Reports say Korea at risk of Taiwan-style polarization amid AI boom

Korea is increasingly headed toward Taiwan’s polarized economic path amid the artificial intelligence (AI) boom, where only a handful of AI-related exporters make profits while domestic demand remains largely stagnant, according to brokerage reports Monday. Two reports, both released by DB Securities analysts, noted that this polarization is exacerbated by the weakening of the Korean won against the U.S. dollar, similar to development’s with Taiwan’s currency, the New Taiwan dollar. The reports explained that the Korean currency’s depreciation is prompting exporters to keep their earnings in U.S. dollars for overseas investments rather than converting them into won, to avoid losses from the weak local currency. These practices further diminish domestic investment, household income, consumer spending and other economic activities at home. “The Korean economy is beginning to resemble Taiwan’s, and that is by no means a compliment,” wrote Moon Hong-cheol, a senior analyst at DB Securities, in a report titled “Taiwan, the Future of Korea under Currency Depreciation.” While MWeiter zum vollständigen Artikel bei Korea Times Weiter zum vollständigen Artikel bei Korea Times