Industrial production, however, fell 0.9 percent on-month in December, marking the third month in a row that numbers declined. In November, it shrank 0.3 percent, the report said.

“Last month’s weak output reflected minus growth in audio-video and communications as well as the machinery sector,” the statistical office said.

The country’s service sector expanded a mild 1.6 percent on-year in December, helped by demand in the transportation and education areas although zero growth was posted compared to the month before.

For the whole of 2011, industrial output in mining and manufacturing rose 6.9 percent on-year, with the service sector posting a gain of 3.2 percent.

Retail and construction sectors gained 1.5 percent and 0.5 percent, respectively, compared to December 2010, while facility investments contracted 2.1 percent from the year before, the report showed.

Reflecting the overall sluggish output, the country’s factory operating rate fell 1.5 percentage points from the previous month to 77.6 percent of capacity in December, with inventory gaining 2.8 percent vis-a-vis the previous month.

The report also showed industrial output for all South Korean industries, including manufacturing and services sectors, gaining 1.9 percent last month, down from a growth of 3.4 percent in November.

The Haaretz daily reported Tuesday that Seoul’s proposal to acquire Iron Dome, added a new dimension to an earlier offer to buy “a significant quantity” of Israeli-made weapon systems if the Jewish state agreed to purchase 25-30 T-50s manufactured by Korean Aerospace Industries.

South Korean ambassador to Israel Ilsoo Kim said Israel’s defense industry stood to gain contracts worth billions of dollars if the Golden Eagle was chosen over Italy’s M-346 Master built by Alenia Aermacchi.

“Korea is spending $30 billion a year on defense and we have to upgrade our capabilities considering the changes around us,” Kim told The Jerusalem Post, hinting at the scale of the contracts Israel could gain if it selected the T-50.

South Korea’s military has shown interest in Iron Dome for some time and its addition to Seoul’s package could swing the contract for jets to replace the Israeli air force’s 200 aging U.S.-built Vietnam-era Douglas A-4 Skyhawks. Most of them have been mothballed.

Seoul is also keen to acquire surveillance satellites, upgrades for its combat aircraft, new unmanned aerial vehicles — an Israeli specialty — anti-tank missiles, new command-and-control systems and aid in developing an indigenous fighter.

Enes Park, KAI’s executive vice president for marketing, said earlier this month that the planemaker was having talks with IAI, flagship of Israel’s defense sector, and Haifa’s Elbit Systems, one of the world’s largest defense electronics manufacturers, about joint ventures that could involve lucrative deals for Israeli companies.

Seoul upped the ante on the contract after the Israeli air force recommended earlier this month buying the Italian training aircraft.

However, there is a strong lobby within Israel’s defense sector that favors the South Korean jet. Some companies that would benefit from South Korean contracts have been pressing the Defense Ministry to select the T-50.

Seoul has complained for months that Israel was unfairly favoring Alenia Aermacchi.

Italy had been seen as the front-runner because of Israeli Prime Minister Binyamin Netanyahu’s close relations with Prime Minister Silvio Berlusconi. But Berlusconi’s resignation in November, hastened by a slew of political scandals, was thought to have undermined the Italian position.

Even so, the South Koreans complained Israel had initialed a preliminary agreement with Italy, which if it went ahead was expected to be part of what Haaretz termed “a wide-ranging trade deal” between the countries.

Amos Harel, one of Israel’s leading defense writers, reported in Haaretz that seven months ago Defense Ministry Director General Udi Shani had indeed signed a preliminary deal with his Italian counterpart.

“The document, which was formulated according to demands submitted by Israel, expanded the deal beyond its original framework,” Harel observed.

Italy reportedly pledged that if Israel signed with Alenia Aermacchi, “the two sides would sign additional deals worth more than $1 billion.” These would include joint development of satellite projects, probably involving IAI, and the sale of UAVs to Italy.

The Jerusalem Post recently reported that Rome was discussing a possible barter deal under which Italy would get two AWACs aircraft from state-run Israel Aerospace Industries in exchange for the M-346 deal.

Seoul has indicated that if Israel buys the Italian trainer, all military procurement deals between the Jewish state and South Korea would be scrapped, Israel’s media says. In recent years, Seoul has purchased Israeli defense products worth an average of $280 million annually.

The Post said that despite the air force’s recommendation to buy the Italian M-346, “the deal is far from over.”

The ministry’s procurement department is scheduled to submit its final recommendation to Shani next month and a decision will be made shortly thereafter.

