Economy

A contender for the greatest of financial commentary clichés is the insight that markets do not like uncertainty.Here’s a variant: businesses do not like drama. This, like its markets forefather, is obvious. But it is worth saying given that UK policy since the Brexit vote has had more theatrical twists and turns than your average episode of The Only Way is Essex.The latest is a real humdinger. Chancellor Kwasi Kwarteng’s “fiscal event” was meant to be a break from consensus, designed to shake a sluggish economy from its slumber. Instead, the currency has plummeted, gilt yields are soaring, markets are increasingly betting on emergency action from the central bank, and the main debates are about the type of carnage this might spark in the housing market and the similarities of the UK to an emerging market. This, I think it’s fair to say, is unhelpful to Kwarteng’s end-goal: to boost the UK’s economic growth rate, in large part by policies to “unlock” — to use the phrase peppered throughout the document — business investment. There is widespread agreement, on the left and right, that the UK growth problem is rooted in ailing investment, something Resolution Foundation calls a “recipe for relative decline”. Private business investment was only 10 per cent of gross domestic product in 2019, behind France, Germany and the US on 13 per cent. It explains most of the productivity gulf between the UK and near neighbours. It has stagnated since 2016 and got worse: while other economic activity rebounded after the pandemic, business investment remains well below the pre-Covid peak.Vanishingly few people really believe that tax cuts, for businesses or wealthy people, are enough to reverse this dismal trend. Nor does the government, really: behind the fiscal profligacy that prompted market panic, the Kwarteng non-Budget included broad brush promises on the types of supply-side reforms that might make a real difference: on immigration, planning, infrastructure and skills. Unlikely as it might sound, many business people like this sort of stuff even more than they like tax cuts.

They aren’t prepared to bank on it, though. In the near-term, there is the scent of chaos in the air: fast-rising interest rates make it easier to sit on money in the bank, rather than risk a complex investment project that is now more expensive to finance. Costs of imported goods or commodities are rising, as sterling sinks. The idea that there will be a buoyant end market in terms of demand for whatever you’re investing to build or produce seems rather doubtful. But the UK government has a particular credibility problem. This is partly because its pledges lacked detail. It is partly because loosening immigration rules, or liberalising planning, are politically fraught for the Conservative party. And it’s partly that these are long-term commitments after years of what John Van Reenen at the LSE’s Programme on Innovation and Diffusion calls “policy attention deficit disorder.” The country is, after all, suffering whiplash after its third wholesale change of direction and ideology in six years. The government remains incapable of acknowledging that erecting the highest barriers possible to trading with our most important partner has hurt the economy’s productive capacity.The new administration is also promising to combine free market, small state ideology with policies that require a hefty dose of government direction to be successful. Investment zones can just displace existing activity or give tax breaks for what is happening anyway: forcing them to go where incentives or lighter regulation can alleviate genuine constraints matters, said one policy wonk, and “we don’t know if the government has got the staying power or attention to detail”. One way to mitigate these concerns is by creating independent bodies with mandates to cut through political noise and evaluate progress: such as the Office for Budget Responsibility, which wasn’t asked to assess the impact of this fiscal fiasco, or the Industrial Strategy Council, which was unceremoniously abolished after just two years.Another is to establish a record of sensible, well-crafted policy that actually delivers on the headlines. Instead, the chancellor went for broke on tax cuts, with little detail on the changes that might generate the growth to pay for them. You can’t blame business for upping their “drama discount” when contemplating UK investment [email protected]@helentbiz More

