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More Strikes for Hyundai Motor in South Korea - 2004-07-05


Thousands of workers went on strike in South Korea, while China cracked down on corporate corruption.

About 40,000 unionized workers at South Korea's top automaker, Hyundai Motor, went on a two-day strike last week to demand a wage increase of more than 10 percent and better working conditions.

Foreign investors say labor unrest is a big deterrent to doing business in South Korea. Jiwon Lim, an economist with investment bank J.P. Morgan, says strikes are common in South Korea, occurring almost every spring and summer.

Ms. Lim warns, however, that the tendency of companies to give in to union demands could hurt the country's economy in the long run. "If the labor strike and negotiation outcome is labor-friendly?, the competitiveness of Korea will be eroded."

Other companies in South Korea, including automaker Kia and top lender Koram Bank, also saw their workers strike last week.

South Korea's current account surplus hit a six-year high of almost $4 billion in May, up from just over $1 billion in April.

The growth came from exports of semiconductors and telecommunication devices. The current account measures trade in goods and services.

The fall-out is continuing in one of China's largest-ever corporate failures. A court sentenced the former general manager of bankrupt Guangdong International Trust and Investment, or GITIC, to 14 years in prison. Huang Yantian was found guilty of fraud and illegal investments that contributed to the trust's collapse.

GITIC's demise in the late 1990s was the first of many breakdowns in China's investment industry. Its collapse prompted reforms in corporate governance and risk management, but fraud and corruption in Chinese corporations are still frequently reported.

Southwest China's Sichuan Province will spend nearly $9 billion by 2005 to build new power generating plants in response to soaring demand for electricity.

The number of visitors to Singapore soared almost fourfold in May from the same month last year to nearly 700,000. It is a signal that the city-state's tourism sector has recovered from the outbreak of Severe Acute Respiratory Syndrome last year, which devastated tourism in Asia. Tourism accounts for about six percent of Singapore's $93 billion gross domestic product.

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