The G20 Seoul Summit Was Anti-Climatic in Many Ways....
Before the G20 Seoul Summit, there was great preparation, great anxiety, and not-so-great anticipation of a final agreement to ratify the KORUS (Korea-U.S.) Free Trade Agreement. At best, the G20 delivered on one out of the three. Perhaps the only certain outcome? Continuing inflation in South Korea to the detriment of Korean citizens.
War of Words Among the Largest
In a strange twist, Ben Bernanke was the target of most of the verbal attacks by foreign leaders around the world. As a result of QE2 (Quantitative Easing 2), which is a program where the US Federal Reserve Bank will purchase between USD $500-750 Billion in U.S. government bonds, foreign central bankers roundly criticized "Helicopter Ben." Of course, this is somewhat ironic, given that governments around the world have also propped up their domestic economies in various ways. The EU, Japan, China, and yes, South Korea have embarked on massive government spending programs in order to prevent deflation and the resulting loss of consumer confidence. That, in turn, would start a spiral in which consumers don't spend, which creates another round of economic duress. In South Korea, the Bak administration has spent a great amount of money in buying vacant apartments outside of Seoul (신도시) to avoid further losses by Korean construction companies. In Europe, the ECB has purchased government bonds of Greece and now, Ireland is next in line to received direct financial aid. Countries are trying to preserve their domestic economies but the result is artificial currency depreciation. For global leaders to point at Helicopter Ben is irony at its height.
No KORUS FTA = Increasing Inflation for Koreans
The bottom line is that both the U.S. and Korean governments are being foolish by not reaching final agreement on the Korea-U.S. (KORUS) Free Trade Agreement. Beef and autos continue to the main points of contention. However, the fact that many other common goods would be imported into Korea at much lower prices would have created downward pressure on inflation. That is very important to the average working Korean, where food inflation is rampant to the point where even cabbage used in making kimchi has become unaffordable to many. Now, The Lost Seoul isn't stating that final ratification of the KORUS FTA would result in instaneous downward pressure on all prices, but the fact is that greater competition due to lower tariffs on many goods can do nothing other than help mitigate the increasing pressure on the cost of living in Korea. So while special interest groups are delaying ratification of the KORUS FTA, the victims are Korean citizens who are struggling to make ends meet. The Bak administration would do well to attempt to break the impasse, or pressure will increase on the Bank of Korea to increase interest rates to strengthen the Won. Doing so would jeopardize the competitiveness of Korean products on the international marketplace. That is a vicious cycle that may be difficult to stop, at precisely the wrong time if the global economic recovvery continues to be painfully slow. Korea has difficult choices in its immediate future: pressing the U.S. to finally ratify the KORUS FTA should be a top priority.
Showing posts with label G20. Show all posts
Showing posts with label G20. Show all posts
Friday, November 19, 2010
Tuesday, November 2, 2010
Aye, There's the Rub: Korean Inflation Hits 20 Month High While the US, Europe, and Japan Fight Deflation
One week ago, Korea reported 3rd Quarter GDP which exhibited a slowdown on a quarter-over-quarter basis. On that basis, the Bank of Korea has resisted calls and predictions of raising domestic interest rates. The result has been a Korean Won which has been weaker than would have otherwise been expected. The Lost Seoul has reported that the weak Korean Won, particularly when compared to the Japanese Yen, has greatly helped the performance of the largest Korean corporations.
As posted here, The Lost Seoul has suggested that while the KOSPI has risen to three-year highs, and unemployment is the lowest of all OECD nations, the average Korean isn't happy, largely because of rising inflation, particularly of food prices. Weather has been particularly unkind to Korean farmers this year: even cabbage which is used to make the most famous Korean food, kimchi, has been in short supply. Today, that anecdotal evidence was confirmed: Bloomberg reported that Korean inflation is the highest it has been in 20 months. This makes the Bank of Korea's job more difficult. As was posted previously, The Lost Seoul described how the "wealth" effect, was not being shared among average Koreans. Inflation, in all forms, usually increases prices of all goods, relatively speaking. That is not the case in Korea, however, and thus, the average Korean does not feel wealthier, which leads to less consumption.
