KOSPI 3,317.

• It’s a historic milestone. It peaked at 3,317.17 and closed at 3,314.53.
• It’s up 38% this year, leading global major stock market returns.
• Five reasons can be identified.
• First, the possibility of US interest rate cuts. Weak employment data suggests higher chances of rate cuts, fueling expectations of an economic rebound.
• Second, tech stocks surged in the US, and Samsung Electronics and SK Hynix rose in tandem.
• Third, foreign investors keep buying. Many analysts call it a bargain hunt—Korean stocks have relatively lagged.
• Fourth, speculation grew that the stock transfer tax threshold of 5 billion KRW would remain. Lee Jae-myung (President) is likely to announce it in today’s press conference. Bank and brokerage stocks, which pay dividends, also rose sharply.
• Fifth, the Lee Jae-myung effect. With a target of 5,000 points and expectations of governance improvements after corporate law revisions.
• Noh Dong-gil (Shinhan Investment & Securities researcher) forecasts it could reach “3,890–3,940 in the first half of next year.”

Charter Flight Grounded.

• The South Korean workers detained at the US Immigration and Customs Enforcement (ICE) facility in Folkstone, Georgia, remain unreleased. They were expected to be freed around 4:00 AM local time on the 10th, but the release was delayed without explanation.
• Observers suggest the delay stems from disagreements between the US State Department and Department of Homeland Security.
• A diplomatic source met by The Korea Daily said, “Immigration authorities may be reluctant to simply release 300 or so South Koreans without conditions.”
• Foreign Minister Cho Hyun met with US Secretary of State Marco Rubio, but no concrete details emerged.
• While there were claims that “Donald Trump (US President) instructed to act as South Korea requested,” reports suggest disagreements persist over procedural matters like whether to use handcuffs.
• Related Link.
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What Matters Now.

Car Exports to US Drop by $3 Billion.

• In Q2, car and auto parts exports fell 21% and 8%, respectively, reflecting the impact of 25% tariffs imposed since April.
• Prospects for Q3 are even bleaker. While prices were maintained by drawing down inventories until now, cost pressures will materialize from July.
• Although tariff negotiations concluded with a reduction from 25% to 15%, Trump has yet to sign the executive order. Japan’s tariffs will drop from 27.5% to 15% starting the 15th, but South Korea faces prolonged 25% levies.
• Computer parts exports, including semiconductors, surged 32%—a rush to stockpile ahead of tariff imposition.
• Related Link.

Approval Rating at 100 Days: Third-Highest in History.

• No Gyu-hyung (CEO of Research & Research) analyzed it as a combination of the “honeymoon effect” and the “rally around the flag effect.”
• According to a Gallup Korea survey, Lee Jae-myung’s approval rating at 100 days was 63%. Kim Young-sam (former president) led with 83%, followed by Moon Jae-in (former president) at 78%. (The chart below differs as it is based on quarterly data.)
• “One key variable is not ‘events’ but ‘time.’ Almost all past presidents saw their approval ratings decline over time. Once negative sentiment overtakes positive, it’s extremely difficult for positive to regain the lead.”
• Han Gwi-young (director of The Hankyoreh’s People and Digital Research Institute) assessed, “Rather than pursuing the ideal of a president with universal support, this administration has chosen the reality of maintaining 60% approval through incremental achievements.”
• Related Link.

One in Four Lee Jae-myung Supporters Are ‘New Lee Jae-myung’ Voters.

• This refers to those who became supporters after the presidential election. In a joint survey by The Hankyoreh and STI, Lee Jae-myung’s approval rating stood at 62.7%.
• ‘New Lee Jae-myung’ voters—those who did not support him before the election but switched to supporting him—accounted for 14.5%. ‘Old Lee Jae-myung’ voters made up 48.2% of all respondents.
• Park Jae-ik (STI researcher) analyzed, “Lee Jae-myung’s approval rating will hold above 60% if ‘New Lee Jae-myung’ voters remain, but could plummet below 50% if they defect. In essence, the key to stable governance lies with the ‘New Lee Jae-myung’ cohort.”

National Growth Fund Expanded to $110 Billion.

• Originally targeted at $72 billion, the goal has been raised. The government expects up to $90 billion in added value.
• $22 billion for AI, $15 billion for semiconductors, $13 billion for mobility, and so on.
• The government will contribute $720 million as subordinated shares to kickstart the fund.

Deep Dive.

“I Wish It Had Happened” — Song Eun-seok’s Remark.

