From Isolated Outcast to Global Player.

• Kim Jong-un (North Korean State Affairs Commissioner)’s status has shifted. Yesterday, he stood shoulder-to-shoulder with Xi Jinping (Chinese President) and Vladimir Putin (Russian President) at the Chinese National Day military parade.
• Bloomberg assessed, “North Korea is leveraging its position in the shifting international order amid US-China competition and trade wars.” The analysis added, “If Trump requests renewed dialogue, it will be in a more advantageous position.”
• CNN noted, “The defining moment was not advanced weapons but the display of solidarity between Xi, Putin, and Kim Jong-un against the US and its allies.” It evaluated this as “a bloc of illiberal leaders determined to defy Western rules and tilt the global balance of power in their favor.”
• Chosun Ilbo assessed, “His status has risen above that of Kim Il-sung 66 years ago.”
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“A Mighty Eastern Wind Shakes the World.”.

• Dongfeng haotang weizhen xuanyu (East wind surges, awe shakes the cosmos).
• Yesterday’s military parade showcased long-range cruise missiles, hypersonic missiles, strategic bombers, submarine-launched ballistic missiles, mobile intercontinental ballistic missiles, and more. Stealth drones and unmanned submarines also drew attention—weapons capable of striking the United States.
• Xi Jinping (Chinese President) declared, “The Chinese nation is a great people standing firmly on their own feet.” Though commemorating an 80-year-old victory, the event resembled preparations for a new war. His expression was grave.
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What Matters Now.

Anti-American Solidarity.

• Khan, Dong-A Ilbo, and JoongAng Ilbo headlined “Anti-American Solidarity.”
• The Korea Times front-page lead reads, “Leftist Summit: Putin, Xi’s Challenge to America.”
• Chosun Ilbo assessed it as “A Declaration of New Cold War.” The Seoul Shinmun front-page lead echoes, “Standing on the New Cold War Watchtower.”
• Kookmin Ilbo and Segye Ilbo highlighted Xi’s phrase, “Peace or War?” as their title.
• The Hankyoreh headline is understated: “Trump-Provoking Tiananmen Diplomacy.”
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Trump Felt Slighted.

• Military parades are exactly Trump’s kind of event. What’s more, Xi and friends’ solidarity sends a message that his trade war might not work.
• Shortly after the parade, Trump posted on Truth Social: “Many Americans gave their lives for the victory and glory of China. I hope their courage and sacrifice are justly remembered.” While emphasizing America’s WWII fight against Japan, it subtly betrays his resentment at being excluded from the big event.
• “Whether Xi will mention the blood America shed is a big question,” he added, “Please convey my regards to Putin and Kim Jong-un, who are plotting against America.” Clearly, he’s pouting.
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Trump and Putin’s Distance.

• Trump also met Putin in Alaska last month but failed to end the Ukraine war.
• Putin may have chosen to appear as opposing Trump rather than being dragged along by him.
• Putin’s pointed remark to Volodymyr Zelenskyy—“Come to Moscow when you’re ready to talk”—also signals he has no need for Trump’s help. He even said, “I’ve invited Trump to Moscow.”
• It’s enough to twist Trump’s sour mood over losing the initiative.

When Dragon and Elephant Converge.

• Xi Jinping (Chinese President) said this to Narendra Modi (Indian Prime Minister).
• CNN analyzed, “India is signaling to the U.S.: ‘We have an alternative in the form of China.’”
• Modi was close to Trump during Trump’s first term, but relations cooled after the U.S. imposed 25+25% tariffs.
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Complicating the Pace-Maker Equation.

• Trump as peace-maker, Lee Jae-myung as pace-maker—so went the plan. But since yesterday’s victory parade, the anti-U.S. North Korea-China-Russia axis has solidified.
• Concerns of South Korea being sidelined are emerging. From Pyongyang’s perspective, there’s no reason to seek Seoul’s help.
• Im Eun-chul (Professor at Kyungnam University) pointed out, “There’s no solution other than moving Beijing.” The suggestion: “Seek U.S. understanding and push for a South Korea-China summit.”
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No North Korea-China-Russia Summit.

• They stood together and met separately, but did not convene as a trio.
• This can be interpreted as a sign that China remains mindful of the U.S. and South Korea.

Xi’s Solo Show.

• Rumors of his downfall are likely unfounded.
• Jiang Zemin (former Chinese President) and Zhu Rongji (former Chinese Premier) were absent. Both are widely speculated to have health issues.
• Jonathan Chin (Brookings Institution researcher) noted, “Jiang Zemin and Hu Jintao each held only one military parade during their 10-year terms, but Xi has already presided over his third,” adding, “This demonstrates how tightly he controls the military.”
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An Era of Turmoil, Fears of South Korea Being Sidelined.