First, wage inflation is kept low by the ongoing underemployment (described here), particularly among young people in their early 20s. Second, the real estate market has remained subdued, at best. Third, employee participation in Employee Stock Ownership Plans (ESOPs) is low. Why does this matter? It matters because the largest Korean companies are the largest, by far, employers. As the KOSPI has risen to 3-year highs, the wealth effect due to increases in equity prices are not being shared by the employees. As a result, the employees' purchasing power has risen to meet inflation. Perhaps you could suggest that this is the case in the United States as well, except there exist far more developed pension plans, which are some of the most important equity owners of US equities. As a result, employees at US corporations can actually see financial statements in which the value of their equity holdings will increase as the stock market rises. The same cannot be said about Korea, so the "wealth" effect is small, and almost non-existent.
For the Bank of Korea, the spectre of stagflation has now appeared. Stagnant economic growth coupled with inflation equals stagflation. The global imbalances, if they persist, continue to make the outlook for the Korean economy shaky in the short-term, despite hard-fought gains made in quality and global competitiveness. The Bank of Korea may have its most delicate balancing act in the months ahead. No wonder it has not made violent moves in either direction, which would only increase the instability. Small countries like Korea must wait and see what the effects of these global imbalances on Korean corporations, and as an extension, the Korean economy.
The Lost Seoul
As posted here, The Lost Seoul has suggested that while the KOSPI has risen to three-year highs, and unemployment is the lowest of all OECD nations, the average Korean isn't happy, largely because of rising inflation, particularly of food prices. Weather has been particularly unkind to Korean farmers this year: even cabbage which is used to make the most famous Korean food, kimchi, has been in short supply. Today, that anecdotal evidence was confirmed: Bloomberg reported that Korean inflation is the highest it has been in 20 months. This makes the Bank of Korea's job more difficult. As was posted previously, The Lost Seoul described how the "wealth" effect, was not being shared among average Koreans. Inflation, in all forms, usually increases prices of all goods, relatively speaking. That is not the case in Korea, however, and thus, the average Korean does not feel wealthier, which leads to less consumption.
First, wage inflation is kept low by the ongoing underemployment (described here), particularly among young people in their early 20s. Second, the real estate market has remained subdued, at best. Third, employee participation in Employee Stock Ownership Plans (ESOPs) is low. Why does this matter? It matters because the largest Korean companies are the largest, by far, employers. As the KOSPI has risen to 3-year highs, the wealth effect due to increases in equity prices are not being shared by the employees. As a result, the employees' purchasing power has risen to meet inflation. Perhaps you could suggest that this is the case in the United States as well, except there exist far more developed pension plans, which are some of the most important equity owners of US equities. As a result, employees at US corporations can actually see financial statements in which the value of their equity holdings will increase as the stock market rises. The same cannot be said about Korea, so the "wealth" effect is small, and almost non-existent.
For the Bank of Korea, the spectre of stagflation has now appeared. Stagnant economic growth coupled with inflation equals stagflation. The global imbalances, if they persist, continue to make the outlook for the Korean economy shaky in the short-term, despite hard-fought gains made in quality and global competitiveness. The Bank of Korea may have its most delicate balancing act in the months ahead. No wonder it has not made violent moves in either direction, which would only increase the instability. Small countries like Korea must wait and see what the effects of these global imbalances on Korean corporations, and as an extension, the Korean economy.
The Lost Seoul
Saturday, October 23, 2010
S. Korea Government Studying `Several' Measures to Control Capital Flows. 또? 아직도 하나 안배웠습니까?
Today, this article appeared on Bloomberg.com.
http://www.bloomberg.com/news/2010-10-21/s-korea-government-studying-several-measures-to-control-capital-flows.html
The reason for these measures would be to control the rise of the Korean Won against the US dollar. This article has pointed out that the Korean Won has increased by 6.6% over the recent past, which would make Korea the 3rd strongest amongst non-Japan Asian countries.
Even Bloomberg has it wrong. Compared to the USD, yes the KRW has appreciated. However, today the EUR/KRW has increased to 1575 from approximately 1480 two months ago. In addition, the JPY/KRW exchange rate has increased to 13.9 from a low of 13.35 in the middle of September. You can read my observation that the elevated JPY/KRW has created for Japan in my post here: http://seoulgyopoguide.blogspot.com/2010/09/koreas-reason-for-feasting-this-year.html
The problem here is that measures to control the foreign exchange rate of countries of Korea's GDP and capital flows almost always fails. Take the Japanese example. Recently, the Yen hasn't weakened at all despite repeated public comments, and foreign exchange intervention by the Bank of Japan. During the financial crisis of 2008, the BOK tried to actually defend its currency but instead, the Won depreciated by approximately 20% from the levels it tried to defend. Why is that? The global capital flows were larger than the amount of intervention. Quite simple, really.