SYDNEY (Reuters) – Sterling steadied on Tuesday, but was perched above its record low only thanks to soaring yields on British debt and the hope of a response from policymakers or politicians, with its gyrations unnerving markets to the benefit of the dollar.On Friday and again on Monday the pound plunged, finding a record low of $1.0327 as investors question Britain’s economic gambit of unfunded tax cuts to spur growth.It has bounced back to $1.0770, helped by the Bank of England promising to monitor markets and hike if necessary, and a bloodbath in gilts that has driven an incredible 100 basis point rise for two-year yields in just two trading days.BOE chief economist Huw Pill appears at a policy forum at 1100 GMT and his response to the turmoil will be closely watched and analysts are wary of the currency’s recovery.”We should expect the pound to remain volatile in the week ahead as market participants await to see how policymakers in the UK respond to the loss of confidence in the pound and gilts,” said Lee Hardman, currency analyst at MUFG Bank.”Without timely policy action this week cable could quickly fall below parity.”Sterling has dropped 5% since Thursday and 21% this year against a backdrop of an ever stronger dollar.The greenback has climbed as expectations solidify for U.S. interest rates staying higher for longer, and as sudden moves like the pound’s rattle traders. As the pound fell on Monday, the dollar surged to new highs on the euro and many more.”Everyone’s got this hope that the dollar is peaking and peaking and peaking, but it’s just been far too premature,” said Paul Mackel, global head of FX research at HSBC in Hong Kong.”The Fed is firmly hawkish and global growth is weakening, and you put those forces together alongside higher elements of risk aversion – it’s all pointing to a strong dollar if not a strengthening dollar.”Japan intervened to support the battered yen for the first time in decades last week, which has been enough to stave off too many further losses for the yen, for now.The yen last traded at 144.39 per dollar.The U.S. dollar index, which measures the dollar against a basket of six majors, hit a 20-year high of 114.58 and was off that a bit at 113.87 on Tuesday.The euro made a two-decade low of $0.9528 and is weighed down by an energy crisis and new risks of war in Ukraine escalating. It was a cent above that at $0.9626 in Asia trade.The Aussie and kiwi hit 2-1/2 year lows on Monday and were attempting bounces on Tuesday, with the Aussie up 0.3% to $0.6479 and the kiwi up 0.8% to $0.5670. [AUD/]China’s yuan also hit a 2-1/2 year low on Monday and was steady at 7.1639 on Tuesday.========================================================Currency bid prices at 0031 GMTDescription RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar $0.9637 $0.9609 +0.31% +0.00% +0.9638 +0.9584 Dollar/Yen 144.3500 144.7000 +0.00% +0.00% +144.7050 +0.0000 Euro/Yen 139.12 139.07 +0.04% +0.00% +139.1300 +138.7100 Dollar/Swiss 0.9911 0.9926 -0.12% +0.00% +0.9941 +0.9914 Sterling/Dollar 1.0772 1.0690 +0.79% +0.00% +1.0776 +1.0651 Dollar/Canadian 1.3699 1.3728 -0.17% +0.00% +1.3741 +1.3698 Aussie/Dollar 0.6481 0.6459 +0.36% +0.00% +0.6486 +0.6452 NZ Dollar/Dollar 0.5678 0.5635 +0.76% +0.00% +0.5682 +0.5635 All spotsTokyo spotsEurope spots Volatilities Tokyo Forex market info from BOJ More

China’s economic output will lag behind the rest of Asia for the first time since 1990, according to new World Bank forecasts that highlight the damage wrought by President Xi Jinping’s zero-Covid policies and the meltdown of the world’s biggest property market.The World Bank has revised down its forecast for gross domestic product growth in the world’s second-largest economy to 2.8 per cent, compared with 8.1 per cent last year, and from its prediction in April of between 4 and 5 per cent for this year.At the same time, expectations for the rest of east Asia and the Pacific have improved. The region, excluding China, is expected to grow 5.3 per cent in 2022, up from 2.6 per cent last year, thanks to high commodity prices and a rebound in domestic consumption after the coronavirus pandemic. “China, which was leading the recovery from the pandemic, and largely shrugged off the Delta [Covid variant] difficulties, is now paying the economic cost of containing the disease in its most infectious manifestation,” Aaditya Mattoo, the World Bank’s chief economist for east Asia and the Pacific, told the Financial Times. China had set a GDP target of about 5.5 per cent this year, which would have been a three-decade low. But the outlook has deteriorated markedly over the past six months. Xi’s policy of relentlessly suppressing coronavirus outbreaks through snap lockdowns and mass testing has restricted mobility and sapped consumer activity just as China’s property sector — which accounts for about 30 per cent of economic activity — suffers a historic collapse.

