Hand Over Shares for Subsidies.

• This is Donald Trump’s (U.S. President) demand.
• Howard Lutnick (U.S. Secretary of Commerce) told CNN that it’s about changing the funds the Biden administration intended to give into equity investments, which he called “a much wiser approach from the taxpayers’ perspective.”
• Samsung Electronics decided to build a factory in Texas and was set to receive $4.745 billion in subsidies from the U.S. government. Converted to equity, that’s about 1.56%, comparable to Lee Jae-yong’s (Samsung Electronics Chairman) 1.65% stake.
• SK Hynix also plans to build a factory in Indiana and is set to receive $458 million.
• Lee Jong-hwan (Professor at Sangmyung University) assessed that “the U.S. government’s true intention to exert influence over Samsung Electronics and TSMC has been revealed.” An industry insider predicted, “If they refuse, it could provide a pretext to break the subsidy promise.”
• The Dong-A Ilbo editorial pointed out, “Our companies and government must clearly express their refusal and prepare for the aftermath that is likely to follow.”
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Can America Make Nuclear Great Again?

• Chosun Ilbo speculates that K-nuclear could become the next MASGA.
• Korea Hydro & Nuclear Power and Westinghouse are discussing forming a joint venture to enter the U.S. nuclear market. Conveniently, Trump has declared a ‘nuclear renaissance.’ The plan is to quadruple nuclear capacity by 2050.
• Westinghouse has the core technology, while Korea has the design and construction expertise.
• Controversy arose when it was revealed that Korea Hydro & Nuclear Power agreed to pay Westinghouse $650 million in royalties per unit over the next 50 years for the Czech nuclear contract signed in January. However, entering the U.S. market could turn the tables.
• Related Link.

What Matters Now.

You Can Tame Housing Prices with Taxes.

• This is according to Kim Yong-beom (Presidential Office Policy Chief). Originally, Lee Jae-myung (President) had stated during his candidacy, “We won’t use taxes to control housing prices.”
• Kim Yong-beom explained, “It wasn’t a promise or pledge, just a remark,” adding, “Perhaps he meant that we hope not to reach a situation where we have to use taxes to control housing prices.”
• According to the Korea Real Estate Board, last month, apartment prices in Seoul rose by 1.1%. The rate of increase has slowed, but prices are still climbing. There’s also the matter of securing tax revenue. In the first half of this year alone, the fiscal deficit exceeded 94 trillion won.
• Related Link.

Is Lee Jae-myung’s Rally Over?

• Foreign investors are pulling out, making the KOSPI 5000 target seem like a distant dream. Unlike Japan and Vietnam, which are hitting record highs, only Korea is in the red.
• There’s talk that the honeymoon rally of the Lee Jae-myung administration didn’t even last two months. It’s down about 4% from its peak.
• There’s significant discontent with the tax reform plan, and outlets like Chosun Ilbo are using the Yellow Envelope Law to attack the government.

PBR at 1.0.

• Gu Yoon-chul (Minister of Strategy and Finance) faced criticism for not knowing PBR (Price-to-Book Ratio).
• With stock prices already declining, investors’ dissatisfaction is mounting. PBR is an indicator of market capitalization relative to assets. KOSPI is at 1.0, Taiwan at 2.4, and Japan around 1.6.
• A PBR of 1.0 means that selling all assets at current stock prices would just break even. It implies no reflection of growth potential or future value.
• Gu Yoon-chul, hearing a whisper of “10, 10” from behind, answered “around 10,” likely confusing it with PER (Price-to-Earnings Ratio). It’s alarming that he doesn’t grasp a metric frequently cited as evidence of the Korean stock market’s undervaluation.

Deep Dive.

Drop the Biden-Nallimyeon Lawsuit.

• “There’s insufficient evidence to confirm ‘nallimyeon,’ and it’s possible it was ‘Biden.’”
• The first trial ordered a correction, but the appellate court has decided to force a withdrawal of the lawsuit.
• In the decision, it stated, “The plaintiff (government) seems to acknowledge the mistake and shows no intent to actively pursue the lawsuit,” adding, “The truth and evaluation of this report should be addressed through public criticism and rebuttal rather than judicial judgment.”

