Category: 3. Business

SEOSAN, South Korea — Hwang Seong-yeol stood at the edge of a golden field, watching nervously as a combine harvester crawled through his rice, churning up mud and stalks. Its steady hum filled the damp autumn air as grain poured into a truck waiting at the other end of the muddy paddy.

It was the final day of what Hwang said was one of his toughest seasons in three decades of farming. He and other farmers feel helpless against increasingly erratic weather that they link to climate change and damage to their crops. It has complicated their work and cast uncertainty over their futures.

Hwang is one of five South Korean farmers who recently sued the state utility Korea Electric Power Corporation and its power-generating subsidiaries, alleging that their reliance on coal and other fossil fuels has accelerated climate change and damaged their crops.

The lawsuit raises questions about whether power companies’ role in driving climate change, and the resulting agricultural losses, can be quantified. It is the first of its kind in South Korea, said Yeny Kim, a lawyer with the Seoul-based nonprofit Solutions for Our Climate, who is handling the case.

The case underscores the challenges South Korea, a manufacturing power that industrialized long after the Western nations now pressuring others to abandon fossil fuels, faces in transitioning to cleaner energy.

Hwang’s fields are on a reclaimed coastal plain along South Korea’s western sea, where glimmering waterways crisscross dark, rich soil and flocks of migratory geese drift overhead, moving like a giant, living quilt.

A remarkably rainy September and October followed a bitterly cold spring that stunted plant growth. Summer floods caused further damage before the wet autumn bred fungal disease.

Hwang would have preferred to harvest in drier weather but had to do so sooner as relentless rains pushed rice stalks into the soil, causing the ripe grains to sprout. That day in late October was only the second dry day after 18 straight days of rain.

“It’s really unsettling – we know how much rice we should normally get from 30,000 pyeong (25 acres) of land, but the yield has been steadily declining every year,” said Hwang, who expects this year’s harvest to be 20% to 25% below normal.

“We began to question why it’s always the farmers — who haven’t done anything wrong — that end up suffering the consequences of the climate crisis. Shouldn’t we be demanding something from those who are actually causing it?”

Farmers are “inherently vulnerable” to climate change, said Kim, the lawyer.

In an annual climate report in April, South Korea’s government detailed how a year of extreme weather events in 2024, the country’s hottest year ever, triggered a series of “agricultural disasters” of heavy summer rains that destroyed thousands of hectares (acres) of cropland, followed by weeks of intense heat that wrecked still more crops, mostly rice.

Kim and her colleagues decided to file the lawsuit, which represents plaintiffs from across South Korea, after speaking with Hwang and others at farmers markets.

They say KEPCO, which holds a monopoly on electricity transmission and fully owns its subsidiaries, should bear some blame for the destabilized weather, citing what they say are excessive carbon emissions and a lagging transition to renewable energy.

From 2011-2022, the companies produced about 30% of South Korea’s greenhouse gas emissions and roughly 0.4% of global emissions, based on Kim’s analysis of publicly available data.

“Therefore, they should also bear 0.4% of the responsibility for the farmers’ losses,” Kim said.

The lawsuit seeks initial damage claims of 5 million won ($3,400) per client, an amount likely to be adjusted as the case proceeds. The plaintiffs are also symbolically seeking 2,035 won ($1.4) each to urge the government to phase out coal power plants by 2035, ahead of its 2040 target.

Renewable energy accounted for only 10.5% of the national energy mix in 2024, and the five KEPCO subsidiaries relied on coal for more than 71% of the electricity they produced that year, according to government data.

KEPCO told The Associated Press it considers carbon reduction a key responsibility, citing its goal of cutting emissions 40% by 2030 from 2018 levels. But it declined to comment further on the lawsuit, saying it “cannot share information that could influence the verdict.”

Experts say mounting debt, now at over 200 trillion won ($137 billion), that accumulated over decades of government policies that kept electricity rates low for households and industries, limits the utility’s ability to expand and modernize the power grid or invest in renewable energy.

Yun Sun-Jin, a professor at Seoul National University, said the lawsuit has symbolic value but questioned whether blame could fall solely on KEPCO, given that everyone benefits from its cheap electricity.

It would be difficult to prove the utility directly caused farm losses, when climate change is a “global problem,” she said.

It does draw attention to South Korea’s need for a more effective approach to renewable energy, Yun said, including deregulating solar investments, expanding sources such as offshore wind, and ending KEPCO’s monopoly over electricity transmission to encourage other competitors with diverse technologies.

South Korea is expected to reach its target of 32.95% renewable energy by around 2038 — far slower than the 33.49% average in 2023 among developed economies in the Organization for Economic Cooperation and Development, according to the Institute for Energy Economics and Financial Analysis.

Some experts, including Yun, warn that South Korea’s slow shift to renewable energy could hinder its ambitions in advanced semiconductors and artificial intelligence, as its tech giants face global pressure to operate on clean power.

