Tag Archives: Korea

U.S. chip subsidy effort faces pushback over China issues

By Stephen Nellis, David Shepardson and Michael Martina

WASHINGTON (Reuters) – A series of amendments for a $190 billion U.S. Senate bill aimed at countering China’s technology challenge are in limbo after business groups protested proposals intended to ensure that none of the money finds its way to China or other U.S. rivals.

New regulations or reviews of investments or deals in China could disrupt U.S. businesses’ future operations in that country, which include semiconductors and medical equipment. The bilateral trade deficit has run more than $100 billion a year since 2002.

Senators from both sides of the aisle want “guardrails,” such as mandatory security disclosures and interagency reviews to stop U.S. businesses from compromising national security by outsourcing critical technologies to China.

The Senate bill authorizes $120 billion for high-tech research and another $54 billion to subsidize U.S. semiconductor production. For chip factories, it makes no distinction between foreign recipients and U.S.-based firms in determining who gets funds for U.S. facilities.

A key goal of the funding is to bring the world’s most advanced chip plants to the United States, and only Taiwan Semiconductor Manufacturing Co and Korea’s Samsung Electronics Co Ltd have the technology to do that.

Florida Republican Senator Marco Rubio has proposed an amendment requiring U.S. national security officials to screen recipients and require disclosure of funding or support from foreign entities, including the Chinese government or Chinese state-owned enterprises.

TSMC and Samsung both have operations in China.

Another amendment from Democratic Senator Bob Casey and Republican Senator John Cornyn would require an interagency review of any U.S. investments in China or a shortlist of adversarial countries. That would mark a huge change for U.S. law, which for decades has had provisions for screening inbound investments, but not for outbound.

“If a company wants to offshore semiconductors to China, we need to know about it,” Casey said from the Senate floor on Wednesday. “Yet, business interests, like the U.S. Chamber of Commerce and the U.S.-China Business Council, are organizing against this commonsense proposal.”

Casey took to task Republicans opposing the measure, saying they talk tough on China, but they “cut and run” when it comes to taking on big business.

John Murphy, the U.S. Chamber’s senior vice president for international policy, said existing laws, such as the Export Control Reform Act of 2018 (ECRA), could address the China investment issue, and that the proposal needed more discussion in the Senate before being added to such a sweeping package.

“Congress and the administration should focus on using the legal tools on which the paint is barely dry,” he said, referring to ECRA.

One Senate aide cited fierce opposition to the Casey-Cornyn amendment from businesses and some Republicans, including Senator Mike Crapo, the ranking member on the Senate Finance Committee, adding: “We’re not confident that it’s going to come to a vote.”

Crapo declined to comment.

FUNDAMENTAL FLAW?

Senate Majority Leader Chuck Schumer has sought to get the U.S. Innovation and Competition Act passed this week, but Republicans insist the bill is not ready.

“There is an increasing consensus that the lack of guardrails is the fundamental flaw of the bill,” a Republican House aide said of the Senate package.

The House of Representatives is planning its own version of a China bill and could add other provisions on chips funding as well.

Rubio’s office said it was still working on getting his amendment incorporated. When he proposed his amendment for counterintelligence screening last week, he noted the much needed investments would “mean nothing if they are stolen by foreign adversaries, including the Chinese Communist Party.”

Any restrictions on subsidies to foreign companies would likely benefit Intel Corp, the long-time U.S. national champion in chip-making that has promised to redouble its efforts in the most advanced technologies and spend more than $20 billion on new U.S. plants.

Intel last year moved to sell off its only chip factory in China to SK Hynix.

Derek Scissors, of the conservative American Enterprise Institute, who studies China and security issues, said companies should be forced to make a choice.

“If you receive federal government money, you cannot expand your business in China from that point. The end. And if you don’t like that, don’t take the federal money,” Scissors said.

(Reporting by Stephen Nellis, Michael Martina and David Shepardson; Editing by Richard Chang)

Some Samsung, Hyundai workers self-quarantine as Korea Inc braces for virus impact

Some Samsung, Hyundai workers self-quarantine as Korea Inc braces for virus impact
By Hyunjoo Jin and Joyce Lee

SEOUL (Reuters) – Some South Korean workers at Samsung Electronics <005930.KS> and Hyundai Motor <005380.KS> are staying home as a precautionary measure as corporate Korea scrambles to prevent the coronavirus outbreak from causing widespread disruption in its home market.

