Han Deok-soo Warrant Dismissed.

• The court ruled, “There is room for dispute, and it is difficult to see a risk of evidence destruction or flight.”
• Han Deok-soo (former Prime Minister) is accused of aiding Yoon Seok-yeol (former President) in the illegal declaration of martial law. The special prosecutor believes Han tried to give the martial law a veneer of legality. He allegedly convened a formal Cabinet meeting and, upon discovering flaws in the martial law declaration, drafted and discarded a post-facto declaration.
• Related Link.

Han Duck-soo’s Sin of Omission.

• It means failing to do what must be done. To avoid the sin of omission, he should have laid down on the floor to stop Yoon Seok-yeol. Jeong Hyo-sik (JoongAng Ilbo Social Affairs Editor) pointed out, “We need to examine whether the constitution grants the Prime Minister specific authority and means to restrain the President’s declaration of martial law.” If there is evidence of involvement in martial law, it’s not just a simple omission but a charge of engaging in important duties of rebellion.

What Matters Now.

Pragmatic Diplomacy Succeeds, But No Joint Statement.

• Today’s front pages highlight different points.
• Chosun Ilbo offers a reserved assessment with “A Series of Challenges.”
• JoongAng Ilbo leads with “MASGA to Build U.S. Warships.” Dong-A Ilbo headlines “U.S. Warships to be Built in Korea.” Hankook Ilbo quotes Lee Jae-myung (President) with “MASGA Miracle Becomes Reality.”
• Hankyoreh praises “Pragmatism Succeeded.”
• Dong-A Ilbo notes “Concerns Over Pro-China, Anti-Japan Stance Dissipated.” A defense budget increase was promised, and a visit to Japan was made first, aligning with Trump’s security strategy.
• The interpretation is that “Proactively raising defense spending and leading Korean Peninsula defense is a strategic move to leverage sensitive issues where opinions diverge, like ‘alliance modernization.'”
• Despite follow-up negotiations after the Korea-U.S. summit, no joint document was issued. Disagreements remain over a $350 billion investment.
• Some see the absence of a joint statement as fortunate. Min Jeong-hoon (Professor, Korea National Diplomatic Academy) analyzes, “A joint statement would not have aligned with Korea’s interests, as the powerful U.S. pushes with numbers.”
• The stance that “Security with the U.S., Economy with China is not viable” is also positively viewed as pragmatic diplomacy.
• Min Jeong-hoon evaluates, “By using the North Korea issue as leverage, concerns over Korea being sidelined were dispelled.”
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Practical Negotiations Are Tough.

• The Kyunghyang Shinmun editorial stated, “The domestic manufacturing slump and job losses are urgent issues,” emphasizing, “The worst has been avoided, but the real problems start now.”
• The Hankook Ilbo called it an “unfinished success.” Sensitive issues remain unresolved, leaving a “bitter aftertaste.” The bills for trade and security have yet to arrive.
• Kim Yang-hee (Professor at Daegu University) pointed out, “Even if the tariff issue is settled, they might bring up exchange rates or export controls.” He noted, “If pressured to decouple from China, it could pose significant security threats.”
• Related Link.
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Is There a Link Between Korean Far-Right, MAGA, and the White House?

• The MAGA faction, which has Trump’s ear, is also a group the Lee Jae-myung administration should be wary of.
• Just before the Korea-U.S. summit, Trump posted on Truth Social that a “purge or revolution is happening in Korea,” which is hard to dismiss as a simple misunderstanding or mishap.
• An American congressional activist interviewed by Hankyoreh said, “Korean far-right groups are waging a public opinion war, and it seems to be gaining some traction.”
• Choi Jong-kun (Professor at Yonsei University) warned, “The Korean far-right is connected to the American far-right, and their information channels reach Trump.”
• Related Link.

What About China?