Does It Make Sense to Need U.S. Permission for Nuclear Fuel Reprocessing?

• The revision of the nuclear agreement is said to be on the agenda for the Korea-U.S. summit.
• South Korea’s nuclear industry ranks fifth in the world. Yet, under the Korea-U.S. nuclear agreement, uranium enrichment and spent nuclear fuel reprocessing require U.S. consent. The agreement still has 10 years left before it expires.
• Lee Chun-geun (Research Fellow at the Korea Institute of S&T Evaluation and Planning) warned, “If mishandled, it could cause international repercussions and severely damage the nuclear industry.”
• Related Link.

Ethylene Production Must Drop by 25%.

• The government is pressuring companies to cut naphtha cracking capacity. Support comes only with restructuring.
• South Korea consumes 8 to 9 million tons of ethylene annually.
• Last year, LG Chem, Lotte Chemical, and five others produced 12.1 million tons. The government’s message? Export is tough, so scale back to domestic levels.
• China’s ethylene output surged from 22.19 million tons in 2016 to 72.25 million tons. Competing on price is a lost cause.
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Three Scenarios for the People Power Party Convention.

• First, there is a possibility that Kim Moon-soo (former Minister of Employment and Labor) could win outright as party leader, but prevailing opinion suggests a majority vote is unlikely.
• Second, anti-impeachment candidates might both make it to the runoff. A Gallup Korea poll of People Power Party supporters showed Kim Moon-soo and Jang Dong-hyuk (People Power Party lawmaker) securing 46% and 21%, respectively. Support for Jang Dong-hyuk is rising among hardline conservatives.
• Third, a pro-impeachment versus anti-impeachment runoff is possible. The unification of Ahn Cheol-soo (People Power Party lawmaker) and Cho Kyung-tae (People Power Party lawmaker) has fallen through. Speculation arises over whom Han Dong-hoon (former People Power Party leader) will endorse as a potential game-changer.
• Voting by the electoral college (80%) and public opinion poll (20%) is underway over two days, the 20th and 21st. The party leader will be elected at the convention tomorrow (22nd).
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How Could Han Dong-hoon Do That?

• Kim Geon-hee reportedly told Shin Pyeong (lawyer), “If he hadn’t betrayed, endless glory would have awaited him.”
• Lee Jin-young (Dong-a Ilbo editorial writer) analyzed, “Kim Geon-hee’s prison attack on Han Dong-hoon is meant to influence the party convention.” It’s said to be an attempt to bolster the anti-Yoon faction.
• Kim Geon-hee was also suspected of hindering Han Dong-hoon’s election by ignoring his texts during last July’s party convention.
• She also told Shin Pyeong, “Wouldn’t my death open a path for my husband?” “Can’t the President release me and let me stay here?” Neither is feasible nor meaningful.
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Another Take.

Send Ahn Hak-seop to Joseon.

• “I want to return to my homeland, the Democratic People’s Republic of Korea.”
• Ahn Hak-seop is an unconverted long-term prisoner. Captured in 1953 as a North Korean People’s Army squad leader, he was tried as a spy, not a prisoner of war. Sentenced to life imprisonment, he was released in 1995 after 42 years and 2 months, thanks to a Liberation Day special pardon.
• According to the Geneva Convention, prisoners of war must be repatriated immediately after hostilities cease. Ahn refused repatriation in 2000 when others like Lee In-mo were sent back, but he has recently changed his mind.
• Related Link.

Why is Kim Yo-jong Acting This Way?

• Kim Yo-jong (Vice Director of the Workers’ Party of Korea) has issued statements three times.
• She dismissed reconciliation attempts like halting loudspeaker broadcasts as “delusions and pipe dreams” and mere “pretenses of extending a hand of reconciliation.” She also criticized, saying, “Lee Jae-myung is not the person to change the course of history.”
• Some suggest this reflects anxiety over the possibility of friendly nations like China and Russia supporting South Korea.
• Related Link.

Three Proposals for Restructuring the Broadcasting Commission.