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The Washington-based group’s latest forecast follows a series of financial institutions, including Goldman Sachs and Nomura, slashing their outlook for next year. The rise in pessimism is based on expectations that Xi will prolong his zero-Covid policy beyond 2022. Many economists and analysts had predicted Beijing would significantly increase stimulus measures in response to flagging economic growth, accelerating easing measures to boost consumption and help arrest the housing market downturn. However, Mattoo said that while China had “immense ammunition to provide powerful stimulus”, it appeared Beijing had concluded that fiscal stimulus would be “emasculated” by the zero-Covid restrictions. The data come against a backdrop of broader concerns that Xi — who is set to secure an unprecedented third term as leader of the Chinese Communist party next month — is undoing the economic dynamism that began under Deng Xiaoping’s reform era.The World Bank also worried that the property slowdown represents a deep “structural” problem. To reduce the immediate risk of contagion from the property sector “turmoil”, the bank said Beijing needs to provide more liquidity support to distressed developers and financial guarantees for project completion. In the long term, however, fiscal reforms are needed to give local governments revenue sources beyond land sales, including a property tax.By contrast, economies in east Asia and the Pacific, particularly the export-driven economies of south-east Asia, are mostly expected to grow faster and have lower inflation in 2022. In Indonesia, Thailand and Malaysia, government fuel subsidies have helped keep inflation low by global standards. Domestic consumption has risen as the region abandoned lockdowns and stricter approaches to managing the pandemic.

At the same time, higher commodity prices sparked by the global energy crisis have boosted the region’s export-reliant economies. Indonesia, a big exporter of coal, last week revealed that exports brought in a record $27.9bn in August. Some central banks, including in Indonesia, Vietnam and the Philippines, have started raising interest rates. Even so, the region was under less pressure than other parts of the world, said Mattoo. “I think the gradual tightening we’re seeing . . . can be sustained for some time.”Some of the measures such as food and fuel subsidies, however, could become a drag on growth by the end of the year, the bank warned. Price controls distort the market, often helping the wealthy and large corporations while increasing public debt, according to the report. Already there are signs of stress. Mongolia and Laos have high debt levels — large shares of which are denominated in foreign currencies — and are vulnerable to global inflation and subsequent exchange rate depreciation. “I would say that at this stage, this is something that needs to be watched, rather than a source of serious concern,” said Mattoo.

Video: Is China’s economic model broken? More

Petro, 62, has promised to seek “total peace” through deals with rebel groups and crime gangs and asked lawmakers to approve a tax reform which would raise an initial $5.6 billion for social programs next year.The reform would raise taxes on those earning more than $2,259 per month, about 10 times the minimum wage, and eliminate exemptions.Petro has constructed a majority in congress through alliances with a range of parties. Right-wing party the Democratic Center, headed by former President Alvaro Uribe, has led much of the opposition to his proposals.Some 5,000 people, many waving signs with slogans like “no to the tax reform”, marched in Bogota, according to the mayor’s office.Some marchers compared Petro’s governance so far to authoritarianism and said objections to his administration would mount.”Mr. Petro you are wrong in your way of governing,” said information technology worker James Duque.Petro has also proposed changes to healthcare, a land reform which would sell properties to poor farmers at below-market rates and reforms to voting.”It’s hurting my pension, it’s hurting my healthcare, it’s hurting private property, we need to respect families,” said protester Francisco Arias in Bogota’s central Plaza Bolivar.Peaceful marches also took place in Medellin, Cali, Armenia and Villavicencio.Petro said in a tweet he respected protesters’ right to express themselves but that his government also had a right to combat misinformation. More

The Bank of England and UK Treasury on Monday battled to calm market turmoil after the pound hit a record low against the US dollar, but sterling suffered a fresh round of heavy selling as investors fretted over the sustainability of public finances.On a day when the pound hit an early-morning low of $1.035, the BoE issued a statement saying it would “not hesitate to change interest rates” to keep inflation under control.But its announcement that it did not intend to conduct a “full assessment” of the UK government’s controversial new debt-fuelled economic policy until its next scheduled meeting in November caused new concern.The statement dashed market hopes of an emergency BoE rate rise to prop up the pound. The currency promptly dropped to under $1.07 from its high of the day of $1.0931. UK government bonds remained under heavy selling pressure. Sterling was up 0.8 per cent against the dollar in morning trading in Asia on Tuesday at $1.0773.Chancellor Kwasi Kwarteng had attempted to calm markets in a statement — co-ordinated with the BoE — in which he vowed to accelerate the development of a new strategy to bring debt under control.Kwarteng told the Financial Times on Friday he would set out a new medium-term fiscal plan “in the new year”. Instead, he will set out the new strategy to put debt on a downward path on November 23.He also tried to reassure markets by announcing an independent set of forecasts by the Office for Budget Responsibility on the same day; a new Budget would be held next spring.The statements followed intense talks between Kwarteng and BoE governor Andrew Bailey in the wake of the chancellor’s new fiscal plan, which combined £45bn of tax cuts with a massive wave of new borrowing.