• China’s Global Times criticized Lee Jae-myung’s remarks, calling them “subordinating Korea’s national interest to America’s global strategy” and noted that he is “evading tougher questions with the excuse of having no choice.”
• The Kyunghyang Shinmun editorial pointed out, “We should take the Yoon Suk-yeol administration, which drove Korea-China relations to their worst with a binary logic of ‘the enemy of my friend is my enemy,’ as a lesson.” It is possible to strengthen the alliance with the U.S. while expanding cooperation with China, and this is what practical diplomacy should be.
• Related Link.
• Related Link.

KHNP-Westinghouse Joint Venture Fails.

• Korea Hydro & Nuclear Power officials met with Westinghouse, but talks fell apart. They reportedly made unacceptable demands.
• Concerns arose that they might make rash decisions to avoid criticism of a “50-year humiliation deal.” Some say it’s a relief the deal fell through.
• Related Link.

Deep Dive.

Step-by-Step Constitutional Reform.

• ‘Seonihu-nan’, solve easy problems first, tackle the hard ones later.
• Woo Won-shik (Speaker of the National Assembly) proposed, “Let’s start with the first phase of constitutional reform.”
• The first phase suggests easy agreements like enshrining the spirit of May 18 in the preamble, introducing parliamentary approval for emergency martial law, and transferring the Board of Audit and Inspection to the National Assembly. The goal is a national referendum during next June’s local elections.
• The second phase could include more complex issues like a four-year presidential term with re-election and a runoff voting system.
• Koo Hye-young (Kyunghyang Shinmun editorial writer) emphasized, “The new constitution should be a beacon for a better world, embodying the declaration of citizens who curbed the tyranny of power during the insurrection.”
• Related Link.

Game-Changing Question: “Who Will Be Nominated, Han Dong-hoon or Jeon Han-gil?”.

• Jang Dong-hyuk (People Power Party Leader) said he would nominate Jeon Han-gil (Jeon Han-gil TV CEO), while Kim Moon-soo (former Minister of Employment and Labor) said he would nominate Han Dong-hoon (former People Power Party Leader). This shifted the dynamics.
• Seong Han-yong (Senior Reporter at Hankyoreh) remarked, “This isn’t just a simple mistake by Kim Moon-soo, but an event where fandom politics finally engulfed the People Power Party.”
• Fandom politics has three characteristics.
• First, the initiative in politics is held by the fandom, not the politicians.
• Second, it continuously repeats othering and division, using hatred and anger as its energy source.
• Third, it despises internal enemies more than external ones.
• “Our political future has darkened. The antagonistic coexistence of Jeong Cheong-rae and Jang Dong-hyuk seems likely to continue until next year’s local elections. The outlook is bleak.”
• Related Link.

Will Yoon Visit?

• It’s a promise made by Jang Dong-hyuk, but whether he goes or not, it’s problematic. Kim Yong-tae (People Power Party lawmaker) and Cho Kyung-tae (People Power Party lawmaker) among the reformist lawmakers are strongly opposed.
• Kim Jae-won (People Power Party Supreme Council member) stated, “Keeping a promise is an entirely normal decision.”
• The Kyunghyang Shinmun predicted, “The words said to gain support from the ‘Yoon Again’ faction will come back as a bill to be paid.”
• Related Link.

Another Take.

America’s State Capitalism.

• America’s share of global GDP has fallen to 24%. Meanwhile, China has surged to 17%.
• The U.S. national debt ratio to GDP has surpassed 120%.
• The U.S. government is now Intel’s largest shareholder and takes 15% of Nvidia’s sales in China.
• A White House official told the New York Times, “Intel is not a company that makes pots and pans. This action is justified because it’s crucial to national security.”
• Oh Hyun-hwan (Seoul Economic Daily Editorial Writer) remarked, “We are living in an era of bloc formation and uncertainty, where survival is an individual struggle.”
• Related Link.

Trump vs. the Fed.

• With the trade war wrapping up, he’s now battling the Federal Reserve Board. Lisa Cook (Fed Board Member), whose term runs until 2038, has been dismissed. It’s a signal to strip the central bank’s independence.
• Trump is pressuring the Fed to lower interest rates. Of the 7 Fed board members, Trump has appointed 2 and plans to appoint 2 more. This will increase the number of rate-cut advocates to 4.
• Will it work? Bond yields have surged due to immediate inflation concerns.