• First, there’s a plan to split the Media Content Department and the Public Broadcasting Commission. This would place a consensus-based administrative committee under a single-headed ministry.
• Second, there’s a proposal to establish the Media Content Department and the Public Media Commission separately. This involves having a single-headed ministry and a consensus-based committee separately.
• Third, there’s a proposal to expand the Broadcasting and Communications Commission. It suggests merging the broadcasting promotion policy tasks from the Ministry of Science and ICT.
• The idea of creating a single-headed ministry arises from the belief that promoting the media content industry is as crucial as the independence of public broadcasting.
• Jin-soon Lee (Director of the Citizens’ Coalition for Democratic Media, Adjunct Professor at Sungkonghoe University) pointed out, “Placing the Broadcasting Commission under a single-headed ministry is a very dangerous idea that could nullify all efforts made for press freedom and independence.”

Why the Chaotic Broadcasting Commission Needs Fixing.

• Choi Young-mook (Professor at Sungkonghoe University) emphasized, “The primary task is to restore and normalize the consensus-based body that encompasses regulation and promotion.”
• The Audiovisual Media Communications Commission proposed by Kim Hyun (Democratic Party lawmaker) was discussed during the Moon Jae-in administration but stalled and was sidelined under the Yoon Suk-yeol administration. The stance is to integrate the divided regulation and promotion functions of the Ministry of Culture, Sports and Tourism, the Ministry of Science and ICT, and the Broadcasting Commission.
• The plan is to proceed in stages: first, the three broadcasting laws; second, the normalization of the Broadcasting Commission; third, the establishment of a Media Development Committee.
• The issue of the president delaying the appointment of standing committee members has also been addressed. A clause was added stating that if there are no disqualifications, the president must appoint within 14 days of the National Assembly’s recommendation, or it will be considered appointed after 14 days.
• Choi Min-hee (Democratic Party lawmaker) stressed, “Let me be clear, we are not considering a single-member system at all.”
• “A single-member system cannot be the solution. The Ministry of Science and ICT has ruined things for 10 years. It’s not just the Broadcasting Commission that’s been messed up. Are we going to abolish everything and go for a single-member system? Just because there are issues with the committee structure, are we going to abolish the National Human Rights Commission or the Anti-Corruption and Civil Rights Commission and turn them into single-member departments?”
• Related Link.

House Poor Elderly with a 1.5 Billion Won Apartment.

• A case of a 69-year-old introduced by the JoongAng Ilbo. He owns a 1.5 billion won apartment but has no income other than a 2.5 million won monthly national pension. With a 140 million won loan, he pays 1.5 million won in principal and interest, leaving less than 700,000 won after utilities and maintenance fees.
• This is relatively better off. Only 46% of elderly receive a national pension. The average as of April is 680,000 won.
• According to Statistics Korea, the average asset of those over 65 is 515.17 million won per household. Real estate for 5.99 million households totals 2,474 trillion won.
• If the official price exceeds 820 million won, basic pension is not available. If the market price is 1 billion won, health insurance premiums exceed 120,000 won. There are 2.13 million households with zero income but paying health insurance.
• Even if they try to downsize, there’s talk that nothing is left after paying capital gains and acquisition taxes.
• There are about 130,000 subscribers to reverse mortgages, receiving monthly cash by pledging their homes. Lee Jae-guk (Professor at Korea Institute of Finance) noted, “As life expectancy increases, there’s a strong tendency to hold onto real estate as the last resort.” Jung Yoon-young (Research Fellow at Hana Institute of Finance) pointed out, “There’s a need to activate downsizing by providing tax benefits on acquisition taxes when reducing housing.”
• Related Link.

The Fix.

Will Korail and SR Merge?

• It was Lee Jae-myung’s presidential campaign promise. Many criticized that SRT operates mainly on lucrative routes, reducing Korail’s profitability.
• As of last year, Korail recorded an operating loss of 111.4 billion won, while SR posted an operating profit of 9.5 billion won.
• They have been operating separately since 2013.
• The Ministry of Land, Infrastructure and Transport held a meeting to begin discussions on integration.

Energy Demand Up 98%, Transmission Facilities Up 26%.

