cash earnings 271,851 yen ($2,072) +1.1-Monthly wage 267,061 yen +1.2-Regular pay 248,254 yen +1.1-Overtime pay 18,807 yen +1.7-Special payments 4,790 yen -1.7—————————————————————-Number of workers (million) (yr/yr % change)Overall 51.609 +1.8-General employees 35.106 +0.8-Part-time employees 16.503 +3.6—————————————————————-The ministry defines “workers” as 1) those employed for more than one month at a company that employed more than five people, or 2) those employed on a daily basis or had less than a one-month contract but had worked more than 18 days during the two months before the survey was conducted, at a company that employs more than five people.To view the full tables, see the labour ministry’s website at: ($1 = 131.2600 yen) More

(Reuters) -Tesla Inc on Thursday nominated co-founder and former Chief Technology Officer JB Straubel to the board at a time when some investors have expressed concern about a lack of succession planning at the electric carmaker led by Chief Executive Elon Musk.Tesla (NASDAQ:TSLA) also named Tom Zhu, who led construction and operations of Tesla’s Shanghai factory, as senior vice president for automotive operations. This makes him one of the four executive officers at Tesla, along with Musk, Chief Financial Officer Zachary Kirkhorn and powertrain head Andrew Baglino.Some Tesla investors have expressed concern that Musk’s acquisition and leadership of Twitter, which he bought for $44 billion last year, could stretch the billionaire thin and distract him from running the carmaker. Tesla shares posted their steepest annual drop last year, hit by concerns about Musk’s attention to Twitter and softening demand for electric vehicles in China, the United States and elsewhere. Tesla shareholders are set to vote on May 16 on an investor proposal for the company to publish a report on “Key-Person Risk”, reflecting concerns that the carmaker relies too heavily on Musk’s leadership. The proposal seeks to identify key persons, succession processes and other “actions to ameliorate the impacts of their potential loss.” The board recommends voting against the report, saying the proposal “would cause unnecessary competitive harm to Tesla.” James Murdoch, a Tesla director, testified in court in November that Musk had in the last few months identified someone as a potential successor to head the electric carmaker, without naming the potential successor.UNDERSTATED If elected at the annual meeting on May 16, Straubel would succeed Hiromichi Mizuno, who will not stand for re-election. Straubel joined Tesla in 2004 and spent 14 years as the chief technology officer. He has been credited with Tesla’s battery cell design and also led the construction and concept of Gigafactory Nevada and the production of Model 3.Tasked with Tesla’s groundbreaking battery technology since Tesla’s early beginnings, Straubel directed development of the plan to make sleek electric cars powered by bundled laptop batteries. The understated Straubel had been seen as a good partner for showy Musk, before stepping down in 2019 when the automaker was grappling with losses. Straubel has since founded Redwood (NYSE:RWT) Materials Inc, a battery recycling company. On Thursday, Tesla also nominated Musk and board chair Robyn Denholm to be reelected as directors to the eight-member board. More