Hyundai’s Overseas Production at 52.6%.

• Last year, Hyundai produced 3.92 million units and sold 4.15 million, with overseas production and sales accounting for 53% and 83%, respectively.
• Kia produced 2.78 million units and sold 3.08 million, with overseas production and sales at 45% and 82%.
• Once the U.S. plant is built, the share of overseas production is likely to increase. Overseas production creates no jobs, pays no taxes, and doesn’t contribute to GDP.

From Molten Metal to Cars in the U.S.

• Korea’s exports to the U.S. consist of 35% automobiles and auto parts. These amount to $36.7 billion and $8.9 billion, respectively.
• According to Kim Hyuk-jung (Research Fellow at the Korea Institute for International Economic Policy), if all cars and parts exported to the U.S. were produced locally, 30,000 and 20,000 jobs would be lost, respectively.
• Kim Hyuk-jung pointed out, “It’s an extreme assumption, but concerns that relocating factories could hasten export declines and deindustrialization are not trivial.”
• Heo Jeong (Professor at Sogang University) warned, “Unlike past investments in China, investments in the U.S. tend to reduce domestic investment.”
• Related Link.
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Let’s Consider This Scenario.

• “If our government supports our companies entering your country with policy finance, just turn a blind eye,” saying this would likely be considered insane.
• Imagine a Chinese battery company entering Korea, receiving subsidies from the Chinese government, and dumping prices to the point where Korean battery companies go bankrupt.
• The $350 billion U.S. investment from tariff negotiations can be seen as such a situation. The U.S. accepted the condition of allowing the Korean government to provide policy finance if factories are built in the U.S.
• Detailed conditions are still under discussion, and the positions of the Korean and U.S. governments differ. The Korean government believes it’s best to remain ambiguous for now. According to Kim Yong-beom (Presidential Office Policy Chief), government investment is planned to be less than 5%, with the rest filled by loans and guarantees.
• Kim Hyuk-joong predicted, “It could be a foundation for growth and a protective barrier, but concerns about reduced exports and employment coexist.”

Hyundai’s Robot Factory.

• From October, Atlas will be deployed at the Georgia plant in the U.S. By 2026, the plan is to expand to more hazardous tasks like welding and painting, with a long-term goal of having robots handle 40% of the assembly line. The aim is for one Atlas robot to replace 1.5 humans. According to DS Investment Securities, the Georgia plant requires at least 6,500 workers for 500,000 cars, but with 40% robotization, 1,733 robots could reduce human workers by 2,600. The price of Atlas is unknown, but the four-legged robot Spot costs $74,500, so it might be more expensive. As of last year, the salary of a regular Hyundai worker was 124 million won. This suggests the price of one robot is similar to a worker’s annual salary. Hyundai plans to invest $5 billion to build a robot factory in the U.S. with a capacity of 30,000 units. In 2021, Hyundai acquired an 80% stake in Boston Dynamics for 1 trillion won.

Steel Exports Plunge 25%.

• 50% tariffs are still in effect. The U.S. maintains there’s no room for negotiation.
• The auto tariff rate was agreed at 15%, but it’s still 25% pending Trump’s signature. Concerns arise that this might be additional pressure on Korea.
• Related Link.

Jeong Seong-ho’s Grievance, Min Hyung-bae Says “You’ve Gone Too Far.”.

• Jeong Seong-ho (Minister of Justice) expressed dissatisfaction, saying, “There is no debate in the Democratic Party.”
• Jeong agrees with the principle of separating investigation and prosecution but insists the Serious Crime Investigation Agency should be under the Ministry of Justice. The Democratic Party aims to place it under the Ministry of the Interior and Safety. Jeong pointed out, “There is only the stance that the prosecution must be abolished and authority given to the police.”
• Min Hyung-bae (Chairman of the Democratic Party’s Prosecution Reform Special Committee) remarked, “That’s the minister’s personal opinion,” adding, “I think he’s gone too far.”
• Related Link.