This time, Korea is trying to weaken its currency, in order to keep its competitive advantage in the international marketplace for exports. World-class Korean products are relatively cheap compared to European and Japanese competition already. In addition, Korean citizens will experience a much greater risk of inflation in the near-term. Normally, interest rates need to increased in order to quell inflation. Doing so, when the rest of the world (except Australia) is keeping interest rates steady (and the U.S. is effectively lowering rates), will lead to increased demand for the Won.
Longer-term, the proposals considered by the BOK will weaken Korea's position in the global economy. Unilateral attempts to affect currency levels are not only almost always unsuccessful, but the countries that attempt to do so are perceived to be weak. The Swiss National Bank and BOJ are the two most recent exaples. No one believes in what these institutions are doing any longer. The result of the proposals considered by the BOK would inevitably be that when Korea wants to attract additional capital, it will not be able to spur demand for the KRW quickly enough.
In other words, unnatural measures will lead to unnatural circumstances The victims? Korean citizens.
http://www.bloomberg.com/news/2010-10-21/s-korea-government-studying-several-measures-to-control-capital-flows.html
The reason for these measures would be to control the rise of the Korean Won against the US dollar. This article has pointed out that the Korean Won has increased by 6.6% over the recent past, which would make Korea the 3rd strongest amongst non-Japan Asian countries.
Even Bloomberg has it wrong. Compared to the USD, yes the KRW has appreciated. However, today the EUR/KRW has increased to 1575 from approximately 1480 two months ago. In addition, the JPY/KRW exchange rate has increased to 13.9 from a low of 13.35 in the middle of September. You can read my observation that the elevated JPY/KRW has created for Japan in my post here: http://seoulgyopoguide.blogspot.com/2010/09/koreas-reason-for-feasting-this-year.html
The problem here is that measures to control the foreign exchange rate of countries of Korea's GDP and capital flows almost always fails. Take the Japanese example. Recently, the Yen hasn't weakened at all despite repeated public comments, and foreign exchange intervention by the Bank of Japan. During the financial crisis of 2008, the BOK tried to actually defend its currency but instead, the Won depreciated by approximately 20% from the levels it tried to defend. Why is that? The global capital flows were larger than the amount of intervention. Quite simple, really.
This time, Korea is trying to weaken its currency, in order to keep its competitive advantage in the international marketplace for exports. World-class Korean products are relatively cheap compared to European and Japanese competition already. In addition, Korean citizens will experience a much greater risk of inflation in the near-term. Normally, interest rates need to increased in order to quell inflation. Doing so, when the rest of the world (except Australia) is keeping interest rates steady (and the U.S. is effectively lowering rates), will lead to increased demand for the Won.
Longer-term, the proposals considered by the BOK will weaken Korea's position in the global economy. Unilateral attempts to affect currency levels are not only almost always unsuccessful, but the countries that attempt to do so are perceived to be weak. The Swiss National Bank and BOJ are the two most recent exaples. No one believes in what these institutions are doing any longer. The result of the proposals considered by the BOK would inevitably be that when Korea wants to attract additional capital, it will not be able to spur demand for the KRW quickly enough.
In other words, unnatural measures will lead to unnatural circumstances The victims? Korean citizens.
Friday, October 22, 2010
영어 (비지너스) Hint of the Day #9: 영어로 어떻게 인사할까? 외국분들이 한국에 도착하는데....
These are the best ways to introduce yourself in English. Since there will be many visitors to Korea in the coming days, you should try to be comfortable in using these. They are very flexible.
In Korean, 처음 봽겠읍니다 is probably closest in formality to "How do you do," or "It's a pleasure meeting you."
In Korean, 방가워요 is of course perfectly acceptable amongst friends, and "안영" is obviously inappropriate for use in a business meeting.
English is similar in many ways. Below are greetings that can be used in business settings. I recommend picking one, and becoming confident in it. You may believe that you are being repetitive, but since the listener is always changing, it is a unique greeting to the listener, so it is no problem.
(o) Nice to meet you. I'm [JH Kim].
(o) Nice meeting you.
(o) Very nice to meet you.
(o) Very good to meet you.
(o) It's a pleasure meeting you. (This is quite formal. Not really for meeting peers.)
(x) How do you do? (This is not widely used currently. It is not incorrect in any way, but it is not used).
