Good morning, fellow Koreans,

I returned home last week from the state visit to China. The two countries that mark the 20th anniversary of diplomatic ties this year have so far made remarkable progress in our bilateral relations. Every year, approximately 6.5 million visitors travel back and forth between our two countries. Bilateral trade surpassed US$220 billion, which is even higher than the trade volume with the United States and Japan combined.

During the visit, I held separate meetings with President Hu Jintao and Prime Minister Wen Jiabao and had very useful discussions with them on recent developments surrounding the Korean Peninsula and in East Asia. The Chinese side, too, showed more profound interest in the meetings than at any time before. They also assessed that the meetings had produced remarkable results.

We reaffirmed the common goal for peace and stability on the Korean Peninsula, including denuclearization of North Korea, and agreed to continue to work together toward that goal.

In regard to the illegal fishing by Chinese boats in Korean waters, I emphatically urged the Chinese Government to take effective actions to prevent any recurrence of the tragic accident that occurred lately. President Hu Jintao consented to my request and promised to further strengthen the Chinese government’s strict management of Chinese fishing crews and instruction for them in the future.

In connection with a Korea-China FTA, China asked for a prompt initiation of negotiations. Unlike FTAs with other countries, Korea-China FTA is closely related to security as well as economy.

However, even if official negotiations begin, they will only be able to move on to the next phase when the two sides could in advance reach an agreement on agricultural produce and other sensitive issues. China agreed to our firm position on this matter.

In addition, China’s legislation of the new social insurance act for health, unemployment and workers’ compensation will impose annual average burden of 450 billion won on Korean businesses operating in China and their Korean resident employees. Our two countries agreed to positively discuss the possibility of exempting them from such a burden.

Until now, Korean companies have been actively venturing into China, but Chinese businesses have scarcely made investments in Korea. During my meetings with President Hu Jintao and Prime Minister Wen Jiabao, they informed me that Chinese companies have intention to more actively invest in Korea.

If Chinese companies make investments in Korea, it would serve as an opportunity for us to create more job opportunities while they would have chances to advance into wider global markets.

In consideration of the 2012 Yeosu Expo Korea, China designated this year as Visit Korea Year. In this connection, I asked the Chinese Government to encourage an increasing number of its citizens to visit Korea. In response, the Chinese Government promised to actively cooperate.

My fellow Koreans,

In my New Year’s Address to the Nation, I noted that the Administration’s goals in running economic affairs this year would be geared toward stabilizing the lives of low-income families. As part of the efforts to realize that goal, the top priority will be placed on stabilizing consumer prices, which has a direct bearing on the lives of low-income families.

Last year, the inflation rate stood at 4 percent, yet the soaring consumer prices for daily necessities weighed heavily on the shoulders of low-income families. On the occasion of the New Year’s briefing of the Ministry of Strategy and Finance on its undertakings, I had the chance to listen to what Park Shin-hee, an ordinary housewife, had to say about the consumer prices.

“Doing grocery shopping is really intimidating. You can buy almost nothing with 10,000 won. Tofu, bean sprouts and just a few more items combined easily exceed 10,000 won, which means there is not much to take home.”(Park Shin-hee, housewife) 

Due to an increase in the prices of international raw materials and abnormal weather conditions last year, the prices of daily necessities and groceries have soared by a large margin. I truly feel sorry for the fact that, because of such an adverse situation, the Government measures to stabilize consumer prices could not produce the outcome that the people had expected.

Growth is of great importance. Still, the Government will endeavor to ensure that consumer prices remain within the low 3 percent range, so that the actual impact could be felt in the everyday lives of low-income families.

The Government will introduce a real-name policy for price controls. In line with the new policy, high-ranking government officials in relevant ministries will be named to supervise the supply and demand of basic necessities that are closely linked to the lives of the ordinary people.

On top of this, the Government will closely monitor the actual conditions of market distribution of imported items whose prices should go down by the FTAs, so that consumers could enjoy substantive benefits.

As for personal services such as restaurants and beauty parlors, the Government will introduce a new system under which the price list has to be hung outside as advanced nations do.

Assistant Deputy Director Sohn Jeong-jun of the Ministry of Strategy and Finance explained the system.

“As part of the Government efforts to work with the public, the ministry conducted an idea contest for stabilizing consumer prices. The response was overwhelming as respondents turned in more than 1,000 entries. Among them, an Incheon resident recommended that restaurants and beauty shops should hang their price lists outside their shops. Seeing that it would provide a great convenience for potential customers, we adopted it.  I myself had the experiences of entering a restaurant with my girl friend and coming right out embarrassed, after finding out their high prices.”(Sohn Jeong-jun, Assistant Deputy Director of Ministry of Strategy and Finance)

The concern for utility rates is understandable as well. Sung Jin-wook, a fried chicken shop owner, said, “Who would want to raise the prices of fried chicken? But I have no choice when all the supplier prices rise—the material costs, electricity rates, gas rates. Can’t the Government at least control the public utility costs like power and gas rates?”

The reality is that the public utility companies have been accumulating deficits as their prices cannot meet their production costs. The Government is agonizing over this situation.

Nevertheless, considering the utility rates are directly connected with the finance of the low-income families, the Government will minimize the increase of their prices.

In fact, the utility rates for low-income families have already been frozen or readjusted at a lower price. The electricity bill for low-income families, farmers and very small business owners remained frozen when the price increased for other users last December. Low-income households receive discounts of up to 15 percent for city gas bill.

Fellow Koreans,

Seollal holidays are just a week away. Beginning December 29, the Government has been closely watching the price movements of 40 basic consumer goods plus those used for Seol celebrations.

During the global economic crisis, the Korean economy has relatively produced better results in many aspects compared to other countries. But the lives of low-income individuals have been very difficult last year.

Thinking of  their hardships, I have had many troubled days and sleepless nights. Throughout the year, the Government will do all it can to stabilize consumer prices.

My fellow citizens,

I only hope that Seollal will be an occasion for all of you to share warm love with your families. If you plan to travel to your hometowns, watch for the cold weather and may your journey be safe and sound.

I offer my special thanks to the firefighters and police officers who will not be able to take days off during the holidays.

Once more, I wish every one of you happy holidays. Thank you very much.