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South Korea Considering Economic Stimulus Measures - 2003-05-05


South Korea is reportedly planning measures to put some spark into its slowing economy. Officials say there is strong support within the government and the country's central bank for a stimulus package, which includes a more robust monetary policy.

South Korea's Economic Daily reports proposals include lowering the country's main interest rate by a quarter of a percentage point and increasing government spending by about $4 billion. South Korea's economy has been hit by market declines in China, its biggest export market. The nuclear dispute with North Korea is also impacting the financial sector.

South Korean Economic Minister Kim Jin-pyo says South Korea may have difficulty meeting the five percent growth rate forecast by the government.

New research indicates the Asia-Pacific semiconductor market grew 26.2 percent last year to more than $55 billion. Research group, Gartner Dataquest, says the Iraq war temporarily dampened business spending on information technology, but now that it is over, a recovery in the personal computer and mobile handset market may be underway.

The world's largest contract chipmaker is echoing that prediction, saying signs point to a second-quarter pickup in demand. Taiwan Semiconductor Manufacturing Company says first quarter net profit fell 34 percent from last year, but that the situation is again on the upswing since March. Taiwan Semiconductor says its financial outlook is also being aided by lower operating expenses, reduced investment losses, and tax credits.

Singapore is planning to sign a ground-breaking Free Trade Agreement on Tuesday with the United States. It is the first time the United States has made such an agreement with an Asian nation. The pact is expected to save Singapore about $110 million a year in tariffs and will benefit U.S. companies as well.

Nicholas De Boursac, Executive Director of the American Chamber of Commerce in Singapore, says "it will mean better market access particularly in the service sector. It will also mean improved IPR protection."

Mr. De Boursac says IPR, or Intellectual Property Rights, is a major issue for many U.S. companies doing business in Asia.

Financial news services like Reuters, Dow Jones, and Bloomberg will soon face competition from a new player. North America's Marketwatch.com, Europe's AFX News, and China's Xinhua Financial Network are joining forces in a new venture, to be called World Business News Alliance. It plans to employ 5,000 journalists to produce about 10,000 news items per day. The company also plans to offer computer terminals to deliver real-time financial data.

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