The country’s third-largest conglomerate SK Group, which controls memory chip maker SK Hynix <000660.KS> and mobile carrier SK Telecom, advised its employees to work remotely starting from Tuesday due to the coronavirus outbreak.

About 1,500 workers of Samsung Electronics’ phone complex in the southeastern city of Gumi have self-quarantined after one of its workers was infected with the disease, a person familiar with the matter said. They include 900 workers who commute to Gumi from neighboring Daegu city, the person said.

The southeastern city of Daegu – the epicenter of the virus outbreak in South Korea- and nearby cities are an industrial hub in South Korea, Asia’s fourth-biggest economy, and home to factories of Samsung Electronics, Hyundai Motor and a number of others.

South Korea on Monday reported 161 new cases of the coronavirus, bringing the total number of infected patients in the country to 763, a day after the government raised its infectious disease alert to its highest level.

Samsung Electronics shares fell 4.1% and Hyundai Motor ended down 4.3%, tracking the wider market’s <.KS11> 3.9% fall, as the spike in new coronavirus cases intensified fears about the epidemic’s fallout on the economy and businesses.

Samsung said it has restarted production at its phone factory complex in Gumi on Monday, after closing it over the weekend, adding that the floor where the infected employee worked will resume production on Tuesday.

“As of 1 p.m. KT (0400 GMT) Feb. 24, the Gumi Complex has started normal operations and we expect no impact on production,” Samsung said in a statement, without elaborating further.

Samsung’s Gumi factory accounts for a small portion of its total phone production, but it produces premium phones and foldable phones, research firm Counterpoint said.

Six employees at Hyundai Motor’s factories in the southeastern city of Ulsan are also at home, with four of them linked to a church at the center of the virus outbreak, a union spokesman said in a statement.

“We are walking on ice,” one Hyundai factory worker told Reuters.

A factory run by Hyundai supplier Seojin Industrial was closed over the weekend after the death of a virus-infected worker, an official at the supplier said. He said that authorities disinfected the factory, located in the city of Gyeongju, and it is unclear when production will resume.

Seojin declined to comment when contacted by Reuters.

Any disruption would be a fresh blow to Hyundai, which has restarted most of its domestic factories’ production after being hit by suspensions due to parts shortages from China.

Ulsan is home to Hyundai’s biggest car factories, and there are a number of suppliers in the city and surrounding areas, which cater not only to the automaker, but export to the United States, Japan and other markets.

A Hyundai Motor spokesman said there has been no production disruption so far as the automaker has inventory.

With virus fears spreading nationwide, Hyundai set up thermal cameras at all of its operations across the nation, including its headquarters in Seoul, to check temperatures.

(Reporting by Hyunjoo Jin and Joyce Lee; Additional reporting by Heekyong Yang; Editing by Raju Gopalakrishnan and Muralikumar Anantharaman and Kirsten Donovanh)

Korean leaders aim for end of war, ‘complete denuclearization’ after historic summit

By Christine Kim and Josh Smith

SEOUL (Reuters) – The leaders of North and South Korea embraced on Friday after pledging to work for the “complete denuclearization of the Korean peninsula”, on a day of smiles and handshakes at the first inter-Korean summit in more than a decade.

The two Koreas announced they would work with the United States and China this year to declare an official end to the 1950s Korean War and seek an agreement on “permanent” and “solid” peace.

The declaration included promises to pursue phased arms reduction, cease hostile acts, transform their fortified border into a peace zone and seek multilateral talks with other countries including the United States.

“The two leaders declare before our people of 80 million and the entire world there will be no more war on the Korean peninsula and a new age of peace has begun,” the two sides.

South Korean President Moon Jae-in agreed to visit the North Korean capital of Pyongyang this year, they said.

Earlier, North Korea’s Kim Jong Un became the first North Korean leader since the 1950-53 Korean War to set foot in South Korea after shaking hands with his counterpart over a concrete curb marking the border in the heavily fortified demilitarized zone.

Scenes of Moon and Kim joking and walking together marked a striking contrast to last year’s barrage of North Korean missile tests and its largest ever nuclear test that led to sweeping international sanctions and fears of war.

Their meeting comes weeks before Kim is due to meet U.S. President Donald Trump in what would be the first ever meeting between sitting leaders of the two countries.