• During a National Assembly speech, Rep. Jeong Cheong-rae (Democratic Party leader) said, “If Roh Sang-woo’s notebook had succeeded, neither President Lee Jae-myung nor I would be alive today.” Someone responded, “I wish it had happened.”
• The video revealed the speaker was surprisingly Song Eun-seok (People Power Party floor leader).
• Roh Sang-woo (former Intelligence Command chief), detained on charges of rebellion conspiracy, had written in his notebook: “First roundup of 30–50 people in Yeouido” and “100–200 people in media” to be “detonated in appropriate locations.”
• In an editorial, Kyunghyang Shinmun called it “shocking enough to make one doubt their eyes and ears,” labeling it “an insult to all citizens, the victims of this rebellion.”
• Related Link.

No Second Unit in the Presidential Office.

• Party-government relations have shifted. Observations also emerge that “if the Presidential Office tries to seize control too tightly or conversely, the party charges ahead, power could fragment or conflict erupt.”
• The day after the ruling party leader met with opposition representatives at the Presidential Office, Jeong Cheong-rae’s National Assembly speech—referencing party dissolution—could be seen as role division at best, or miscoordination at worst. Analysis suggests hardline supporters are bolstering Jeong, and the President, aware of this, is refraining from intervention.
• Related Link.

Biting a Rapist’s Tongue: Acquittal After 61 Years.

• In a retrial held after 61 years, the court acquitted the defendant. Kim Hyun-soon (Busan District Court judge) ruled, “This constitutes justifiable self-defense to escape unlawful infringement on one’s body and sexual autonomy.”
• Choi Mal-ja (the victim) served six months in prison for biting the tongue of a man who attempted to rape her. She was tried in custody and sentenced to 10 months in prison, suspended for two years. She was 18 at the time and is now 78.
• In July, during the final hearing, prosecutors requested an acquittal, stating, “We inflicted immeasurable pain and suffering on a victim who should have received proper assistance.”
• Related Link.
• Related Link.

Another Take.

“Special Tribunal Needed” — Did Kim Eo-jun’s Proposal Spark Action?

• Short for “rebellion special tribunal.” After Kim Eo-jun (CEO of Ddanzi Ilbo) claimed on News Factory last month that 66% supported the special tribunal, public demand for its establishment surged. The poll was conducted by Kim’s own polling platform, Opinion Flower.
• Coincidentally, days later Kim Byung-ki (Democratic Party floor leader) said, “I think a special tribunal is necessary,” and Jeong Cheong-rae added, “It seems no one can avoid this.”
• Conservative media’s ongoing attacks on Kim Eo-jun reflect his immense influence.
• Yang Bu-nam (Democratic Party lawmaker)’s appearance also drew attention.
• Yang Bu-nam: “The Corruption Investigation Office must belong to a third entity, not the Ministry of the Interior or Justice.”
• Kim Eo-jun: “To pass it by the 25th, we’d have to propose it by the 5th—this isn’t something we can rush now.”
• Yang Bu-nam: “I understand.”
• Kwak Sang-eon (Democratic Party lawmaker) ignited debate by criticizing the party’s excessive reliance on Kim Eo-jun.
• A Democratic Party lawmaker interviewed by JoongAng Ilbo said, “If you appear on Kim Eo-jun’s show, your donation account fills within half a day—you can’t afford not to.” It’s even said, “Ddanzi’s message board is the best place to gauge Democratic Party sentiment.”
• One lawmaker remarked that seeing Park Chan-dae (then party leadership candidate) skip Kim Eo-jun’s pre-convention concert made him “certain of his victory.”
• JoongAng Ilbo analyzed that pro-government YouTubers are showing signs of fragmentation. While Kim Eo-jun has been passive on Cho Kuk Reform Party’s sexual misconduct scandal, Lee Dong-hyung TV has strongly criticized it. Lee Dong-hyung TV also opposed Cho Kuk’s pardon from the start. Opinions diverged over Kang Sun-woo (then Minister of Gender Equality nominee) as well.
• Related Link.
• Related Link.

Without Supplemental Investigative Authority, Bribery Cases Are 100% Acquittals.

• Moon Woo-il (former Prosecutor General) said this. He served as Prosecutor General under the Moon Jae-in administration.
• In an interview with JoongAng Ilbo, he criticized, “Monopolizing any authority (investigative power) in a single ministry or agency is not only anti-democratic but also a monarchic mindset advocating a return to absolute rule.”
• While it’s true that problems arose from the prosecution’s monopoly over investigation and indictment, he argued that granting absolute power to the Ministry of the Interior and Safety’s leadership isn’t a solution. Moon emphasized, “Absolute power absolutely corrupts.”
• “If police forward 10 circumstantial clues without conclusive evidence, and a prosecutor finds one of them questionable, they can only stamp and send it to court—resulting in an acquittal. If prosecutors cannot conduct supplemental investigations to rigorously prove facts under evidence law, they must drop charges and release the suspect. Would we then only blame them for ‘letting the suspect go’? That’s why supplemental investigative authority for indicting officers is essential.”
• Related Link.