“Climate change and carbon neutrality are not just environmental concerns — they are economic issues, ultimately about jobs and our survival,” Yun said.

The impact of extreme weather resulting from climate change is far reaching in South Korea.

Farmers now face higher costs and must use more labor to produce the same or lower yields.

Ma Yong-un, an apple farmer in the southeastern town of Hamyang, said he is using more pesticides as pests and diseases become harder to control due to prolonged heat and humidity. The apples that thrived in cooler weather during his father’s days are less plentiful and tasty, he said.

From tangerine farmers on Jeju island to strawberry growers in Sancheong to the southeast, farmers are trying to devise ways to survive.

For the first time since he began farming in 2011, Ma coated all the fruit on his 2,200 trees with a mixture of copper sulfate and lime to prevent fungal infections and skin damage from intense sunlight.

He began to think seriously about climate change in 2018, when a heavy April snowstorm damaged flower buds, leading to one of his worst harvests. Farming is becoming harder each year and he constantly wonders how much longer he can carry on.

“I think about that every day,” said Ma, who is raising two teenage boys with his wife. “The biggest concern is my children.”

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China’s house prices have declined by the most in a year, while industrial production and investment figures both missed expectations, underlining pressure on policymakers to maintain growth in the world’s second-largest economy.

New home prices fell 0.45 per cent in October from the previous month, the most since October last year and greater than a 0.4 per cent decline in September, according to data released by China’s National Bureau of Statistics on Friday.

Industrial production rose 4.9 per cent from a year earlier, trailing a forecast of 5.5 per cent in an analyst poll by Reuters and the 6.5 per cent growth in September. Retail sales in October expanded 2.9 per cent, better than expectations of 2.8 per cent in the Reuters poll but down from 3 per cent the previous month. Both were the weakest readings since August 2024.

Fixed asset investment, meanwhile, continued to fall, recording a 1.7 per cent decline year to date on a year earlier year, worse than forecasts of a 0.8 per cent drop and a 0.5 per cent contraction to September.

Fu Linghui, spokesperson of the National Bureau of Statistics, said that while the overall economy was operating “relatively smoothly”, with progress in developing new industries, there were “many unstable and uncertain factors in the external environment”.

“There is significant pressure to adjust domestic economic structure, which pose several challenges to maintaining stable economic operation,” Fu said.

China is grappling with what economists call a “two-speed” economy, with trade and exports broadly holding up growth despite US President Donald Trump’s trade war, while the domestic economy suffers from weak demand and a prolonged bout of deflation.

Authorities announced a pivot to bolstering domestic demand more than a year ago, which has included easing monetary policy, issuing stimulus bonds and unveiling programmes to support households.

But those efforts have yet to significantly revitalise consumption, which has been hit by a years-long slowdown in the real estate market that has weighing on household spending and consumer confidence.

The NBS said the year-to-date decline in property development investment had deepened from 13.9 per cent to 14.7 year on year by the end of October.

“Today’s data signals the ongoing weakness in housing investment and developer sentiment,” Yuhan Zhang, principal economist at the Conference Board said in a new report. “The second-hand market, in particular, reflects structural oversupply and weak consumer confidence.”

He said China had modest and uneven growth in fixed-asset investment in manufacturing, led by autos and transport equipment.

“We will continue to see policy-directed investment in infrastructure, advanced manufacturing, and industrial upgrading,” Zhang said.

Additional contributions by Wenjie Ding in Beijing. Data visualisation by Haohsiang Ko in Hong Kong

A British court will decide on Friday whether Australian mining giant BHP is liable for one of Brazil’s worst environmental disasters, potentially paving the way for billions of pounds in compensation.

Good morning. The Indian government has classified the Delhi car explosion as a “terror incident perpetrated by anti-national forces”. The death toll from Monday’s explosion is now 13, according to local media. Tensions in the region are high, with Pakistan on Tuesday accusing India of pursuing “state terrorism” after a suicide car bombing killed at least 12 people outside a judicial complex in its capital Islamabad. India has denied any involvement. 

Meanwhile, the talk is that a trade deal with the US will be announced soon. Donald Trump, who is now fighting to control his Maga base after the revelations in the Epstein emails, has indicated this a couple of times this week too. In fact the US president defended the use of H1B visas on Wednesday, saying the US “needs certain talents”. Is the cycle turning?

Results of the polls in Bihar will be out today, and exit polls seem to strongly suggest a third term for Nitish Kumar. 

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Expense report

It’s that time of the year again, when we hear the first whispers of a phrase that gets India’s businesses and consumers excited: the Union budget. This week, finance minister Nirmala Sitharaman kicked off preparations for next year’s fiscal event with a consultation with leading economists. And that meeting brought forth that other term that should incite excitement, but has of late been rather contentious — capital expenditure.

Experts from private banks and other financial institutions used the meeting with Sitharaman to push for an increase in government capex, which they think will generate employment and improve general economic wellbeing. Government capex is expected to stay around 5 per cent of GDP this fiscal year, Emkay Research estimates, continuing the marginally downward trajectory in the past two years. In her budget in February this year, Sitharaman had increased the allocation of government capex by 10 per cent from last year, earmarking $129bn for these projects. 