• It’s a change over 20 years. Expanding the grid is an urgent task. The energy highway is also Lee Jae-myung’s presidential pledge.
• The Hankyoreh pointed out that the centralized energy structure must fundamentally shift to a regional, decentralized one. Wherever transmission towers are built, like in Miryang, residents fiercely oppose, yet there are no incentives.
• Lee Jae-hyuk (Research Fellow, Korea Environment Institute) noted, “The problem arises because Korea Electric Power Corporation plans and constructs transmission lines, with no separate supervisory body.”
• Kim Byung-kwon (Director, Green Transition Institute) emphasized, “We must provide incentives to relocating companies while simultaneously enforcing regulations to prevent power-hungry factories or data centers in the capital region.”
• There’s also a call to establish the principle of local production and local consumption.
• Related Link.

Experiment of the Solid Housing Cooperative.

• A new model where victims of rental fraud banded together to recover their losses.
• Two years ago, 21 people were defrauded of 2.9 billion won.
• The Korea Social Housing Association stepped in, gathered the victims to form a cooperative, and transferred housing ownership to convert it into semi-jeonse (a mix of deposit and monthly rent). They used the rental income to compensate for the losses.
• Thanks to low-interest loans, they were able to return 94% of the losses to members within two years. The cooperative’s 21 officetels will be operated as social housing, with profits reinvested into the community.
• Choi Kyung-ho (Auditor of the Solid Housing Cooperative) stated, “As citizens have directly attempted and verified the cooperative model, the government should consider expanding it.”

Greenhouse Gas Total Down, Industry Up.

• Last year, South Korea’s greenhouse gas emissions were 691.58 million tons (provisional), a mere 2% decrease from the previous year.
• This was due to a 9.6% reduction in coal power and increases of 8.6% and 4.6% in renewable energy and nuclear power, respectively.
• Industrial emissions, however, rose by 0.5%.
• Choi Min-ji (Director of the Greenhouse Gas Inventory and Research Center) stated, “The unit improvement index, which indicates efforts to reduce greenhouse gases, has slightly worsened or shown little to no improvement.”
• At this rate, achieving the national reduction target of cutting 40% of 2018 emissions by 2030 seems challenging. Last year, 690 million tons were emitted, but in five years, it needs to be reduced to less than 440 million tons.
• Related Link.

No Safety Regulations for Workers on Tracks.

• Work is divided into blocked operations, where trains stop, and routine operations, where they don’t. If the work location is more than 2 meters from the track, it’s considered routine, but there are no regulations for when workers are moving. Moving outside the 2-meter boundary might be routine, but workers often walk on the tracks, and maintaining a safe distance is usually difficult. The train accident in Cheongdo County, which resulted in 7 casualties, is similar to the 2019 Miryang Station accident. Warnings are useless if not heard in time.
• Related Link.

ICYMI.

10.11 Million MVNO Subscribers.

• As of the end of June. An increase of 810,000 lines in a year.
• No difference in call quality, but 30-50% cheaper.
• With the start of eSIM services, you can keep your existing number while using dual numbers, and remote activation is now possible.
• Related Link.

90,000 Stung by Bees in Five Years.

• It’s increasing every year.
• 27% of incidents occur in August.
• Strongly scented perfumes, cosmetics, and sweet drinks can attract bees.

Contextual Understanding Matters.

• As communication speeds up, the ability to read context becomes crucial. Ludwig Wittgenstein (Philosopher) emphasized, “The meaning of a word lies in its use within context.”
• Park Yong-hoo (Perspective Designer) suggested three habits for contextual understanding in the AI era.
• First, when listening to a conversation, grasp the flow of sentences and the situation before focusing on specific words.
• Second, avoid interpreting only in your favor and question the context in which the words were spoken.
• Third, make an effort to read the true message of the other person through contextual interpretation.
• Related Link.

Worth Reading.

Ju Ho-min’s Secret Recording Must Be Acknowledged.

