Chu Kyung-ho's 181 trillion won export fund 'spreading out' Chinese tourism for 3 months 'stimulating' real estate luxury consumption
In the midst of an economic downturn with simultaneous sharp declines in imports and exports, the government began to stimulate the economy by investing 181 trillion won in export subsidies in the fourth quarter and attracting Chinese tourists, thereby boosting the real estate market and the luxury luxury market.
On the 4th, when the sluggish exports in August were revealed, the Ministry of Strategy and Finance announced a policy to increase exports in the fourth quarter by providing cheap loans with policy financing of up to 181 trillion won ($137 billion) to exporters by the end of the year and exempting visa processing fees for Chinese tourists, which currently allows 10,000 tourists. Announced an economic stimulus policy to increase the number of people to 50,000 per month.
As the government intensively distributed large-scale policy funds of 181 trillion won in the first three months of the fourth quarter, the stimulation of luxury consumption was strengthened by the real estate economy stimulus and the rapid increase in luxury goods.
Deputy Prime Minister Chu Kyung-ho said at the 'Emergency Economic Ministers' Meeting and Export Investment Measures Meeting' on this day, "The decline in exports is expected to ease further in September along with the trade balance trend. Exports are expected to turn positive during the fourth quarter." ‘Additional support plan to revitalize exports’ and ‘Plan to revitalize Chinese tourism to Korea’ were announced.
Regarding the 'China risk' that has resulted in a sharp decline in trade, Deputy Prime Minister Chu said, "As external uncertainties such as the Chinese economic situation continue, we will not let go of tension even for a moment while guarding against excessive pessimism or optimism about the economic trend." He added, "We will strengthen the momentum for export recovery." “We will focus all government policy capabilities and provide all-out support to promote domestic demand by activating foreign domestic tourism,” he said, confirming a shift in policy to attract tourists if China’s export market continues to decline.
On the 3rd, the Hyundai Research Institute published a report titled ‘Subsequence and Potential Enhancement’, saying that the 0.6% economic growth rate in the second quarter (compared to the previous quarter) was “actually negative growth due to an illusion caused by a decrease in imports,” and that “we have entered a typical ‘recession’ phase with simultaneous recession in domestic demand and exports.” “It was revealed.
The indicators for the second quarter are already negative, with imports (-4.2%) plummeting, private consumption (-0.1%), construction investment (-0.3%), facility investment (-0.2%), and exports (-1.8%) all negative, and imports -4.2%. The % decline was large, and the government changed it into ‘export recovery.’
Deputy Prime Minister Chu said at the 'Emergency Economic Ministers' Meeting' on this day, "Industrial activity was sluggish in July due to temporary factors such as bad weather, but recovery in exports and improvement in the service industry are continuing." He added, "Our economy has monthly volatility, but has generally bottomed out." "It appears that we are in the early stages of recovery," he said. Deputy Prime Minister Chu continued, "Despite the impact of the summer vacation in August, exports, which are a key element of the economic rebound in the second half of the year, have significantly eased the decline in exports, centering on semiconductors, and exports to China have significantly eased." “Exports also exceeded $10 billion again,” he said, adding, “The trade balance also continued to be in surplus for three consecutive months, showing a better trend than initially expected.”
Due to the government's stimulus plan, the stock market on September 3 rose 6.1%, with only Samsung Electronics, which was net purchased by foreigners, and large-cap stocks such as LG Energy Solution and SK Hynix were net sold by foreigners, resulting in stocks whose stock prices decreased (553) more than those whose stock prices rose (316). led the way
Foreign investors disrupted the Korean stock market by selling SK Hynix and buying Samsung in response to Samsung’s ‘high bandwidth memory (HBM) supply promotion’ supported by the government and media.
Media outlets focused on reporting, “According to the semiconductor industry, Samsung Electronics recently passed Nvidia’s sample test and is preparing to supply HBM3.” Kim Dong-won, head of research at KB Securities, said, “It is believed that Samsung Electronics has recently completed final quality approval for AI semiconductors and packaging simultaneously from North American GPU companies.” He added, “We expect to expand our share in the HBM market, where supply shortages are expected for the next two years.” As revealed by Go Money Today, ‘estimates’ and ‘expectations’ are the conclusions of the report.
Securities companies raised their average target stock price for Samsung Electronics by 6% to 91,364 won from the previous day (86,182 won).
KB Securities, Hana Securities, Kyobo Securities, Hi Investment & Securities, and Sangsang Certificates presented a target stock price of 95,000 won, while Korea Investment & Securities, DB Financial Investment, Hanwha Investment & Securities, and Meritz Securities presented a target stock price of 94,000 won.
These securities companies presented ‘Samsung bottom’ and ‘V rebound’ last May, and Deputy Prime Minister Chu also announced at the National Assembly that the trade surplus in the second half of the year would be revitalized from the ‘May bottom’.
In related reports, media outlets collectively change the description of semiconductor analysis articles from ‘stock company report officials’ to ‘industry officials.’
The low point in May was continuously propagated through the media as securities firms issued reports recommending the purchase of Samsung Electronics stocks in May, and Deputy Prime Minister Chu said at the National Assembly on May 21, "After May, the deficit will improve and the fourth quarter will increase." “We will be able to see external performance that is completely different from what it is now,” he said, adding that it was formalized as a stock market and economic stimulus policy.
The ‘Samsung Electronics’ operating profit forecast for the second quarter’ released in May had already shown a ‘99% plunge compared to the previous year’, and the ‘May low point’ was converted into government policy.
The government announced 'austerity fiscal policy' on the 29th of last month, with a budget of 656.9 trillion won next year, an increase in spending of 2.8% (18.2 trillion won) compared to this year's 638.7 trillion won, lower than the inflation rate forecast (mid-3% range). .
In response to a question from the opposition party at the National Assembly on the 4th asking, ‘Shouldn’t we raise the economic growth rate through supplementary budget?’, Deputy Prime Minister Chu said, “If we take on more debt, how can we maintain sound finances and external credibility?” and “A sound finance policy rather than cash distribution.” He said, “We need to focus on selective financial expenditures for the weak while making sure we do so.”
<Securities companies Samsung 'Buy stocks at May low' Vs 2nd quarter profit plummets 99% compared to previous year, June 2, 2023. Samsung's worst performance suddenly changes from 'May low' to 'bottom in 2nd quarter', foreign media adds 3rd quarter ‘Fall’, July 7. Chu Kyung-ho’s ‘May low’ fails, trade deficit grows, IMF 1.4%, ADB 1.3% growth rate declines, see July 26th issue>