The bank said it would not “hesitate to change interest rates as necessary to return inflation to the 2 per cent target sustainably in the medium term, in line with its remit”.But it added that its action would come only after “a full assessment at its next scheduled meeting of the impact on demand and inflation from the government’s announcements”. Asked whether the UK’s new fiscal plan had increased economic uncertainty and raised the odds of a global recession, Raphael Bostic, president of the Atlanta branch of the US Federal Reserve, said: “it doesn’t help”.The OBR’s economic predictions are expected to show underlying government debt on a persistently rising path as a result of Kwarteng’s move to put in place the largest tax cuts since 1972 and when the government’s cost of borrowing is rising sharply. In a bid to demonstrate fiscal responsibility, the Treasury confirmed it would stick to current government spending plans — which extend beyond 2024, when the next election is expected.Traders unwound their bets on an unscheduled shift to higher rates but stuck by their wagers on an extra-large rise at the central bank’s next meeting. Following the BoE’s announcement, markets were pricing in a 1.5 percentage point increase to 3.75 per cent in November. The bank rate is expected to reach almost 6 per cent by May.Trading in the pound on Monday was the most turbulent since the depths of the coronavirus crisis in 2020, with the currency recording a swing of more than 5 per cent between its high and low points on the day. Early in the morning, the pound lost as much as 4.7 per cent to trade as low as $1.035 against the dollar after Kwarteng vowed at the weekend to stick with his tax-cutting drive. “The UK is now in the midst of a currency crisis,” said Vasileios Gkionakis, Citigroup’s Emea head of foreign exchange strategy.UK government debt dropped further on Monday following Friday’s bruising sell-off, the worst day for the gilt market since the early 1990s.The 10-year gilt dropped sharply in price, pushing yields up by a sizeable 0.42 percentage points to 4.2 per cent, up from about 3.5 per cent before Friday’s fiscal announcement. Two-year yields, which are particularly sensitive to BoE expectations, have surged to 4.5 per cent, from 3 per cent at the end of August. “It looks like we’re headed for a spiral that we usually see in emerging markets crises, where policymakers struggle to reassert credibility,” said Mansoor Mohi-uddin, chief economist at Bank of Singapore. He highlighted that the country was still running a “gaping current account deficit”.Additional reporting by Jim Pickard in Liverpool, Stephanie Findlay and Hudson Lockett in Hong Kong, Adam Samson in New York and Leo Lewis in Tokyo More