• Opinions are divided, but Cha Sung-an (Professor at Seoul City University) sees it as a realistic defense measure for parents of autistic children.
• Ju Ho-min (webtoon artist), suspecting child abuse, placed a recorder in his child’s bag. The court ruled the special school teacher guilty in the first trial, but not guilty in the second.
• According to the Communication Privacy Protection Act, recordings by the involved party are legal and admissible as evidence. The victim’s parents are not considered involved parties, so their recordings cannot be used as evidence. However, autistic children cannot defend themselves. For parents, recording is the only way to prove suspected abuse.
• Cha Sung-an pointed out, “This ruling’s impact on other abusive acts must be considered.” If evidence admissibility is judged rigidly, it becomes difficult to punish abuse in nursing homes or daycare centers. Cha suggested, “The Supreme Court should refer this case to a full bench public hearing.”

If I Do It, It Works.

• This refers to Lee Jae-myung’s style. Choi Moon-sun (Korea Times Editorial Writer) pointed out, “One cannot do everything alone.” The president’s stamina and abilities are not infinite.
• The intention to be the people’s problem solver is admirable, but the advice is that “the president should focus on bigger politics.”
• “When something happens to someone somewhere, it’s the fate of the comic hero ‘Jjanga’ to surely appear. It’s not the president’s job. We hope for a country where people don’t need to seek the president out of frustration and injustice, rather than a president who listens to such grievances.”
• Related Link.

500 Million Won Director.

• Lee Chan-jin (Financial Supervisory Service Director) is a close friend of Lee Jae-myung. He was Lee Jae-myung’s lawyer in the North Korea remittance case but has no experience in finance.
• He is called the ‘500 Million Won Director’ due to records showing he lent 500 million won to Lee Jae-myung.
• Lim Ji-sun (Kyunghyang Shinmun Economic Editor) remarked, “Lee Chan-jin is the drill sergeant of the financial sector sent by Lee Jae-myung.”
• In a financial world where the term ‘government-controlled finance’ doesn’t feel out of place, their relationship is ripe for controversy.
• Related Link.

Conservative Media’s Take on Democratic Party’s 20-Year Rule.

• This indicates a significant sense of crisis. Those in their 40s and 50s, who experienced democratization and the Roh Moo-hyun wave, make up 36% of voters. The demographic structure favors the Democratic Party.
• Lee Hyun-sang (JoongAng Ilbo Editorial Writer) believes the Democratic Party cannot be completely at ease.
• The president’s approval rating is rapidly declining, and the party-government messages are disjointed. Lee warns, “Arrogance has always been a precursor to downfall.” “The U.S. Democratic Party was trapped in an ‘elite arrogance’ image and lost to the maverick Trump. Japan’s Liberal Democratic Party once lost power due to a stagnant image and corruption scandals.”
• Though framed as a warning, the content is closer to a curse, with underlying hopes.
• “If the opposition’s incompetence and regression can be an opportunity for the ruling party, the ruling party’s arrogance can be a lifeline for the collapsing opposition,” he predicted.
• Related Link.

Why Demonizing Kim Keon-hee Is Opposed.

• “Demonizing Kim Keon-hee is exactly what Han Duck-soo (former Prime Minister), Won Hee-ryong (former Minister of Land, Infrastructure and Transport), and the businessmen who bribed her desperately want.” This is the analysis of Oh Chang-min (Kyunghyang Shinmun editorial writer).
• Though Kim Keon-hee’s temperament, vanity, and greed may have sparked the national scandal, they are neither the key variables nor the root causes.
• Demonizing Kim Keon-hee obscures the structure of the crime. While she is central, blaming her alone is misguided.
• We must rationally examine the entire structure of Kim Keon-hee’s corruption. She was not a nobody. The prosecution concealed evidence of her crimes, the Board of Audit and Inspection shielded her, and the Anti-Corruption and Civil Rights Commission granted her immunity. If Kim Ye-seong (steward) was a private servant, Han Duck-soo and Won Hee-ryong played the roles of public servants.
• “The Dior bag, as Park Jang-beom (KBS President) said, was just a drop in the bucket.”
• Oh Chang-min views Yoon Seok-yeol and the People Power Party as accomplices of Kim Keon-hee. The genres are diverse, and the cast is large, including the Yangpyeong Expressway, Sambo Construction stock manipulation, official residence construction corruption, Unification Church lobbying, nomination interference, and the Judicial Affairs Gate. The investigation has only just begun.
• Related Link.