South Korea is taking major steps to boost its standing in global financial markets. Finance Minister Choi Sang-mok recently met with U.S. investors in New York to discuss the country’s upcoming inclusion in the World Government Bond Index (WGBI). This move, set for November 2025, is part of a broader strategy to attract foreign capital, improve corporate practices, and invest in future technologies like artificial intelligence.
Korea’s Entry into a Major Global Bond Index
South Korea’s inclusion in the FTSE Russell World Government Bond Index (WGBI) is a huge step forward. This marks the first time the country will be part of this important index, which is tracked by many of the world’s largest investment funds.
Finance Minister Choi explained that this shows global recognition of Korea’s work to create a better investment environment. Being added to the WGBI could bring billions of dollars in new investment into the country. This influx of capital is expected to make South Korea’s financial markets more stable and improve its reputation on the world stage.
Choi also promised investors that the government will make sure that recent reforms continue to work as planned. These changes were made to improve how Korea’s regulatory systems operate and to increase transparency for foreign investors.
Addressing the “Korea Discount” to Boost Company Values
For years, South Korean companies have faced what is known as the “Korea discount.” This means they are often valued lower than similar companies in other countries. Investors have had concerns about corporate governance and geopolitical risks.
To fix this problem, the government has launched the “corporate value-up program.” Choi described this initiative as a key part of the government’s plan to increase the value of local businesses and build more trust with foreign investors.
The program focuses on several key areas:
- Improving corporate governance and management practices.
- Encouraging companies to adopt policies that are more friendly to shareholders.
- Bringing business standards in line with global best practices.
- Making financial reporting more transparent and easier to understand.
This program directly answers the call from international investors for better corporate behavior. By tackling these long-standing issues, Korea hopes to eliminate the discount and help its companies compete more effectively on a global level.
A Future Focused on AI and Clean Energy
The finance minister also highlighted Korea’s plans to become a leader in the artificial intelligence (AI) industry. He pointed to the country’s world-class semiconductor technology as a major advantage that will help drive AI development.
However, the massive computing power needed for AI requires a lot of energy. To meet this demand, Korea is developing a diverse energy strategy. This plan aims to support industrial growth while also moving toward the goal of carbon neutrality.
| Energy Source | Strategic Goal |
|---|---|
| Nuclear Power | Expand capacity to provide a stable and reliable energy supply. |
| Hydrogen | Develop as a key clean energy source for the future. |
| Renewables | Continue investing in solar, wind, and other renewable projects. |
This focus on both technology and sustainability is designed to boost Korea’s long-term economic growth and keep it competitive in a changing world.
Navigating Tensions between the U.S. and China
With trade disputes between the United States and China on the rise, South Korea is in a difficult position. The country relies heavily on both nations for trade and investment, making careful diplomacy essential for economic stability.
Choi assured investors that Korea is actively communicating with the U.S. about policies that could affect its businesses, such as the Inflation Reduction Act (IRA). This U.S. law provides subsidies for green energy, which could impact some Korean industries.
At the same time, Korea is working to find solutions that benefit both itself and China, its largest trading partner. The goal is to maintain strong economic ties with both superpowers while protecting Korea’s own interests. By keeping communication open and seeking balance, Korea aims to provide a stable and predictable environment for global investors.