(x) Greetings. (Again, this is not wrong but it is not commonly used).
(x) What's up? or Hey (This is for friends only, and not to be used in business settings. However, these are common phrases used between friends.)
It seems like a lot, but you only need to be comfortable in using one, and then use it over and over. It will be perfectly acceptable.
Good luck,
The Lost Seoul
In Korean, 처음 봽겠읍니다 is probably closest in formality to "How do you do," or "It's a pleasure meeting you."
In Korean, 방가워요 is of course perfectly acceptable amongst friends, and "안영" is obviously inappropriate for use in a business meeting.
English is similar in many ways. Below are greetings that can be used in business settings. I recommend picking one, and becoming confident in it. You may believe that you are being repetitive, but since the listener is always changing, it is a unique greeting to the listener, so it is no problem.
(o) Nice to meet you. I'm [JH Kim].
(o) Nice meeting you.
(o) Very nice to meet you.
(o) Very good to meet you.
(o) It's a pleasure meeting you. (This is quite formal. Not really for meeting peers.)
(x) How do you do? (This is not widely used currently. It is not incorrect in any way, but it is not used).
(x) Greetings. (Again, this is not wrong but it is not commonly used).
(x) What's up? or Hey (This is for friends only, and not to be used in business settings. However, these are common phrases used between friends.)
It seems like a lot, but you only need to be comfortable in using one, and then use it over and over. It will be perfectly acceptable.
Good luck,
The Lost Seoul
Monday, October 18, 2010
Korean Supreme Court Acquits Defendant in KEB (외환은햏) Sale. Finally.
Recently, the Korean Supreme Court acquitted the defendant in the Korea Exchange Bank sale to Lone Star, a private equity firm. This was long overdue, but it is a very good precedent for Korea, and the advancement of Korea into the international business community.
http://joongangdaily.joins.com/article/view.asp?aid=2927203
You may have heard about this case. KEB was sold to Lone Star during the financial crisis which began in 1998, when Russia defaulted on its sovereign debt.
There are a large number of details but here are the highlights.
a. At the time, Korean sovereign debt traded at a yield of over 13% for 10 years.
b. Korean banks were largely seen as insolvent as a result of over-concentration to large Chaebols.
c. Daewoo and Hyundai Group faced great finanical difficulty, and only huge reorganization saved the healthy subsidiaries such as Hyundai Heavy.
d. KAMCO (Korea Asset Management Corporation) was formed to bail out failed Korean banks and take many of the bad assets from the failing banks. This is now a template of sorts for other countries around the world.
e. KEB was sold to Lone Star at a time when the debt of KEB was trading in the market at 15-25% of face value (i.e. 75%-85% loss on initial investment)
There have been a number of lawsuits which have challenged the legality of the KEB sale. Most (if not all) have been politically motivated. It has been a very embarrassing tale, where Korea has, AFTER THE FACT, opposed the sale of KEB to a foreign investor. This case has threatened Korea's position in the global economy.
Here is why.
a. Opposition centered on the price that KEB was sold to Lone Star. The fact is that debt was trading in the open market at 15-25% at that time. Since it is clear that the market did not believe that KEB could even pay for its debts, the equity was effectively worth zero in the open market. Court cases have been made up to suggest that there was an understatement of book value. Book value is irrelevent when selling assets. It is like a customer paying full retail price for a luxury product, when everyone on Gmarket and eBay knows that you can buy the product substantially cheaper.
b. There was no mention of the large number of financial regulatory bodies in place at the time of the sale. KDB guaranteed assets of banks. KAMCO bought entire portfolio of banks, and bought stakes of banks themselves. MOFE and FSS both could have blocked a sale. None of these bodies prevented the sale before the fact. The court was used to complain only after the fact, when there was political uproar.
c. There were no other bidders for KEB. None.
d. Perhaps worst, these developments occurred after there was an agreeement. Preventing a sale as a result of the "national interest," also known as protectionism, is, and has been, used during times of economic strife. For example, currently there is the belief that Canada would block the sale of Potash Corporation to a consortium led by Chinese entities. In France, Finance Minister Sarkozy (now the President) told the world that a sale of Alstom would not be allowed. However, these are all occurring or occurred before a sale agreement is/was reached.