• Newspapers frame the angle subtly differently.
• The Kyunghyang Shinmun editorial predicted, “The North Korea-China-Russia leaders’ Tiananmen performance symbolizes an ‘anti-U.S.’ alliance, potentially becoming an inflection point for Northeast Asia and the Korean Peninsula.”
• The Donga Ilbo assessed the Chinese victory day event as a “sandcastle alliance.” Their analysis: “Given each party’s dream of bargaining with the U.S., betrayal and defection could be the inevitable future of the ‘sandcastle trilateral alliance.’”
• The Chosun Ilbo warned in its editorial, “When the Kim dynasty begins idolizing its successor and formalizes hereditary succession, the entire Korean Peninsula suffers pain and anxiety.” The suggestion: “Kim Ju-ae’s emergence could be a precursor.”
• The Hankyoreh argued, “If we continue neglecting the situation, we’ll suffer greatly as North Korea’s attempts to ‘sideline South Korea’ gain momentum.” Their analysis: “A ‘half-sided diplomacy’ focused solely on South Korea-U.S.-Japan cannot overcome these turbulent waves.” The takeaway: “Diplomacy far more flexible and bold than now is needed.”
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Deep Dive.

Democratic Party Caucus Overwhelmingly Favors Moving Corruption Investigation Agency to Interior Ministry.

• Not a single lawmaker advocated placing it under the Justice Ministry.
• A Democratic Party lawmaker interviewed by Kyunghyang Shinmun said, “The mood was such that it was already decided, making it difficult to speak further.”
• Another lawmaker interviewed by The Hankyoreh stated, “Many believe the Corruption Investigation Agency should remain under the Justice Ministry,” but added, “There’s concern that such statements could invite political attacks.”
• Opinions diverged on supplementary investigative powers.
• One lawmaker noted, “There were differing views: some argued that since prosecutors lack indictment authority, police deviations could be managed, while others pressed for concrete measures against potential cover-ups.”
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Growth Rate Edges Up Slightly.

• Second-quarter growth rate was revised upward from the preliminary 0.6% announced in July to 0.7%.
• Exports and consumption saved the day—both have been rebounding since June. July looks even better.
• Domestic demand may benefit from consumption coupons and supplementary budget execution, but exports require closer monitoring of U.S. tariff impacts.
• Economic sentiment is also recovering. After plummeting to 83.3 immediately following the emergency martial law declaration, it has rebounded to 94.6.

National Debt Ratio to Triple in 40 Years.

• By 2065, it will reach 156% of GDP, according to the Ministry of Economy and Finance.
• The National Pension Service will turn to deficit in 2048 and be depleted by 2064.
• National Health Insurance will shift to deficit next year, with reserves exhausted by 2030.
• The Private School Teachers’ Pension will also turn to deficit next year, depleted by 2033.
• Seok Jae-eun (Professor, Hallym University) pointed out, “The system is slow to reform despite rapid entry into a super-aged society.”
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Foodflation Strikes.

• Starbucks tall latte costs $4.10 in South Korea, $3.30 in the U.S., and $3.60 in Japan.
• Seoul ranked 8th in Deutsche Bank’s global city price index, trailing Geneva, San Francisco, Zurich, and others.
• According to OECD statistics, South Korea’s food and non-alcoholic beverage prices are 1.5 times higher than the OECD average.
• Chosun Ilbo attributed this to low agricultural self-sufficiency and complex distribution structures. South Korea’s food self-sufficiency rate is 49%, with grain self-sufficiency under 20%. Distribution costs as a share of agricultural product prices rose from 39% in 1999 to 50% in 2022.
• The bottom 20% income bracket spends 31% of their income on food.
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Surplus Rice Prices Skyrocket.

• We worried about Japan’s rice prices, but it’s no longer someone else’s problem.
• A 20kg bag has surpassed the psychological resistance level of 60,000 won. The spike is attributed to distributors competing amid stock shortages ahead of the new harvest.
• The government has belatedly intervened to stabilize prices by releasing state reserves.

Korean Labor Union Joins Social Dialogue After 26 Years.

