Although financial experts have dispelled the idea of a September crisis, rumors of such a crisis have impacted South Korea's financial markets. This week, the Korean stock market fell more than 4%, and the Korean currency was weaker than its been in almost four years.

After being a net creditor since 2000, South Korea is estimated to have become a net debtor this month. At the end of June, the country's net credit stood at less than $5.8 billion. By the end of July, it dropped to nearly zero. South Korea now faces the danger of many foreign investors cashing out.

Though planning to lower corporate taxes for business this year, the government and the Grand National Party (GNP) have decided to postpone any lowering of corporate taxes until next year. Fiscal revenues are needed to relieve the economic strain on Korean households. Because of the postponement, W8.4 trillion is expected to be generated.

Toyota plans to increase prices for the Prius hybrid passenger car and the hybrid model of the Harrier sport utility vehicle by tens of thousands of yen per unit, the sources said. The move by Toyota is likely to affect other automakers, including Nissan Motor Co., which are also exploring the possibility of increasing prices. Toyota is also considering increasing the prices of its commercial vehicles, including trucks. Other domestic makers have already announced that they will raise truck prices.

President Cho has pledged to develop KOTRA into the “hub” of Korea’s trade promotion effort in accordance with the ever-changing global trade environment. His goal is to provide a comprehensive consulting service in diverse areas ranging from products to finance, culture, and technology. He also expressed the importance of the need to expand recruitment of experts on resource-abundant regions and emerging economies in the developing world and diversity functions of KOTRA’s overseas trade centers.

Seoul stocks takes a nose dive as the main index KOSPI closed at 1,541.41, falling 26.3 points, or 1.68 percent, from the previous day. Shipbuilding, steel, and machinery, which helped the KOSPI break 2,000 last year, also lost steam due to the poor Chinese market despite the opening of the Olympics.

To make up for revenue shortfall, the South Korean government will broaden the tax base and reduce tax deductions for workers, Income Tax rates for salaried workers and the self-employed could be cut two percentage points in July next year. In additional,for example, a household headed by a salaried employee earning 60 million won per year will be subject to 700,000 won less in income tax.

China has been the largest trade partner for South Korea since 2002, Economists expect the trend to continue and grow. Surveyed from 1,000 Korean citizens showed that 50.2 percent of respondents picked China as the country that will exert the biggest impact on the country. Because of the positive projection of the impact of the ongoing Beijing Olympics, and the double-digit economic growth China has achieved over the past decade, China will have the most significant influence on its politics and economy in the next two decades.

The car makers are planning to further stretch the capacity to 250,000 by early next year.According to data from the Korea Energy Management, small cars log more miles on the same amount of fuel. Hyundai posted sales of 4,615 units last month, up 28 percent from the same period last year. The Verna also showed sales growth of 10 percent. GM Daewoo (Gentra model)have soared virtually fivefold to 5,748 this year.

According to The Bank of Korea (BOK), wholesale prices rose to 12.5 percent in the past 2 months, compared with 10.5 percent a month ago. Manufactured goods prices grew 17.9 percent last month from a year before,and electricity and water prices grew 4.6 percent. Also, vegetable and fruit prices grew 1 percent year-on-year.