Taiwan and South Korea: 4.5% vs. 0.9%.

• This year’s growth forecast.
• Taiwan is also projected to reach a per capita GDP of $41,019 this year. Once the weakest of Asia’s Four Dragons, Taiwan has risen again.
• Son Hae-yong (JoongAng Ilbo economic affairs editor) analyzed that 2016 marked Taiwan’s turning point. Under Tsai Ing-wen (then Taiwan’s president), the administration emphasized pro-business and pro-market policies, restructuring the industrial landscape around major corporations.
• While South Korea debated corporate law revisions, Taiwan incorporated shareholder loyalty duties 19 years ago. It also mandated cumulative voting systems in 2011.
• Lee Bong-hyun (research fellow at the Hankyoreh Economic and Social Research Institute) noted, “Taiwan’s corporate governance reforms were implemented through bipartisan consensus,” adding, “There was a shared understanding that advanced governance and foreign capital attraction were core national interests.”
• Related Link.

Israel’s Qatar Strike: Trump Was Left in the Dark.

• Israel bombarded a residential area in Doha, Qatar, claiming it aimed to eliminate Hamas leadership.
• Qatar is a U.S. ally and a mediator often called the “Switzerland of the Middle East.” Trump expressed strong regret, stating, “It doesn’t help achieve U.S. goals.” Some analysts argue Israel has crossed a red line.
• Trump said he was not briefed in advance. The Qatari government likely received notification only after the airstrikes began.
• Hassan Al-Hassan (Research Fellow at the International Institute for Strategic Studies) predicted, “Whether the U.S. tacitly approved or actively encouraged it, this could have far-reaching consequences for Gulf states’ relations with the U.S.”

The Fix.

Half of Climate Response Dams Halted.

• Yoon Suk-yeol’s government has decided to suspend half of the 14 proposed climate response dams.
• Kim Sung-hwan (Minister of Environment) said, “When I visited the site, I found a 2 million-ton dam with a 9 million-ton pumped-storage dam beneath it,” adding, “If we use existing dams more efficiently, there’s no need to build new ones.”
• The government remains open to revisiting the expansion of nuclear power plants.
• Related Link.

Too Easy a Path to the Rooftop.

• Many countries legally restrict rooftop access. Singapore requires building owners to install locks and access barriers.
• Some argue that “suicide barriers” must be created to reduce jumping risks.
• Jeong Taek-soo (Director of the Korea Suicide Prevention Center) emphasized, “When someone feels the impulse to jump, physical measures should be taken to make them think, ‘I can’t get up here’ or ‘It’s locked,’ giving them a chance to reconsider.”
• Related Link.

ICYMI.

National Standard Apartment: 18 Pyeong Over 25 Pyeong.

• Once called the national standard at 84㎡ (25 pyeong), apartments now trend toward 59㎡ (18 pyeong).
• While 25 pyeong was sized for four-person households, 18 pyeong suits 1–2 person households.
• This year, private apartment subscription competition rates saw 18 pyeong at 19:1 versus 25 pyeong’s 6:1.
• The reversal began in 2022.

CGV Posts 17.3 Billion Won Loss in Q2.

• Attendance dropped from 15.61 million in Q2 last year to 10 million this quarter. The chain has closed 12 theaters since January.
• The Ma Dong-seok (actor) film ‘Holy Night: Demon Hunters’ reached only 770,000 viewers against a break-even point of 2 million. ‘Omniscient Reader’s Viewpoint,’ with a production budget of 30 billion won, fell short of its 6 million break-even threshold at 1.06 million.
• Total attendance for the first half of 2025 was 42.5 million, making it unlikely to reach 100 million annually. “Emergency measures akin to CPR are needed,” one insider remarked.
• Related Link.

Gyeongju APEC: Where Will Trump Stay?

• Daily visitors are expected to reach 7,700. Some 12,812 rooms have been prepared within a 10km radius.
• Trump is likely to stay at the Hilton Gyeongju.
• There are also observations that he might use an aircraft carrier. In 2001, during the G8 summit in Genoa, Italy, George W. Bush (then U.S. President) stayed aboard the Enterprise aircraft carrier.
• The possibility of choosing Namhae Ananti, connected to a golf course, remains.

France’s New Prime Minister: The Enigma.