Transforming the Broadcasting Commission.

• They are discussing a plan to reorganize it into the Broadcasting Media Communication Commission. Proposed by Kim Hyun (Democratic Party lawmaker). The plan includes three standing members and four non-standing members.
• Choi Min-hee (Democratic Party lawmaker) proposed a bill to keep the commission as is but increase the number of members to nine.
• Chosun Ilbo pointed out, “If a new organization is created to remove Lee Jin-sook (Chairperson of the Broadcasting Commission), it may violate the guarantee of civil servant status.”
• Related Link.

The Fix.

Second Births Increase.

• Many positive signs. Last year’s births totaled 238,300, a 3.6% rise from 2023.
• Monthly figures also rose for 12 consecutive months.
• The total fertility rate hit a low of 0.75. It was 0.72 in 2023. The average number of children a woman is expected to have in her lifetime, the total fertility rate, was 0.75 (confirmed), up 0.03 from the previous year. In Seoul, it’s 0.58.
• The average age of parents for their first child is 35.4 for fathers and 33.1 for mothers.
• The number of second children increased by 2.0% to 75,900, drawing attention. It had been declining from 152,700 in 2016 but slightly rebounded last year.
• The proportion of multiple births, like twins, rose to 5.7%. This means more than one in 20 newborns is a multiple birth.

Non-Marital Births on the Rise.

• 13,800 children were born out of wedlock, making up 6% of births from non-marital relationships.
• The belief that “you can have children without marriage” increased from 22% in 2008 to 37% last year.
• The OECD average for non-marital births is 42%. South Korea still lacks a system to support non-marital births. The Justice Party proposed the Living Partner Act and Non-Marital Birth Support Act in the 21st National Assembly, but they were discarded.
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The Real Issue: Jeonse.

• How do landlords manage jeonse deposits? In a 1998 survey, 74% invested elsewhere, 10% used it for living expenses. Less than 10% kept it in the bank.
• Landlords profited not from bank interest but by increasing jeonse prices. When a tenant paying 100 million won leaves, they raise it to 110 million won. But what if house prices fall? A reverse jeonse occurs, leading to a ‘jeonse run’ where one collapse triggers another.
• Choi Kyung-ho (author of ‘Perhaps Social Housing’) pointed out, “From the start, jeonse was an unsustainable system, akin to a Ponzi scheme.” He analyzed, “By packaging ‘jeonse’ as a housing ladder only functional when house prices rise, a bomb is deeply embedded in Korean society.” Tenants have become hostages to this bomb.
• Lowering house prices or pressuring landlords to sell homes to return deposits won’t solve it. With no deposits to return and house prices below deposit levels, there’s no solution.
• Choi Kyung-ho sees the orderly transition of jeonse to monthly rent as the only solution. “We need to discuss converting jeonse to monthly rent. Only then can we truly stabilize house prices, making home ownership easier.”
• Related Link.

Paris Baguette Adopts 3-Shift System.

• SPC Group has decided to eliminate night shifts exceeding 8 hours. With a total workforce of 22,000, including 6,500 production workers, they plan to hire an additional 250 employees. This change comes a month after Lee Jae-myung’s visit.
• Working hours will be reduced from 52 to 48 hours per week. They plan to compensate wages by raising the base salary and increasing the holiday pay rate from 50% to 75%.
• The additional hiring and wage compensation will cost 33 billion won annually, which is half of last year’s operating profit.
• The union welcomes this move. A union representative told the Korea Times, “Reducing night work posed a risk of decreased pay,” adding, “Wages have been largely preserved relative to reduced hours, and members’ quality of life is expected to improve.”
• The Hankyoreh offers a more critical view. While night work is reduced, an extra workday has been added. The newly established ‘connecting shift’ requires overnight work from 11 PM to 8 AM.
• Wage compensation is temporary. The holiday pay rate will revert to 50% next year, leading to a decrease in actual wages.
• Related Link.
• Related Link.