So it looks like a cliffhanger.

“Negotiations are still going on with the sides,” a senior defense official said. “The Defense Ministry’s working to obtain the greatest deal for Israel and the decision will be based on a variety of variables.”

 This new service will mean that Korean Air will operate routes to/from Seoul throughout 16 cities in 11 European countries and will link London and Seoul 10 times a week through both Heathrow and Gatwick gateways.

 As well as boosting the service to Korea, the Gatwick flight timings will also allow the UK traveller to connect onwards to Chinese, Japanese and South East Asian destinations. There are also many dual destinations opportunities for the leisure traveller, including Bali, Australia and New Zealand.

Korean Air’s Boeing 777s will be used on the Gatwick route, offering a total of 261 seats including eight First Class fully flat Kosmo Sleeper seats, 28 Prestige Plus (Business) seats and 225 Economy seats.

Mr. Jeong Soo Park, General Manager for Korean Air’s London office, said, “We are pleased to announce our UK route frequency increase with the introduction of London’s Gatwick Airport. In addition to increasing the choice for our business travellers, we also look forward to welcoming leisure passengers looking to travel to Asia and beyond. This expansion reflects our ongoing commitment to providing convenient flight times and access to South Korea, as well as onward connections to South East Asia and Australasia. We look forward to welcoming our first customers through Gatwick this year and building a long-term relationship with the airport.”

Gatwick Airport’s Chief Commercial Officer, Guy Stephenson, added, “We are very excited to welcome Korean Air to Gatwick. South Korea remains one of Asia’s fastest growing economies and an important growth market for the UK. It is critical therefore that the UK has strong connections to this country and we are pleased that the airline has chosen to grow its London-Seoul route from Gatwick. We will work in partnership with Korean Air to help make this route a success and look forward to building a strong, long-term relationship with them.”

The current account surplus reached US$5.05 billion in November, up from a revised $4.13 billion the previous month, according to the Bank of Korea (BOK). The current account is the broadest measure of cross-border trade.

The November data marked the largest surplus since the $5.49 billion tallied in October last year.

The current account has remained in the black for the 21st straight month on the back of exports, which account for about 50 percent of Asia’s fourth-largest economy.

In the first 11 months of this year, the combined surplus amounted to $24.2 billion. The BOK revised its yearly surplus target to $27.2 billion for this year.

In October, South Korea posted a current account surplus, primarily because imports fell on-month at a faster pace than exports amid the global slowdown. But the country’s overseas shipments remained firm in November, withstanding developments in the eurozone and global economic uncertainty.
The eurozone debt crisis and the dimmer global economic outlooks, however, are blurring prospects for the export-dependent South Korean economy for next year. The BOK puts its 2012 current account surplus at $13 billion.

South Korea’s goods balance posted a surplus of $4.49 billion in November, up from a revised $3.55 billion in October, the central bank said.

Exports rose 12.6 percent on-year to $47.1 billion and imports gained 10.4 percent to $42.6 billion.

The service account, which includes outlays by South Koreans on overseas trips, posted a surplus of $357.2 million last month, up from $2.8 million the previous month.

The primary income account, which tracks wages for foreign workers and dividend payments overseas, logged a surplus of $445.6 million in November, down from $643.5 million tallied in October.

Meanwhile, the capital and financial account, covering cross-border investments, posted a net outflow of $6.63 billion in November, larger than the net outflow of a revised $4.5 billion in October, the central bank said.

After Kim Jong II’s  death, U.S. defense officials have consulted with their South Korean counterparts as they monitor the ongoing developments in North Korea.

Pentagon Press Secretary George Little says that Defense Secretary Leon Panetta called South Korean Defense Minister Gen. Kim Kwan-jin Monday morning to reaffirm  America’s  ”strong commitment” to stability on the Korean peninsula and to the alliance with South Korea.

“He made it clear that the United States stands with the Republic of Korea in this time of uncertainty,” said Little.

During the 15-minute conversation, Little said “both men agreed that it was critical to remain prudent with respect to all matters related to our security posture there, and pledged to keep one another informed in the coming days.”

In Seoul, Gen. James Thurman, the commander of U.S. Forces Korea, met with Gen. Jung Seung-Jo, South Korea’s joint chiefs chairman,  to discuss how both militaries would continue to monitor developments in North Korea.   The United States has 28,500 military forces in South Korea, the vast majority of them from Army units.