• Emmanuel Macron (French President) has nominated Sébastien Lecornu (French Minister of Defense) as the next prime minister. The nickname stems from his aversion to media exposure.
• Mass protests against the austerity budget bill, led by the ‘Bloquons Tout’ (Stop Everything) movement, are expected to erupt immediately after his inauguration, likely sparking fierce resistance.

Sixth Judicial Training Institute Cohort.

• Lee Jae-myung’s judicial training institute peers are being appointed to key positions. Yesterday, Wi Cheol-hwan (lawyer) was nominated as a National Election Commission candidate.
• Following Jung Sung-ho (Minister of Justice), Jo Won-cheol (Legislation Director), Oh Kwang-soo (former Senior Civil Affairs Secretary), Cha Jung-in (National Education Committee Chair), and Lee Chan-jin (Financial Supervisory Service Governor) are all peers from the 18th judicial training institute cohort.
• In an editorial, Chosun Ilbo noted, “Presidents can appoint close associates—a common practice abroad,” yet cautioned, “There is a proper measure to everything.”
• Related Link.

Worth Reading.

Can Cho Kuk’s Party Survive Until 2028?

• Lee Se-young (Hankyoreh Political Editor) sees low chances. Some lawmakers are likely to join the Democratic Party before the general election, secure local constituencies, and aim for re-election. A merger is also possible.
• Lee Se-young analyzed, “To meet the supporters’ desire for Cho Kuk (former party leader) to become the next president, it’s hard to find a realistic alternative other than running for the presidency as the first party’s candidate.”
• Lee Se-young advised, “The revenge is over,” adding, “It’s better for voters and the party ecosystem if they fulfill their mission and return to their original positions without hesitation.”
• Related Link.

Why Politics?

• Kim Kwang-ho (Kyunghyang Shinmun Editorial Writer) also strongly criticized the Cho Kuk Innovation Party: “Rather than confining ‘Cho Kuk politics’ to the anger and fervor of one’s camp, they must first answer ‘why politics?’”
• Cho Kuk declared that now that his icebreaker role is over, he will become a wrecking ship—also vowing to be a left-handed pitcher filling the left side of Lee Jae-myung’s government.
• Kim Kwang-ho pointed out, “Whether a left-handed pitcher or a wrecking ship, in reality, it may amount to nothing more than a pleasure cruise riding the tailwind of public sentiment demanding ‘punishment for sedition.’”
• “They treat responsibility lightly, waving banners and rushing forward only in front of their comrades,” he criticized.
• Related Link.

The Limits of the Trump Formula.

• Immigrants steal American jobs and commit crimes→crack down on illegal immigration→employment will rise and public safety will improve. Trump supporters were ecstatic over this simple, clear-cut formula.
• Yet reality is far more complex. If you expel the workforce, the U.S. economy collapses. The TSMC plant in Arizona, which began operations last year, employs over half its staff from Taiwan. The Georgia detention crisis is another example of this formula clashing with reality.
• Kwak Joo-hyun (The Korea Herald reporter) noted, “Reality is closer to a lengthy essay spanning thousands or tens of thousands of pages,” adding, “The simpler the formula, the harder it is to predict where and what side effects might erupt.”
• Related Link.

Riding the ‘All-In on America’ Tiger.

• Once you climb a tiger’s back, you must not fall off. South Korea has now placed all its eggs in the American basket.
• Cho Il-hoon (Editorial Director, Korea Economic Daily) pointed out, “The U.S. is a country incapable of manufacturing.” Its technological ecosystem has collapsed, and there’s no one left to work. Of America’s 340.1 million people, only 3.6% work in manufacturing—compared to 8.5% in South Korea. The average U.S. wage exceeds 40,000 won per hour.
• Cho Il-hoon emphasized, “If investments in the U.S. fail, our industries have no future.”
• Since the Biden administration, Korean companies have poured over $100 billion into U.S. factories. They’re expected to invest another $350 billion. The era of $40,000 national income hinges on winning in America.
• Related Link.

It’s Not Too Late Yet.

• Park Hyun (Hankyoreh Editorial Writer) believes the $350 billion investment should be reconsidered.
• Declining industries naturally pass to latecomers. Korea itself struggles—can the U.S., where production costs are at least 30% higher and deindustrialization has progressed for over 20 years, realistically succeed in bringing factories back?
• Park Hyun stressed, “Rather than hastily accepting unreasonable U.S. demands to dodge an immediate crisis, we must clearly distinguish what we can and cannot do—and persuade the U.S.”
• The warning: “The U.S. might fail without consequence, but the Korean economy could stagger from a major shock.”
• Related Link.
• Related Link.