• It was a conclusion reached after two hours of heated debate at the Central Committee meeting. It passed with 54% approval.
• Proponents argue, “There’s no reason to avoid a table where we can participate in the legislative process,” while opponents protest, “What makes the government trustworthy when it hasn’t taken measures to restore trust, such as resolving non-regular workers in the public sector?” There are also concerns that labor might be forced to make burdensome decisions.
• Park Tae-joo (Research Fellow, Korea University Labor Issues Research Institute) pointed out, “Confrontational perceptions that view mediation as defeat, and the leadership’s lack of negotiation skills are factors that make compromise through social dialogue difficult.”
• Division of roles with the Presidential Committee on Economic, Social, and Labor Affairs also remains unresolved.
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Another Take.

Three Gaps in Actual Expense Insurance.

• Prostate artery embolization cost 22.4 billion won in the first half of this year alone. It’s a procedure to widen the urethra.
• It surged 93% compared to the first half of last year.
• High-intensity focused ultrasound (HIFU) for uterine fibroids is also flagged as overused medical care. It reached 81.3 billion won in the first half, a 45% increase.
• Both are mostly non-covered treatments. Non-covered injections like nutritional supplements also rose 27% to 346.7 billion won.
• A industry insider interviewed by Maeil Gyeongjae Shinmun said, “Non-covered items lack price regulations, leading to excessive pricing by medical institutions or unnecessary recommendations of non-covered treatments even when covered alternatives exist,” adding, “Price control mechanisms must be established to prevent abuse of non-covered items and excessive profits from misusing actual expense insurance.”
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Shinsegae + Ali.

• Review of the corporate merger is underway, with a decision expected soon. Approval at the Fair Trade Commission’s full commission meeting is highly likely.
• The overseas direct purchase market grew to 7.9 trillion won last year. AliExpress accounts for 4.7 trillion won of that.
• Apollo Korea, a Shinsegae affiliate, reported the merger involving the acquisition of 50% of Grand Opus Holdings shares—a subsidiary of Alibaba. If approved, G Market (a Shinsegae subsidiary) and AliExpress will be integrated under Grand Opus Holdings as subsidiaries and operated independently.
• Maeil Business Newspaper analyzed that there are no significant obstacles in the Fair Trade Commission’s review.
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Cho Kyung-jin’s Apology.

• Cho Kyung-jin (Minister of Education) was thoroughly grilled during the personnel hearing.
• There were controversies over plagiarism in his master’s thesis and a drunk driving scandal. He called it “the biggest mistake of my life.”
• Social media was again the source of trouble. He shared conspiracy theories that the Cheonan had collided with a submarine and also posted writings defending Cho Kuk (former Minister of Justice).
• “I didn’t share it with professional knowledge about the Cheonan incident, thinking ‘this is wrong’ or ‘it’s a conspiracy theory.’ I merely shared it as something worth discussing. Now, I believe we should respect the results announced by the state’s investigation.”
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Ji Gwi-yeon and Lee Jin-suk.

• An unnamed Democratic Party senior member, cited anonymously by Chosun Ilbo, said, “If the court imposes disciplinary action against Ji Gwi-yeon (Seoul Central District Court judge), we could reconsider establishing a special tribunal.”
• Kim Chang-gyun (Chosun Ilbo editorial director) criticized, “They’ve turned the question of legislation—capable of shaking the backbone of our judicial system—into a bargaining chip for excluding specific judges.”
• Regarding the revision of the Broadcasting Communications Commission Act, he noted, “They’re mobilizing a law that dismantles a government agency and creates a new one just to fire one person, Lee Jin-suk (chairperson of the Korea Communications Commission).”
• Kim’s remark that “this is why people ask if purges or revolutions are happening in Korea” is an exaggeration and a fallacy. The Democratic Party repeatedly emphasizes that the bill is not about ousting Lee Jin-suk. It’s for this reason that some argue the president should dismiss her directly under official authority.
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LH Sold Land 15x the Size of Yeouido.

• LH (Korea Land and Housing Corporation) developed 26.5 km² of public housing sites over 12 years but sold 42.3 km²—more land than it developed. The sales generated 85 trillion won.
• If LH had retained the developed sites instead of selling them, they would have remained public assets. Instead, critics argue, it only enriched construction companies. The 70 trillion won worth of apartment sites LH sold have since appreciated to 102 trillion won.
• Jeong Taek-su (Real Estate Policy Team Leader at the Citizens’ Coalition for Economic Justice) noted, “Under the guise of stabilizing capital-area housing prices, public sites are developed, bought cheaply by construction firms, and then resold as new apartments at market rates.”
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Google Avoids Forced Chrome Sale.