South Korea has raised its troops to emergency alert status, but the U.S. military has not changed its security posture.  Little said that “U.S.  force protection levels in South Korea have not changed” and “not been elevated.”  He also said  no unusual North Korean military movements connected to the death of Kim Jong II have been detected.

On Monday, North Korea conducted a missile test, launching two small missiles from its eastern coast.   A senior defense official says the  U.S. believes the launches were  planned to take place before Kim Jong II’s death.

Traveling in Germany, Joint Chiefs Chairman Gen. Martin Dempsey  said the U.S. and South Korea have not seen any change “in North Korean behavior of a nature that would alarm us.”

According to a report by the U.S. Forces Press Service, Dempsey said the U.S. and South Korea had quickly set up a network “to discuss this issue and to determine what we could do to contribute to understanding what might happen next,” Dempsey said.  “It is my expectation … that he will be the successor,” the chairman said of Kim Jong Un,  Kim Jong II’s 28-year-old son who has has already been identified by North Korea as the “Great Successor.”

“Dempsey said of  Kim Jong Un, “ I would only say at this point that he is young to be put in this position, and we will have to see if it, in fact, is him and how he reacts to the burden of governance that he hasn’t had to deal with before.”

The magazine’s readers also ranked Korean Air’s advertising campaign the best in the business for the fourth year in a row.

“We are honored to be named best airline in Asia for the fifth consecutive year,” said John Jackson, Korean Air’s VP of Marketing for the Americas.  ”Korean Air is committed to providing travelers the most comfortable environment and attentive service. We’re happy that Business Traveler readers around the world are acknowledging that.”

Korean Air recently introduced A380 flights to Asia from JFK and LAX, and is America’s largest Asian airline, flying from more cities in the Americas to more destinations in Asia than any other carrier.

As for the global advertising, “The campaign is connecting to travelers,” says Connie Park, director of the Korean Air team at HSAd. “It’s sensual, chic, and stylish and has a bit of spice that’s creating attention to the brand.”

Jackson said Korean Air’s ad campaign “reflects the stellar and progressive nature of our services. We offer unparalleled service into Asia from the Americas and our advertising reflects this unique aspect.”

Korean Air’s service has been recognized worldwide repeatedly.  This year, Korean Air was been awarded Best Airline in Northern Asia and Best Airport Staff/Gate Agent by Global Traveler magazine in its annual GT Tested Awards.  Other publications like Conde Nast Traveler and Travel & Leisure also have praised Korean Air’s service.

The action prompted a muted response from the Chinese government, which has taken a defiant stance in several recent maritime spats but has been more restrained with incidents that take place in undisputed waters under the control of other governments.

The coast guard arrested the vessel captain and eight crew members after they resisted warning calls and the boarding of the vessel around 7 a.m.

The vessel was trawling for fish and crab within South Korea’s exclusive economic zone in the Yellow Sea, about 85 kilometers southwest of Socheong Island, one of the western-most South Korean islands.

In recent years, China has increasingly asserted territorial rights at sea, clashing with Japan over several islands, with several Southeast Asian nations about portions of the South China Sea, and even with the U.S. and South Korea over military exercises in the Yellow Sea last year.

The increase has climbed since the Seoul Olympic Games 2000 which attracted five million visitors, to seven million in 2009, eight million in 2010, and now to over nine million in 2011.?

Australian travellers visiting Korea have increased by over 37 per cent in the month of October alone, and with the introduction of ski tourism packages for the 2010/11, the ski season will give an even greater boost to this figure during the winter months.?

Ski tour specialists including Skimax, Value Tours, and JTB Australia have introduced special ski packages for this winter season.? The recent success of the K-Pop concert in Sydney, as well as many Hallyu events for the Asian Australian market is expected to draw more Australians with an interest in Korean music, films and dramas to Korea in the coming years.

The South Korean government has implemented many events to draw more visitors, including Fun Ski Festival events from 15 December through till 4th March, the Yeosu Expo 2012, and shopping attractions like the Korea Grand Sale 2012 from January 9 – 29 February.

Other countries showing an increase in visitor numbers includes Japan with a 7 per cent increase, as well as an excellent 17 per cent increase from China.

The talks, set to resume Tuesday in Seoul, are aimed at revising a bilateral nuclear cooperation treaty for the first time in four decades. And the two allies’ expectations are as far apart as their perspectives on what it would mean for South Korea to adopt the technologies, which can be used to create fuel for reactors, but also to make nuclear weapons.