LONDON/SINGAPORE (Reuters) – Rocketing LNG cargo prices have squeezed out dozens of smaller traders, concentrating the business in the hands of a handful of international energy majors and top global trading houses.This grip is not expected to ease until 2026 when more liquefied natural gas (LNG) starts to materialise and lower prices, adding to supply worries for poorer states reliant on it to generate power and driving up costs for big Asia economies.The global LNG market has more than doubled in size since 2011, ushering in dozens of new entrants and the expansion of smaller players in Asia. In recent years, smaller traders accounted for 20% of LNG imports in China alone.But a spike in spot LNG cargo prices to $175-$200 million, from around $15-$20 million two years ago, has had a seismic impact on physical trading activity for many smaller players.The capital needed to trade the market soared after benchmark LNG prices rose from record lows below $2 per million British thermal units (mmBtu) in 2020 to highs of $57 in August.In July, Japan’s Nippon Steel Corp, the world’s second-largest steelmaker, purchased an LNG shipment at $41/mmBtu. LNG spot prices price stood at $40.50/mmBtu then. Prices have recently eased, hitting $38/mmBtu on Monday, but analysts say they remain at levels that can be linked with an ongoing energy crisis. GRAPHIC – Northeast Asia LNG spot prices-Anual Comparison “The biggest challenge facing every market participant right now is credit,” said Ben Sutton, CEO of Six One Commodities, a U.S.-based LNG merchant that had to scale down operations after prices soared in the third quarter of 2021.Short term market volatility has heightened risk for traders, with geopolitics rather than fundamentals driving price moves.”The ballooning of LNG cargo values, along with the spike in volatility, has … put quite a strain on those players operating with smaller balance sheets,” said Tamir Druz, managing director of Capra Energy, an LNG consultancy.In Asia, a trading executive told Reuters some smaller players had left offices “dormant” in Singapore’s trading hub, while second-tier Chinese traders and some Korean firms scaled down activity due as finance became harder to secure.”LNG has gone back to be the commodity of the rich,” Pablo Galante Escobar, Global Head of LNG at energy trader Vitol, told this month’s international Gastech conference in Milan.’HIGHER AND LONGER’Conditions are now heavily skewed in favour of players with large, diversified portfolios and strong balance sheets like oil majors Shell (LON:RDSa), BP (NYSE:BP) and TotalEnergies along with major trading houses including Vitol, Trafigura, Gunvor, and Glencore (OTC:GLNCY).  BP, Shell, Trafigura and Glencore declined to comment. TotalEnergies, Vitol, and Gunvor did not immediately respond to Reuters request for comment.Shell and TotalEnergies are estimated to have a combined portfolio of 110 million tonnes of today’s 400 million tonnes (MT) LNG market, global head of business intelligence at energy and shipping consultancy Poten & Partners Jason Feer said.Both have built portfolios, with Shell buying BG and TotalEnergies taking on Engie’s LNG arm. Both are also partners in Qatar’s North Field, one of the biggest LNG projects.Adding in Qatar Energy’s portfolio of 70 million tonnes and BP’s, which is estimated at around 30 million, means that four players account for more than half of the market.While rising interest rates are adding to trading costs, these have not yet troubled big players, for whom increased price pressure represents a sweet spot, industry sources said.Shell and TotalEnergies have reported record-breaking profit, while Vitol’s record first half 2022 profit exceeded its results for the whole of 2021.Guy Broggi, an independent LNG consultant said Shell and TotalEnergies were major winners as partners and offtakers at Egyptian plants at Damietta and Idku, along with BP and Italy’s ENI (BIT:ENI), selling LNG far above the government’s target price of $5/mmbtu. As buyers of U.S. LNG via long term contracts, Shell and TotalEnergies also made massive gains from reselling low priced U.S. cargoes to higher priced European markets, he said. “We are entering unchartered territory as far as LNG markets are concerned and the aftermath of the current crisis with Russia is hard to fathom- not only for LNG. One sure thing is prices are here to stay higher and longer,” Broggi said.’DIFFICULT TO COMPETE’High LNG cargo prices are also widening energy poverty globally as some cargoes, initially destined for poorer nations, end up being diverted to European buyers.U.S. LNG shipments shift toward Europe:     “Pakistan and Bangladesh emerge as big losers as both had procurement strategies with high percentage of spot purchase and were left to face power crisis this year,” said Felix Booth, head of LNG at data analytics firm Vortexa.    In July, Pakistan LNG Limited (PLL) received no bids in a tender to import 10 cargoes of LNG.Indian oil ministry showed India paid 20% more on an annual basis for its July LNG imports, valued at $1.2 billion, while monthly import volumes slid further due to high spot prices.”Until we build more infrastructure and put more vessels in the water … it is going to be difficult to compete with the well established markets,” Charlie Riedl, executive director for trade group the Center for Liquefied Natural Gas (OTC:LNGLF) (CLNG), said. Slow project development and a possible return of China from of COVID-related curbs will keep prices elevated, Feer at Poten & Partners said.”It could get worse if China comes back into the market in a big way. China has been out of the market this year because of lower demand due to its lockdowns and slower economic growth. That has allowed volume to flow to Europe,” Feer added. More

The 2021 growth rate was below the 11% compound average annual increase seen in the last 10 years, according to an IA survey. “Whilst 2021 was a positive year, we now face a very different operating environment,” IA CEO Chris Cummings said in the report, pointing to the war in Ukraine.”Rising interest rates bring the spectre of recession and weaken the outlook for asset growth.”Sterling fell to record lows against the dollar this week as fears mounted over the government’s recently-announced fiscal plan, unleashing calls for an emergency Bank of England rate hike to restore confidence.Assets managed within funds open to a range of investors reached 4.1 trillion pounds last year, with almost two-thirds sitting in funds registered overseas, mainly in Ireland and Luxembourg. So far, the European Union has not materially restricted delegation, the mechanism which allows overseas asset managers to run funds based in the bloc, but the volume of business, which brings in export earnings to Britain, highlights what’s at stake if EU-UK relations broke down completely over issues like post-Brexit Northern Ireland.Nearly half of assets in the survey are now subject to environmental, social and governance criteria, and assets applying exclusions reached 28%, from 25% a year earlier.Graphic: https://fingfx.thomsonreuters.com/gfx/mkt/dwpkrogywvm/IA%20Graphic%203.PNGCummings described the growth of sustainable and responsible investing as a “standout trend”.($1 = 0.9260 pounds) More

