SOUTH KOREA
CHANGING OF THE GUARD CEREMONY AT GYEONGBOKGUNG PALACE, SEOUL, KOREA
SPECIAL ADVERTISING SECTION
A report by Camilla Sutton
SOUTH KOREA didn’t escape the global financial crisis but through forward thinking fiscal policy, recovery has been fast and effective. The best law
firms in Seoul are optimistic about the future.
ECONOMY
The Korean financial services industry faltered in the first
6 months after Lehman’s collapse in September 2008.
Industry was also affected. But the slump was short
lived. Production, exports, stock prices all started to
recover by mid 2009. Overall Korea’s GDP grew 4%
over the last year, second only in the region to China’s
growth rate of approximately 7%.
‘Initially the biggest shock was to the Korean Won
(1600+ KRW/USD), but the Won has almost fully recovered as of January 2010 (1130 KRW/USD),’ comments
Chang Rok Woo, managing partner of Yulchon. Korean
stimulus was funded from surpluses from 2000-2008,
which had averaged 3% of GDP. ‘Large firms generally
had stronger balance sheets and used the crisis as an
opportunity to increase outbound investment whilst
small firms in select industries with exposure to currency exchange fluctuations felt the brunt of the impact,’
adds Chang Rok Woo.
Last year showed that even with a resilient economy
and substantial foreign exchange reserves, the Won was
still vulnerable. In response the Korean government
entered into currency swap arrangements with the US
and Japan to further stabilize the exchange rates.
‘In the real economy, Korean exporters were benefited by the stronger Korean Won against foreign curren-cies and the more-competitive manufacturing products,
whereas the construction, shipping and airline industries
experienced difficult times mainly because of decreased
demand,’ comments a partner at Kim & Chang. ‘The
operation rate of shipbuilders was high because of the
orders previously made but there were fewer new orders
in 2009. Furthermore, some large corporations who previously expanded their businesses by large-scale M&As
with loans or by launching new businesses had very
difficult times going through restructuring after the
financial crisis.’
TRENDS
The legal sector followed the same pattern – business
slowed in late 2008 and early 2009 but started to recov-
er in mid 2009. ‘Since the third quarter, the major prac-
tice areas—M&A activity, capital markets, financial serv-