Trump welcomed the Korean talks.

“After a furious year of missile launches and Nuclear testing, a historic meeting between North and South Korea is now taking place. Good things are happening, but only time will tell!” he said on Twitter.

He later added: “KOREAN WAR TO END! The United States, and all of its GREAT people, should be very proud of what is now taking place in Korea!”

China, North Korea’s main ally, welcomed the leaders’ statement and said it was willing to keep playing a proactive role in promoting political solutions. China is wary of being sidelined by a thaw between the two Koreas and by the upcoming summit between Trump and Kim.

Russia said it was ready to facilitate cooperation between North and South Korea, including in the fields of railway transport and energy.

Japanese Prime Minister Shinzo Abe also welcomed the summit and said he expected North Korea to take concrete steps to carry out its promises.

Global markets were lifted by hopes the summit would pave the way for the end of conflict on the Korean peninsula. Shares in Seoul briefly rose more than 1 percent to a one-month high and Japan’s Nikkei share average also gained.

‘BALL IN U.S. COURT’

As part of efforts to reduce tension, the two sides agreed to open a liaison office, stop propaganda broadcasts and leaflet drops along the border and allow Korean families divided by the border to meet.

Days before the summit, Kim said North Korea would suspend nuclear and long-range missile tests and dismantle its only known nuclear test site.

But there has been widespread scepticism about whether Kim is ready to abandon the nuclear arsenal his country has developed for decades, justifying it as a necessary deterrent against U.S. invasion.

“Everything will not be resolved in the blink of an eye,” said Kim Young-hee, a North Korean defector-turned-economist at the Korea Development Bank.

“Kim Jong Un has put the ball in the U.S. court. He declared denuclearization, and promised to halt nuclear tests,” she said. “That tells us he wants the United States to guarantee the safety of his regime … in return for denuclearization.”

It is not the first time leaders of North and South Korea have declared hopes for peace. Two earlier summits, in Pyongyang in 2000 and 2007, failed to halt the North’s weapons program or improve relations in a lasting way.

“We will make efforts to create good results by communicating closely, in order to make sure our agreement signed today before the entire world, will not end as just a beginning like previous agreements before today,” Kim said after the agreement was signed.

FIRST ACROSS THE LINE

Earlier, Moon greeted Kim at the military demarcation line where the men smiled and shook hands.

In an unplanned move, Kim invited Moon to step briefly across into North Korea, before the two leaders crossed back into South Korea holding hands.

“I was excited to meet at this historic place and it is really moving that you came all the way to the demarcation line to greet me in person,” Kim said, wearing his customary black Mao suit.

“A new history starts now. An age of peace, from the starting point of history,” Kim wrote in Korean in a guest book in the South’s Peace House before talks began.

During a private meeting in the morning, Kim told Moon he came to the summit to end the history of conflict and joked he was sorry for waking Moon up with his early morning missile tests, a senior presidential official said.

Moon and Kim released their joint declaration before a dinner banquet.

Later, with their wives, they watched a music performance and held hands as they watched a montage of photos from their summit set to a K-pop song that included the words “be a family again”.

After warm farewells, Kim was driven back to North Korea.

The United States said earlier it was hopeful talks on peace and prosperity would make progress and it looked forward to discussions with South Korea in preparation for the planned meeting of Trump and Kim in coming weeks.

Just months ago, Trump and Kim were trading threats and insults as the North made rapid advances in pursuit of nuclear-armed missiles capable of hitting the United States.

The United States stations 28,500 troops in South Korea as a legacy of the Korean War, which ended in a truce, not a peace treaty. The war pitted the South, U.N. and U.S. forces against the communist North, backed by China and Russia.

Kim and Trump are expected to meet in late May or June. Trump said on Thursday he was considering several dates and venues.

(Reporting by the Inter-Korean Summit Press Corps, Christine Kim and Josh Smith; Additional reporting by Hyonhee Shin in SEOUL and David Brunnstrom and Susan Heavey and Eric Beech in WASHINGTON; Editing by Lincoln Feast, Robert Birsel)

China’s military practices for ‘surprise attack’ over sea near Korea

BEIJING (Reuters) – China’s air force has carried out exercises near the Korean peninsula, practicing to defend against a “surprise attack” coming over the sea, Chinese state media reported.