South Korea’s science minister has admitted that a “sense of crisis” has gripped the country’s semiconductor industry, as the East Asian nation braces for greater challenges from the US and China in an intensifying global chip war.There is growing fear among Korean officials and industry executives that the country will shed production facilities as Korean chipmakers, lured by subsidies and tax incentives, rush to build semiconductor plants in the US. China is also catching up fast in the memory chip sector on the back of generous state funding.Lee Jong-ho, minister of science and information communications technology, and a renowned semiconductor expert, told the Financial Times that legislation passed last month had “laid the legal groundwork to support the semiconductor industry against severe competition from countries like the US, China, Japan [and in] Europe and Taiwan”.“It reflects a sense of crisis about our competitiveness on the global stage and the act is designed to strengthen our competitiveness in supply chain and security,” said Lee.“Korean companies have received relatively smaller tax benefits from the government and suffered from a lack of talent compared with China, the US and Taiwan, so we addressed the problems with the legislation.” Science minister Lee Jong-ho said that legislation passed last month ‘had laid the legal groundwork to support the semiconductor industry’ © BJ Warnick/Newscom/Alamy Washington is using $52bn in grants outlined in the Chips and Science Act to lure the world’s chipmakers to expand their manufacturing in the US. But the legislation also includes “guardrails” that prohibit recipients of US federal funding from expanding or upgrading their advanced chip capacity in China for 10 years.Last week, South Korea’s trade minister Ahn Duk-geun told the FT that “our semiconductor industry has a lot of concerns about what the US government is doing these days”. He acknowledged disagreements between Seoul and Washington over US restrictions on the transfer of cutting-edge manufacturing capabilities to semiconductor facilities in China.South Korea remains the world’s biggest memory chip producer, with Samsung and SK Hynix together controlling about 70 per cent of the global Dram market and more than half of the Nand flash market. Dram chips enable short-term storage for graphic, mobile and server chips, while Nand chips allow for files and data to be stored without power.But the Korean chipmakers’ technological edge over US rival Micron in the Dram business appears to be narrowing, while Chinese chipmakers such as YMTC are expanding their market share in the Nand flash market. Apple said this month that it was “evaluating sourcing from YMTC for Nand chips to be used in some iPhones sold in China”.“The sense of crisis and anxiety over our industry’s competitiveness is greater than ever,” said Kim Yang-paeng, senior researcher at the Korea Institute for Industrial Economics and Trade. “There is a concern that the country’s role in the global supply chain could be threatened as Korean chipmakers flock to the US.”James Lim, an analyst at US hedge fund Dalton Investments, said: “The volume that YMTC supplies to Apple will be small but it shows that China is catching up fast in terms of technology and could be a threat to South Korean chipmakers.” Industry officials want the South Korean government to provide more support for domestic chipmakers as the US, China and Europe boost investment in the sector.

President Yoon Suk-yeol, who said semiconductors “determine the fate of the South Korean economy”, has promised greater backing for the industry. But two important bills aimed at bolstering it, known as the K-chips acts, are still pending in parliament.The Yoon administration, which assumed office in May, has expanded tax breaks and reduced red tape. It also intends to provide funding for essential infrastructure such as electricity and water supply for chip production facilities. It wants to develop large “chip clusters”, too, which will gather together production and research and development, as well as attract foreign chipmakers to Korea. “The domestic chip market is not big, so companies need to set their sights on the global market to generate profits,” said Lee.Addressing the “lack of talent” referred to by Lee, the government plans to train 150,000 people over 10 years to boost the semiconductor workforce.But the chip clusters have been held up by environmental issues and problems securing permits. They are also unlikely to satisfy US officials, who worry that too many of the world’s chips are already produced in geopolitical hotspots across East Asia.Analysts also noted that much of the R&D being conducted by Korean companies on next-generation semiconductor technologies was taking place in the US.“The South Korean semiconductor industry is worried that they could be overtaken by promising new competitors, just as they overtook others in the past,” said Burm Jin-wook, professor of electronic engineering at Sogang University in Seoul. More