Busan Plastic Agreement: 234 Lobbyists.

• There were more lobbyists than the 233-member EU delegation.
• As of 2019, South Korea’s plastic waste per capita was 90.5 kg annually. The OECD average is 42.4 kg.
• According to the UN Environment Programme, global plastic production rose from 2 million tons in 1950 to 400 million tons in 2022. By 2060, it will exceed 1.2 billion tons annually. 99% of plastic is made from fossil fuels, and only 9% is recycled. Last November, the plastic agreement in Busan, South Korea, ended without consensus.

ICYMI.

2.38 Million Views on X.

• It was a Hankyoreh article introducing a paper on Jeju haenyeo’s diving abilities. The article was ordinary, but it exploded on X (Twitter). Retweets and likes each exceeded 10,000.
• The article’s title was “ ‘Humanity’s Strongest’ Diving Ability Jeju Haenyeo… Will Their Legacy Fade in International Academia?” and the introduction on X read as follows.
• “A study has found that Jeju haenyeo possess the most outstanding diving abilities among humans. Their underwater stay ratio surpassed or was similar to that of beavers, sea otters, and New Zealand sea lions.”
• According to the paper ‘Diving behaviour and physiology of the Korean Haenyeo’ published in Current Biology, haenyeo’s average daily dive time was 255 minutes. They dived for an average of 11 seconds and rested for 8.9 seconds between dives. Some haenyeo stayed underwater for up to 10 hours and 36 minutes a day.
• Hankyoreh stated last December, “After discussions on whether to leave or stay on X, which has become like Musk’s property, we decided to stay.” They explained, “In a Korean society dominated by middle-aged men, X has always been the largest platform to hear the thoughts of women in their 20s and 30s.”
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Bill Passed to Ban Phones During Class.

• It’s aimed at reducing smartphone over-dependence. The criteria and methods of restriction are to be set by school regulations.
• Critics call it “excessive legislation” and worry it “eliminates room for autonomous adjustment.”
• Some predict little change. Most schools already have regulations, and 31% allow student autonomy.
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Controversy Over Removing Chessboards in Tapgol Park.

• All 20 chessboards were removed. This was due to constant disputes over gambling and drinking during games.
• Last year, there were 1,470 police reports, averaging four per day. After the boards were removed, reports dropped by 37%.
• A senior citizen interviewed by Chosun Ilbo said, “I don’t have much time left, and now they stop us from playing chess in the park?” He added, “Most of the seniors here are basic welfare recipients with nowhere else to go. What are we supposed to do now?”
• Related Link.

161 + 103 Planes.

• Korean Air has decided to purchase 103 Boeing aircraft. Combined with the existing 161, the total will rise to 264. This is seen as a proactive investment ahead of the merger with Asiana Airlines.
• The deal is worth $36.2 billion (about 50.5 trillion won). Deliveries will be staggered until 2030.
• The models being purchased are 20 B777-9s, 25 B787-10s, 50 B737-10s, and 8 B777-8Fs (freighters).
• Each costs $440 million, $340 million, $140 million, and $520 million respectively. In reality, they receive about a 50% discount.
• Boeing produces 528 planes a year.
• For reference, there are 28,400 aircraft in operation worldwide, with Boeing and Airbus accounting for 90% of them.

SK Telecom’s Day of Reckoning.

• Today, the fine for the hacking incident will be decided. The Personal Information Protection Commission’s decision is due.
• 26.95 million subscriber identification keys were leaked.
• The fine can be up to 3% of the average revenue from the past three years, reaching a maximum of 370 billion won.
• Related Link.

From TACO to PACO.

• Following TACO, now there’s PACO. TACO stands for Trump Always Chickens Out, meaning Trump always backs down. PACO suggests Jerome Powell (Chair of the Federal Reserve) also retreats at crucial moments.
• At the Jackson Hole meeting, Powell stated, “Tariff-induced inflation might be short-lived, but the downside risks to the labor market have increased.” This implies a greater likelihood of a rate cut.
• In Korea, the Bank of Korea’s concerns are deepening.
• Park Sang-hyun (Senior Analyst at IM Securities) pointed out, “If we get too tied up with stabilizing the real estate market, we might miss the timing for economic stimulus.”
• Related Link.