An anti-aircraft defense battalion carried out the exercises early on Tuesday, near the Bohai Sea, the innermost gulf of the Yellow Sea that separates China from the peninsula, an official military website www.81.cn reported.

Troops traveled to the site from central China before immediately beginning drills to fend off the “surprise attack” simulating real battle, it said.

“The troops rapid response capabilities and actual combat levels have effectively been tested,” it said.

It was the first time certain weapons, which it did not identify, had been used to shoot down low-altitude targets coming over the sea, www.81.cn said, without elaborating.

China’s Defence Ministry did not immediately respond to a faxed request for comment.

The exercise came days after North Korea carried out its sixth and largest nuclear test of an advanced hydrogen bomb and there is mounting concern internationally that the country plans more weapons tests, possibly of a long-range missile.

After weeks of rising tension, South Korea and the United States have been discussing the deployment of aircraft carriers and strategic bombers to the Korean peninsula.

China is deeply suspicious of any U.S. backed military build up in the region and has repeatedly expressed anger at the deployment of a U.S. anti-missile defense system in South Korea.

(Reporting by Christian Shepherd)

U.S. Navy strike group to move toward Korean peninsula

FILE PHOTO - Sailors man the rails of the USS Carl Vinson, a Nimitz-class aircraft carrier, as it departs its home port in San Diego, California August 22, 2014.

By Idrees Ali

WASHINGTON (Reuters) – A U.S. Navy strike group will be moving toward the western Pacific Ocean near the Korean peninsula as a show of force, a U.S. official told Reuters on Saturday, as concerns grow about North Korea’s advancing weapons program.

Earlier this month North Korea tested a liquid-fueled Scud missile which only traveled a fraction of its range.

The strike group, called Carl Vinson, includes an aircraft carrier and will make its way from Singapore toward the Korean peninsula, according to the official, who was not authorized to speak to the media and requested anonymity.

“We feel the increased presence is necessary,” the official said, citing North Korea’s worrisome behavior.

The news was first reported by Reuters.

In a statement late Saturday, the U.S. Navy’s Third Fleet said the strike group had been directed to sail north, but it did not specify the destination. The military vessels will operate in the Western Pacific rather than making previously planned port visits to Australia, it added.

This year North Korean officials, including leader Kim Jong Un, have repeatedly indicated an intercontinental ballistic missile test or something similar could be coming, possibly as soon as April 15, the 105th birthday of North Korea’s founding president and celebrated annually as “the Day of the Sun.”

Earlier this week U.S. President Donald Trump and Chinese President Xi Jinping met in Florida, where Trump pressed his counterpart to do more to curb North Korea’s nuclear program.

Trump’s national security aides have completed a review of U.S. options to try to curb North Korea’s nuclear and missile programs. These include economic and military measures but lean more toward sanctions and increased pressure on Beijing to rein in its reclusive neighbor.

Although the option of pre-emptive military strikes on North Korea is not off the table, the review prioritizes less-risky steps and de-emphasizes direct military action.

Trump spoke with South Korea’s acting President Hwang Kyo-ahn on Friday, the White House said on Saturday in a statement which did not mention the strike group.

(Reporting by Idrees Ali; Editing by Richard Chang)

Military Accidentally Ships Live Anthrax To Labs

The Centers for Disease Control scrambled Wednesday to find where the military accidentally shipped live anthrax virus.

As many as 18 labs around the country have been sent shipments of live anthrax when they should have received inactive or dead virus for research purposes.

And in Korea, officials say that 22 Air Force personnel may have been exposed to anthrax and are now undergoing treatment as a precaution.

Jason McDonald of the Centers for Disease Control said that most of the labs are private but a few are operated by government and public institutions.  The shipments were sent from the Army’s Dugway Proving Ground in Utah to California, Delaware, Maryland, New Jersey, New York, Tennessee, Texas, Virginia and Washington.

One of the samples arrived at Osan Air Base in Korea leading to the possible infections of military personnel.

“There is absolutely no excuse. Not for the shipping institution. Not for receiving institutions that failed to confirm inactivation upon receipt,” Richard Ebright, a biosafety expert at Rutgers in New Jersey said. “Both should lose, irrevocably, authorization for work with active or inactivated select agents.”

The incorrect shipment was discovered by a laboratory in Maryland.