“The United States opposes the spread of enrichment and reprocessing even to South Korea, because it wants to set an absolute standard to prevent nuclear weapons proliferation,” said William Tobey, a senior fellow at the Belfer Center for Science and International Affairs at Harvard University. “While Seoul does not pose such a threat, a hard and fast standard will be the strongest bulwark against weapons proliferation by other states.”

Besides, Mr. Tobey said, “any hope of curbing the North’s nuclear weapons program must entail like restrictions on the South.”

But in South Korea, many believe they have lived with this American stricture too long. Now is the time, they say, for President Lee Myung-bak to use his vaunted friendship with President Barack Obama to get what his country’s economic future requires.

“Our alliance, billed as stronger than ever, must be solid not just in name but must produce solid fruits,” said Song Min-soon, a former foreign minister who is now an opposition lawmaker.

The negotiations “will serve as an important test” of how the United States wants to be regarded by South Koreans, Mr. Song said. “If they pressure South Korea too much, it might spawn anti-American sentiment” and “calls for a nuclear sovereignty,” he said.

North Korea has built its nuclear bombs with plutonium obtained by reprocessing spent nuclear fuel. Last week, it said it had also made rapid progress in uranium enrichment.

South Korea also wants to reprocess spent fuel from its 21 reactors, but for peaceful reasons, it says. Reprocessing would allow it to reduce its stored nuclear waste and create fuel for a new generation of reactors.

Seoul says it is running out of time: the cooling ponds where spent fuel rods are stored are filling up fast. And in a small country, building a new, central repository for nuclear waste is a political near-impossibility, especially since the Fukushima disaster in Japan.

South Korea also wants to enrich uranium to make fuel for its reactors, which generate 36 percent of the country’s electricity. It currently imports all of its enriched uranium. Seoul says the ability to complete a “fuel cycle,” from enrichment to recycling, is central to its goals of meeting 60 percent of its electricity needs with nuclear power by 2030 and becoming a global exporter of nuclear reactors.

Its major obstacle is the treaty now being renegotiated. In 1972, when Washington agreed to transfer nuclear material, equipment and technical expertise to South Korea, it required Seoul to commit itself to nonproliferation rules that included a ban on enrichment and reprocessing.

Over the years, South Korea has repeatedly asked Washington to revise the pact, which was last amended in 1974. With the treaty due to expire in 2014, both sides finally sat down in October 2010 to begin talks. Tuesday begins the fourth round of negotiations, and both sides have been tight-lipped about their progress.

“We want a successor agreement that will expand the level of cooperation between the United States and the Republic of Korea in the civil nuclear energy area and that will reflect the increased importance that the Republic of Korea is playing in the global nuclear energy arena,” the chief U.S. negotiator, Robert J. Einhorn, said Monday at a news conference in Seoul, using South Korea’s formal name.

His South Korean counterpart, Park Ro-byug, said the allies were negotiating “in what scope and in what methods” their conflicting desires could be reconciled.

According to analysts from both countries, options under discussion include building an enrichment plant in South Korea but placing it under multinational control, and sending South Korea’s spent fuel to be reprocessed in a third country. Such alternatives leave some questions unanswered, including what would be done with the resulting plutonium — South Korea, naturally, would like it brought back.

According to an officer from the Korea Institute of Tourism and Culture, Dr Kim Dock Key, the possibility would be given serious consideration to further enhance existing bilateral relationships between Sarawak and Korea.

“Korea now has a direct flight to Kota Kinabalu and we will consider having a direct flight to Sarawak to further promote tourism here.

“Besides that we also intend to enhance cooperation among the industry players in both Sarawak and Korea,” Kim said during a visit to Tourism Minister Datuk Amar Abang Johari Tun Openg here yesterday.

Kim, who led a delegation to meet Abang Johari added that the group was attracted to the tourism products in the state.

He mentioned Bako National Park, which he described as a natural tourism product with beautiful tropical forest and scenic views.

A group of 16 delegates from the Korea Institute of Tourism and Culture joined in the visit; they will also be visiting Sarawak Cultural Village.

Earlier, Abang Johari suggested that Korean aviation companies arrange direct flights to the state to increase tourists’ arrival from the country.

He also said that Sarawak Economic Development Corporation (SEDC) could work together with the Koreans to popularise the game of golf in the state.

“In Sarawak, there are many areas which has the potential to be developed as golf courses,” he said, adding that there were already many golf courses available.