The Korean Supreme Court has correctly pointed out that at the time of the sale, it would be almost impossible to ascertain whether or not the sale took place at the "wrong" price. I would have stated it even more strongly. However, the fact that the court system in Korea has worked is welcome news for Korea's place in the international financial community.
http://joongangdaily.joins.com/article/view.asp?aid=2927203
You may have heard about this case. KEB was sold to Lone Star during the financial crisis which began in 1998, when Russia defaulted on its sovereign debt.
There are a large number of details but here are the highlights.
a. At the time, Korean sovereign debt traded at a yield of over 13% for 10 years.
b. Korean banks were largely seen as insolvent as a result of over-concentration to large Chaebols.
c. Daewoo and Hyundai Group faced great finanical difficulty, and only huge reorganization saved the healthy subsidiaries such as Hyundai Heavy.
d. KAMCO (Korea Asset Management Corporation) was formed to bail out failed Korean banks and take many of the bad assets from the failing banks. This is now a template of sorts for other countries around the world.
e. KEB was sold to Lone Star at a time when the debt of KEB was trading in the market at 15-25% of face value (i.e. 75%-85% loss on initial investment)
There have been a number of lawsuits which have challenged the legality of the KEB sale. Most (if not all) have been politically motivated. It has been a very embarrassing tale, where Korea has, AFTER THE FACT, opposed the sale of KEB to a foreign investor. This case has threatened Korea's position in the global economy.
Here is why.
a. Opposition centered on the price that KEB was sold to Lone Star. The fact is that debt was trading in the open market at 15-25% at that time. Since it is clear that the market did not believe that KEB could even pay for its debts, the equity was effectively worth zero in the open market. Court cases have been made up to suggest that there was an understatement of book value. Book value is irrelevent when selling assets. It is like a customer paying full retail price for a luxury product, when everyone on Gmarket and eBay knows that you can buy the product substantially cheaper.
b. There was no mention of the large number of financial regulatory bodies in place at the time of the sale. KDB guaranteed assets of banks. KAMCO bought entire portfolio of banks, and bought stakes of banks themselves. MOFE and FSS both could have blocked a sale. None of these bodies prevented the sale before the fact. The court was used to complain only after the fact, when there was political uproar.
c. There were no other bidders for KEB. None.
d. Perhaps worst, these developments occurred after there was an agreeement. Preventing a sale as a result of the "national interest," also known as protectionism, is, and has been, used during times of economic strife. For example, currently there is the belief that Canada would block the sale of Potash Corporation to a consortium led by Chinese entities. In France, Finance Minister Sarkozy (now the President) told the world that a sale of Alstom would not be allowed. However, these are all occurring or occurred before a sale agreement is/was reached.
The Korean Supreme Court has correctly pointed out that at the time of the sale, it would be almost impossible to ascertain whether or not the sale took place at the "wrong" price. I would have stated it even more strongly. However, the fact that the court system in Korea has worked is welcome news for Korea's place in the international financial community.
Travelling to Seoul for the G20 Summit? Travel tips for foreigners. READ THIS or be stuck in traffic.
The population of greater Seoul is approaching 25mm. Manhattan's population is approximately 15mm. Get the idea? Seoul is bigger, and busier than NY. I have lived in both, and if you believe that Seoul is still a war-torn, emerging market capitol, then you need to THINK AGAIN.
One excellent thing about Seoul: the transportation system is very organized and quite rational, given the size of the city and the density of the population. Here is what you absolutely, positively, need to know.
a. If you are coming from Incheon International Airport, you need to determine whether you are going north or south of the Han River. The Han River essentially divides the two halves of Seoul, and where you are going will affect the mode of transportation to take from the airport.
b. If you are going north of the Han River (call Gang-Buk pronounced Gang-boooook), then taking the Express Train to Seoul Station is the best, unless you are going to a very specific hotel like the Shilla, Westin, or Hyatt Grand. It is my opinion that taking the Express Train is the fastest and easiest to Seoul Station (pronounced Seoul-yuck). From there, you can take a taxi.
c. If you are going south of the Han River , then best way is to take an Express Bus to COEX (otherwise known as World Trade Center) Express Bus Terminal. It is direct, and will take from 50-65 minutes (with almost no variance from that). It costs about 11,000 KRW (10 USD). There are many, many buses going to every corner of Seoul, if you are very experienced in travelling in Korea, then you can find a bus that takes you closer to your exact destination. That said, it can be quite confusing given the number of buses. If you take the wrong bus, well, you will be lost in the 5th largest city in the world. From COEX, you can again take a taxi.