• After losing an antitrust lawsuit, the U.S. Department of Justice demanded Google’s division, but a federal court ruled on appeal that separation is unnecessary.
• The ruling’s key points:
• Chrome does contribute to Google’s dominance. However, separating it is inappropriate.
• Exclusive contracts favoring Chrome in search engines, browsers, or AI chatbots are prohibited.
• Alphabet’s stock surged over 9%, breaking its record high.
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The Fix.

Three Conditions to Make Offshore Wind a Growth Engine.

• Wind power grew from 24GW in 2001 to 1,021GW in 2023. Offshore wind accounts for 75GW. South Korea stands at 0.3GW.
• Yoon Je-yong (Seoul National University professor) proposed three points.
• First, expand the power grid. Transmission networks must be deployed and LCOE (levelized cost of energy) reduced to ensure project viability.
• Second, despite a localization rate over 50%, the sector must grow through international collaboration and attracting foreign investment.
• Third, the government should lead supply chain strategies and R&D investment.
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Why Studio Ghibli-Style Memes Aren’t Illegal.

• “This is all you need to know: Copyright law protects creative works expressing human thoughts or emotions.”
• A snippet from a media conference lecture by copyright attorney Jeong Ji-woo (Attorney-at-Law).
• First, AI-generated content has no copyright. The channel owner also holds no copyright.
• Second, facts are not copyrightable. Facts themselves cannot be protected.
• Third, unexpressed ideas are not protected. The nature of the prompt is key. News specials, variety show concepts, or idol concepts are not copyrightable. Thus, the Studio Ghibli style falls under the realm of ideas and is not copyright-protected. The same applies to impressionism, modern rock, or Haruki Murakami’s writing style.
• Still, caution is needed. If there’s substantial similarity to a specific work, it constitutes copyright infringement.
• What about AI-generated drafts modified by humans? If the human-edited portions contain creative elements, they may qualify for copyright. Since it’s unclear how much human intervention occurred, if an AI video appears unaltered by human hands, it cannot be used. Deeming AI-generated content categorically uncopyrightable is overly simplistic.
• If humans curate, edit, and arrange the content, it should qualify as a derivative work.
• When using copyrighted photos to create AI-generated content, rights belong to the photo’s owner. Creating a derivative work from copyrighted material without permission infringes copyright. The right of integrity—the author’s moral right—is also violated.

ICYMI.

Trump’s Fiery Death Speculation.

• Trump suddenly vanished, sparking death rumors. He had no official schedule for three days since the 26th. Health concerns have persisted, but this time it seemed more serious.
• Trump is seventy-nine this year. Recent bruises on his hand, covered with makeup, sparked controversy. The White House claimed it was from shaking too many hands. Some cited aspirin injections, but doubts lingered.
• Over the weekend, he posted on Truth Social: “NEVER FELT BETTER IN MY LIFE!” Conspiracy theorists called it a cover-up.
• The Pentagon Pizza Index controversy resurfaced. Pizza orders near the Pentagon surged over the weekend, fueling speculation about a major event.
• Similar spikes occurred before key events: the 1989 Panama invasion, 1990 Kuwait invasion, 1991 Desert Storm, and June’s Iran airstrike.
• He reappeared a week later (Tuesday, the 2nd). When asked if he knew about the death rumors, he said he’d just heard. Unbelievable for someone so news-obsessed.
• The episode ended as a farce, but the bigger question remains: why does this keep happening? The world is swayed by a volatile old man’s moods—unpredictable, riddled with uncertainty. This is not democracy.
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‘K-Pop Demon Hunters’ Tops Netflix.

• It ranked first in films but surpassed even dramas to claim the overall top spot. It pushed ‘Squid Game Season 1,’ which had held the number one position for the past four years, to second place.
• Cumulative views reached 266 million. It still has 91 days left to set the 100-day record.
• ‘Golden’ has maintained the Billboard Hot 100 number one position for three consecutive weeks. Eight soundtrack tracks entered the Billboard Hot 100.
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Abe’s Guide to Handling Trump.

• Trump once pressured former Japanese Prime Minister Abe Shinzo to hand over land for U.S. military bases. It’s a story from his memoir. Abe drew a line: “Futenma Base is originally Japanese-owned, so real estate prices are irrelevant to the U.S.”
• The NSC staff reportedly tried to use Abe to persuade Trump, allegedly flattering him by saying, “Global security is maintained by America’s presence.”
• Abe’s English wasn’t strong, yet he spoke with Trump for an hour at a time. The main agenda ended in 15 minutes; the rest was golf talk or criticizing other world leaders.
• Lee Jae-myung might take note: To avoid awkward language in public, it’s best to set clear boundaries privately. Never forget Trump is a dealmaker.
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Worth Reading.