Worth Reading.

More Independence Movements Deserve Recognition.

• “Just as fiercely as the Provisional Government and the Liberation Army fought, so did the Joseon Construction Alliance and the Joseon Independence Alliance. To counter the denigration of independence movements, we need to affirm ‘more independence movements’ rather than clinging to the legitimacy of the Provisional Government. It’s truly regrettable that the debate has been reduced to legal legitimacy amidst the Founding Day controversy.”
• Cho Hyung-geun (sociologist) emphasized, “The theory of inheriting the Provisional Government’s legitimacy cannot be sacred and inviolable.” This was in response to Jung Chung-rae’s criticism that “denying the legitimacy of the Provisional Government is a historical rebellion.” While Syngman Rhee (former president) emphasized the legitimacy of the Provisional Government, Kim Gu opposed it. The point is that history should not be glossed over in the face of ‘powerful’ facts.
• Related Link.

Battle for the 50% Centrist Vote.

• About 46% of voters consider themselves centrists. In the 2022 presidential election, Lee Jae-myung (then Democratic Party candidate) and Yoon Seok-youl (then People Power Party candidate) split them evenly.
• Cho Gwi-dong (Director of Strategy at Political Consulting Min) pointed out, “There is a clear ceiling to the voting power of the democratic-progressive camp.” In this year’s presidential election, the combined vote share of the Democratic Party and the Democratic Labor Party was 50.4%, while in the 2022 election, the Democratic Party and the Justice Party’s combined share was 50.2%.
• Cho Gwi-dong analyzed, “A quarter of Democratic Party supporters can switch to another party at any time,” noting that this is a scale that can determine election outcomes. It suggests the limitations of politics that only focus on the support base.
• “Becoming everyone’s president is difficult, and becoming a faction’s president is easy, but ultimately it’s a path to self-destruction. It’s a lesson to be learned from the significant failures of previous presidents.”
• Related Link.

Pensions for Working Seniors.

• Earn income, and your pension gets cut. Seems unfair at first glance, but it’s complicated.
• Improving pension reductions for working seniors was a pledge by the Lee Jae-myung administration, and indeed, the National Planning Committee announced raising the income threshold from 3.09 million won to 5.09 million won.
• Oh Gun-ho (Co-representative of ‘Welfare State We Create’) called it “a complaint of the wealthy.”
• There was criticism of “reverse discrimination against working seniors,” but the 3.09 million won is after income deductions, actually around 4.11 million won, and on an annual basis, it’s 49.32 million won. As of last year, about 140,000 out of 6 million pension recipients were affected.
• The actual amount reduced is only a few tens of thousands of won, but raising this threshold increases annual pension spending by about 100 billion won.
• Would someone earning 5 million won a month quit their job over a 100,000 won pension cut? Unlikely. In fact, reducing pensions is necessary for fairness. Oh Gun-ho emphasized, “Pension reduction is designed to improve equity and alleviate the burden on future generations.” We shouldn’t be swayed by the complaints of the wealthy.
• Related Link.

The People Power Party: A Political Scandal in Itself.

• Jang Dong-hyuk (People Power Party Leader) emphasized right-wing citizens, not the public.
• Jeong Jae-hyuk (Kyunghyang Shinmun Editorial Writer) assessed it as “abandoning the inclusive party line and declaring a reestablishment as a right-wing ideological party.”
• “There is a vast chasm between the forces that violate the basic rules of social operation and attempt to suffocate the democratic republic, and the common, average perception of Korean society that believes even power struggles should adhere to the minimum consensus. Instead of trying to bridge this chasm, the People Power Party is speeding in the opposite direction. It is a voluntary marginalization and political self-harm, unprecedented in party history.”
• Related Link.