d. I do not recommend a taxi. Why? One word. traffic. It is a total crapshoot getting into Seoul if you are stuck on the wrong road entering Seoul from the main expressway (called 88). One wrong selection by your cab driver means 30-60 extra minutes. The train and the bus are relaible, and clean. Forget comparing them to Amtrak and Greyhound. They are not comparable. Not even close.
e. Once in Seoul, take taxis but leave yourself a LOT of time. If you are travelling within any business district, such as Gangnam, or near City Hall, traffic can increase your travel time by an hour greater than expectation. AN HOUR. If you are going from one of those two areas to the other (Gangnam, City Hall), then you should assume that it will take 60 minutes to cross the Han River and then it can take another 20-40 minutes to get to your destination.
f. You can take the subway as a foreigner because all of the signs are now translated to English. However, you need to know that there is no concept of "express" stops as there are in Manhattan. They are ALL "local" lines. They will be very crowded during rush hour (think Penn Station subways at rush hour). That said, it will take 50 minutes with almost no variance in timing to get from Gangnam to the City Hall area. The prices are incompable: at most, a one-way ticket on the subway is at most USD 1.75. Here is a link to the official subway map of Seoul: http://www.smrt.co.kr/Train/Subwaymap/Eng/Subwaymap.jsp
Well, those are the broad strokes. You can read some other posts here on this blog in order to get some more pointers, which will be aimed at foreigners visiting Seoul, an amazing, vibrant city. My favorite megapolis in the world. Not even close, and that includes New York, London, Tokyo, Hong Kong, and Shanghai. Seoul is the best. I may be biased, but there it is.
One excellent thing about Seoul: the transportation system is very organized and quite rational, given the size of the city and the density of the population. Here is what you absolutely, positively, need to know.
a. If you are coming from Incheon International Airport, you need to determine whether you are going north or south of the Han River. The Han River essentially divides the two halves of Seoul, and where you are going will affect the mode of transportation to take from the airport.
b. If you are going north of the Han River (call Gang-Buk pronounced Gang-boooook), then taking the Express Train to Seoul Station is the best, unless you are going to a very specific hotel like the Shilla, Westin, or Hyatt Grand. It is my opinion that taking the Express Train is the fastest and easiest to Seoul Station (pronounced Seoul-yuck). From there, you can take a taxi.
c. If you are going south of the Han River , then best way is to take an Express Bus to COEX (otherwise known as World Trade Center) Express Bus Terminal. It is direct, and will take from 50-65 minutes (with almost no variance from that). It costs about 11,000 KRW (10 USD). There are many, many buses going to every corner of Seoul, if you are very experienced in travelling in Korea, then you can find a bus that takes you closer to your exact destination. That said, it can be quite confusing given the number of buses. If you take the wrong bus, well, you will be lost in the 5th largest city in the world. From COEX, you can again take a taxi.
d. I do not recommend a taxi. Why? One word. traffic. It is a total crapshoot getting into Seoul if you are stuck on the wrong road entering Seoul from the main expressway (called 88). One wrong selection by your cab driver means 30-60 extra minutes. The train and the bus are relaible, and clean. Forget comparing them to Amtrak and Greyhound. They are not comparable. Not even close.
e. Once in Seoul, take taxis but leave yourself a LOT of time. If you are travelling within any business district, such as Gangnam, or near City Hall, traffic can increase your travel time by an hour greater than expectation. AN HOUR. If you are going from one of those two areas to the other (Gangnam, City Hall), then you should assume that it will take 60 minutes to cross the Han River and then it can take another 20-40 minutes to get to your destination.
f. You can take the subway as a foreigner because all of the signs are now translated to English. However, you need to know that there is no concept of "express" stops as there are in Manhattan. They are ALL "local" lines. They will be very crowded during rush hour (think Penn Station subways at rush hour). That said, it will take 50 minutes with almost no variance in timing to get from Gangnam to the City Hall area. The prices are incompable: at most, a one-way ticket on the subway is at most USD 1.75. Here is a link to the official subway map of Seoul: http://www.smrt.co.kr/Train/Subwaymap/Eng/Subwaymap.jsp
Well, those are the broad strokes. You can read some other posts here on this blog in order to get some more pointers, which will be aimed at foreigners visiting Seoul, an amazing, vibrant city. My favorite megapolis in the world. Not even close, and that includes New York, London, Tokyo, Hong Kong, and Shanghai. Seoul is the best. I may be biased, but there it is.
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