It is ironic that it is now the private sector that is urging the government to increase spending. In the past few years the finance ministry has been the one demanding that the private sector increase its capex, with Sitharaman using several public appearances to scold industry for this lapse. But the results have been a mixed bag. A significant area of expansion of private capital this year was expected to be in manufacturing for exports, specifically as a “China plus one” strategy for global companies to de-risk their supply chains. But this approach is no longer viable after Trump’s 50 per cent tariffs on India. Even if a deal is announced soon, the damage to investor confidence will take a while to repair.

However, there is some good news on private capex being invested in projects for the domestic market. A report from the Reserve Bank of India projects this to grow by 22 per cent this fiscal year, on the back of the recent interest rate cut and improving economic conditions. Much of this money is being invested in incremental boosts to capacity in renewable energy, roads and other projects. 

Capex is one of the most significant factors for India’s economic health. Public capex is especially crucial, with every dollar spent having a multiplier effect of 2.4 to 2.6 times on the economy. The question now is whether private capex will step in so that the government can ease its spending. This week’s meeting suggests it is unlikely. Even if private investment does go up, it is growing from a low base; the government should not take it as a signal that it can take its foot off the pedal early.

Do you think there is enough private capital expenditure now? Hit reply or email me at indiabrief@ft.com

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Road hazard

Indian roads are so dangerous that they account for the highest number of accident-related fatalities in the world. According to data shared by Nitin Gadkari, the minister in charge of road transport and highways, 480,000 accidents took place on Indian roads in 2024, killing 172,000 people. More than 35,000 of these fatalities were pedestrians, while 54,000 deaths were due to lack of helmets and 16,000 were people not wearing seatbelts. Road accidents are the single largest killer of young men aged between 15 and 29, accounting for 20 per cent of all deaths for that age group.

These are grim statistics. What is worse is that there does not seem to be a solution in sight. The minister himself remarked that some of this is because of the poor construction of roads, saying hundreds of deaths were caused because of civil engineering mistakes and pot holes, before adding that he was only responsible for building highways. 

The poor quality of roads is also a serious economic problem. India is losing 3 per cent of GDP annually through road accidents, according to Gadkari, although I am not sure how he arrived at this number. Nevertheless, it is safe to say that a poorly designed network of roads riddled with bottlenecks would multiply commute time and result in millions of man-hours lost. During the monsoons, streets are flooded in most Indian cities. Potholed roads are so common across all of India that some of them have now become internet memes. 

This administration takes incredible pride in how it has expanded road connectivity across the country. Some 55,000 kilometres of new national highways have been built in the past 11 years, according to government data. But just building roads is not enough — attention has to be paid to how they are engineered and subsequently maintained. If India’s ambition is to be a global economic powerhouse, it has to have high-quality infrastructure as well as valuing human lives. Having the most dangerous road network in the world is a terrible reputation. While it is great that the minister is willing to talk about this in public, his office should also be more proactive in ensuring this is rectified quickly. 

What has been your experience of Indian roads? Hit reply or email me at indiabrief@ft.com

Go figure

India’s inflation fell to a record low in October. Here is a look at how the consumer price index performed.

Read, hear, watch

I am making my way through Granta’s autumn edition that is dedicated to India. (Disclosure — the publishers sent me a copy). I really enjoyed the opening piece — a short story by the Kannada writer Vivek Shanbhag (of Ghachar Ghochar fame) translated by Srinath Perur. I am about halfway through the book, and the other pieces have not really blown me away so far. 

It’s been a busy couple of weeks in London, but I have managed to watch 10 minutes of Platonic on Apple TV every night. I didn’t care for it much in the beginning, but warmed up to it after the third episode. (I could totally identify with the situation, since I spend quite a bit of time getting up to no good with my platonic best friend too.)

Buzzer round

Which organisation is going to award a “peace prize” next month in Washington? Hint — its main area of expertise in peace negotiations involves yellow and red cards.

Send your answer to indiabrief@ft.com and check Tuesday’s newsletter to see if you were the first one to get it right.

Your view

On Tuesday, I wrote about the government’s desire to create “big banks”, potentially through more mergers and foreign investment. India Brief reader Ajay Doshi had this to say:

“Maybe the first step would be for the state to not get involved in commercial banks. They should privatise completely and then let the market work out what is best for its consumers, whoever and wherever they are. Regulation is necessary, but there should be absolutely no government interference. No favours either.”

(Edited for length and clarity)

Quick answer

On Tuesday we asked if you think India will be able to fix the air pollution problem. Here are the results. Seventy per cent of you don’t think it will. (Also, linking results to last week’s poll on Bihar elections here, since results will be out today.)

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Thank you for reading. India Business Briefing is edited by Tee Zhuo. Please send feedback, suggestions (and gossip) to indiabrief@ft.com.