‘Nuclear Renaissance’: A Dream That Won’t Come True.

• Czech Dukovany, touted as a jackpot, is likely to benefit Westinghouse more than anyone else. “We’ve achieved technological independence, but Westinghouse holds the core technology” is another way of saying we lack essential know-how.
• Even proponents claiming nuclear power is essential in the AI era should consider that 14 of the EU’s 27 countries already generate over half their electricity from renewables.
• Nuclear exports totaled 5 trillion won over the past decade, while renewables grew into a 39 trillion won market.
• The UAE nuclear plant, which Lee Myung-bak (former president) hailed as the most effective project since the nation’s founding, has accumulated a 34.9 billion won deficit.
• The “nuclear renaissance” predicted 20 years ago never arrived—and the consensus is it won’t come.
• Lee Hyun-seok (Energy Justice Action Policy Committee) emphasized, “Government policy and support must be dispassionate,” adding, “Transparent information disclosure and post-audit are essential.”
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How About a Smartphone Ban in the National Assembly Chamber?

• This is in reference to the classroom smartphone ban legislation.
• How many times have lawmakers faced embarrassment from their smartphone screens being caught on camera?
• Lee Byung-gon (Professor, Geonshin Graduate University) noted, “Such a law is unlikely to pass,” adding, “They won’t exercise legislative power in a way that reduces their own rights or authority.”

South and North Korea as Independent Variables.

• It’s not yet a North Korea-China-Russia alliance. Trump continues to send love calls to Kim Jong-un. North Korea is an independent variable.
• The same applies to U.S.-China-Russia relations. Trump imposes tariffs on China one moment and negotiates the next. He meets Putin, then pressures Ukraine. Trump is more likely to seek power-sharing than to suppress China and Russia.
• Jeong Ui-gil (Senior Reporter, Hankyoreh) emphasized, “South Korea needs an independent diplomatic will more than ever.” “While maintaining leverage by providing what the U.S. and Japan need, it must also convince China and Russia that South Korea poses no threat—and secure their resources and markets,” he argued.
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A Poor but Fiery Neighbor’s Choice.

• Lee Jae-myung made this remark during a press conference shortly after the South Korea-U.S. summit. Cha Sae-hyun (JoongAng Ilbo columnist) assessed it as accurate.
• North Korea’s GNI (Gross National Income) is 44 trillion won. South Korea’s is 2,594 trillion won. Per capita GNI is 1.72 million won in North Korea and 50.21 million won in South Korea.
• North Korea’s economic growth rate reached 3.1% in 2023, followed by 3.7% last year.
• While Lee Jae-myung declared, “There is no ‘pro-U.S. and anti-China’ policy,” Kim Jong-un is likely to pursue a “pro-Russia for security, pro-China for economy” approach. There are also forecasts that China will step up economic support.
• Under the Kim Il-sung-Kim Jong-il regimes, North Korea benefited from equal-distance diplomacy with China and Russia. The difference now is that while it previously exploited conflicts, it has now aligned closely with them.
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The Era of Fiscal Dominance.

• “We have entered a new era of ‘fiscal dominance.’” So says Kenneth Rogoff (Harvard University professor), referring to central banks prioritizing government fiscal demands over price stability or employment goals.
• Korea’s situation is relatively better, but the U.S., Europe, and Japan all have government net debt ratios exceeding 100%. The U.S. fiscal deficit stands at 7.3% of GDP, with government interest costs reaching $950 billion. Japan’s outstanding government bond balance is 1,104 trillion yen—interest costs alone nearing 11 trillion yen this year.
• Surging long-term bond yields globally reflect growing concerns about fiscal health. The U.S. 30-year Treasury yield hit 4.977%, while the UK’s rose to 5.695%. Bond yields are also showing synchronized movements.
• Ha Hyun-ok (JoongAng Ilbo columnist) warned, “Fiscal dominance carries hidden headwinds.” There are fears of falling into the ‘debt death spiral’ described by Ray Dalio (Bridgewater Associates founder)—a cycle where borrowing to repay debt narrows central banks’ policy options.
• Kim Gyu-seong (Financial News political editor) noted, “As Japan’s ‘lost three decades’ show, deficit spending cannot sustain economic vitality.” France serves as another cautionary example: persistent fiscal deficits of 4–6% of GDP have ballooned national debt, raising the specter of IMF bailout talks.
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