International News 03 June 2025
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South Korea's Exports in May 2025 Fall
South Korea has experienced a decline in exports for the first time in four months, with reduced shipments to the US and China being the main contributing factors. This decline was attributed to the global trade conflict instigated by Donald Trump's tariff policies, leading to a 1.3% decrease in South Korean exports in May compared to the same period last year. Despite previous increases in exports driven by strong chip sales, the impact of the US tariff policy on the global economy is becoming evident. Minister Ahn Duk-geun emphasised the impact of US tariff policy on global exports. However, the decline experienced in May was less severe than that which economists had projected, with exports only falling by 1.0% when adjusted for working days.
https://internasional.kontan.co.id/news/ekspor-korea-selatan-di-mei-2025-turun
Japan to Raise Foreign Direct Investment Target to US$1 Trillion by 2030
Japan is set to increase its foreign direct investment target for 2030 by 20 per cent to 150 trillion yen, with the aim of boosting the economy by attracting foreign investments in key growth sectors such as decarbonisation. This target is almost three times the current investment level of around 50 trillion yen, signalling Japan's commitment to revitalising its economy. The new target, to be included in the government's upcoming fiscal and economic policy guidelines, is a significant increase from the previous target of 100 trillion yen by 2030. Plans also include revising the 2030 target to 120 trillion yen, as the groundwork for efforts to reach 150 trillion yen by 2035. The increased foreign direct investment strategy aims to stimulate regional economies, create jobs outside major urban centres, and may involve new grants and public-private collaboration to support foreign facility establishment in local areas.
Factory Activity in Asia to Shrink in May 2025, Hit by US Tariffs
Factory activity in Asia decreased in May 2025 due to low demand in China and the impact of US tariffs. A recent private survey revealed a bleak outlook for the region, particularly in Japan and South Korea, where manufacturing continued to contract amidst concerns about US auto tariffs. It is also worth noting that China has experienced a decline in manufacturing activity for the second consecutive month, which may be indicative of economic weakness. Analysts predict that ongoing trade uncertainties with the US may deter companies from expanding production or spending. The situation is being exacerbated by China's increased exportation of cheap goods to Asia, leading to deflationary pressure in the region. The absence of progress in trade negotiations is hindering the potential recovery of Asian manufacturing activity, as evidenced by Bank au Jibun Japan's Manufacturing Purchasing Managers' Index (PMI) update.