A Pledge to Invest 1.3 Quadrillion Won.

• Samsung Group promised 450 trillion won, Hyundai Motor Group 125 trillion won, and SK Group 600 trillion won.
• The commitments were made during a meeting between Lee Jae-myung (President) and chaebol leaders.
• They are a response to concerns about industrial hollowing-out after U.S. tariff negotiations concluded and $350 billion in investments were pledged.
• Hanwha Group plans to invest 11 trillion won in domestic shipbuilding and defense industries—separate from its 7 trillion won investment in the U.S. Philly Shipyard.
• HD Hyundai Heavy Industries will invest 15 trillion won, and Celltrion 1 trillion won.
• Such events have been repeated under past administrations, so whether these investments will actually materialize remains to be seen.
• Related Link.

“What Meaning Does Pro-Business or Anti-Business Hold?”.

• Lee Jae-myung told chaebol leaders, “I will do whatever can be done,” adding, “If you point out possible deregulations or abolitions, I will swiftly address them.”
• He proposed, “New methods could be introduced, such as issuing subordinated bonds or absorbing losses first when investing in R&D or high-risk areas.”
• He also left room for a social grand compromise.
• First, businesses cannot operate without labor, and jobs and labor cannot exist without businesses.
• Second, strengthening social safety nets is essential to resolve employment flexibility and precarious work.
• Third, why not have businesses and the government jointly discuss funding solutions?
• Related Link.

What Matters Now.

Fact Sheet Announcement: 15% Auto Tariff Retroactive from Day One.

• The $350 billion was divided into $200 billion by the Korean government and $150 billion for shipbuilding. Government investment will not exceed $20 billion annually.
• Auto tariffs will be reduced to 15%. Pharmaceutical tariffs will not exceed 15%. Steel tariffs remain at 50%.
• Semiconductors will receive most-favored-nation treatment—meaning no worse conditions than other countries.
• Defense spending will increase to 3.5% of GDP. By 2030, $25 billion worth of military equipment will be purchased from the U.S.
• The agreement included approval for nuclear-powered submarine construction, but omitted that they would be built in the U.S. Satellite Wook (National Security Director) said, “We consider it settled as domestically built.”
• Related Link.
• Related Link.

200 Billion Dollar Investment with Multiple Safeguards.

• 200 billion dollars in cash investment will split profits 5:5 between South Korea and the U.S. until principal and interest are repaid, then 1:9 afterward. If repayment is not made within 20 years, the profit ratio can be adjusted.
• The investment commitment deadline is January 2029, aligned with Donald Trump (U.S. President)’s term. Investment targets will be selected first, with funds disbursed over more than 10 years.
• The clause “only commercially reasonable investments will be recommended” was included. The U.S. will handle all investment target recommendations and decisions. For each project, South Korea will appoint a recommended project manager.
• If foreign exchange markets become unstable, the investment timing can be adjusted.
• The 150 billion dollars for shipbuilding investment will grant South Korean companies 100% of profits.
• Related Link.

The Biggest Concession: $20 Billion Annual Cap.

• It is at least a condition where the U.S. made significant concessions. While Japan must pay in full by January 2029, the difference is that Korea only committed and will pay in installments.
• A project manager is also not included in the U.S.-Japan investment agreement. The U.S.-Japan agreement explicitly includes the Alaska LNG project, whereas the Korea-U.S. agreement vaguely summarizes it as “energy investments.”

A New Korea-U.S. Investment Corporation.

• It is separate from the Korea Investment Corporation (KIC). However, investment funds will be sourced from the Bank of Korea’s and KIC’s operational earnings.
• With KIC’s annual earnings at $15–18 billion, adding the Bank of Korea’s foreign exchange reserves earnings would reach the $20 billion target.

Will Korean and Japanese Funds Build U.S. Nuclear Reactors?

• Trump will decide where the $200 billion will be invested.
• Of Japan’s already pledged $550 billion, $332 billion is earmarked for nuclear reactors and power grids—and according to the JoongAng Ilbo, South Korean funds may also flow into this sector.
• The possibility of Korean companies’ participation is also being discussed. Doosan Enerbility and others are likely candidates to join Westinghouse as construction contractors.
• Related Link.

New Additions to the Fact Sheet.

• “Complete denuclearization of the DPRK” is now included. This contrasts with earlier rhetoric that seemed to tacitly accept North Korea as a nuclear state while requesting talks with Kim Jong-un (North Korean State Affairs Commissioner).
• The South Korean government will provide $33 billion in support for U.S. troops stationed in Korea. Despite plans to transfer wartime operational control, U.S. forces will remain stationed.
• The Taiwan issue was also addressed. The leaders agreed to “encourage a peaceful resolution to the cross-Strait issue and oppose unilateral changes to the status quo.” This appears to be a deliberate effort to draw South Korea closer amid concerns about China.
• Support for uranium enrichment and reprocessing of spent nuclear fuel is also included—a significant concession reflecting South Korea’s demands.
• The removal of non-tariff barriers for agricultural products is mentioned. This could intensify pressure to import U.S. apples.
• A clause abolishing the 50,000-vehicle cap on U.S. car imports holds little practical weight. Last year, South Korea imported only 40,879 U.S.-made vehicles—most Teslas are Chinese-made.
• Rice and beef were entirely omitted.

“Our Greatest Negotiating Weapon Is Endurance.”.

• “Even if political stances differ, it would be better to voice reasonable opinions for national interest and citizens in external relations. But situations where pressure is applied—‘reach an agreement quickly,’ ‘failure to do so is incompetence,’ ‘quickly accept the other side’s demands’—were truly challenging.”
• Lee Jae-myung (President) stated, “In a negotiation we were involuntarily forced into, our only strength was to endure.”
• Related Link.

“Stunned by the First Proposal.”.

• Kim Yong-beom (Presidential Office Policy Director) remarked, “When the U.S. sent an absurd proposal, I thought, ‘Ah, this is the year of Eulsa.’”
• Kang Hoon-sik (Presidential Office Chief of Staff) stated, “Kim Yong-beom and Wi Sung-lak were the ones persuading internally, while the President was the most unyielding.”

“Where’s the Fairness in This?”.

• “Isn’t this excessively unfair?” was how Kim Jeong-gwan (Minister of Trade, Industry, and Energy) responded to the question. “How can a 5:5 profit split make sense when the U.S. isn’t contributing a penny?” The explanation: the negotiation was inherently unfair to begin with, and this was merely avoiding the worst-case scenario.
• Toxic clauses still abound.
• If the U.S. president designates an investment target, funds must be transferred within 45 days—and failure to comply triggers punitive tariffs.
• If Korea falls short of the U.S.-demanded amount, the deficit is reclaimed under the guise of “adjusted allocation.” For instance, if $5 billion is requested for a project but Korea invests only $2.5 billion, the U.S. will take an additional $2.5 billion from returns on other projects.
• The Hankyoreh pointed out, “The so-called safeguards Korea supposedly secured are framed in a way that relies on U.S. goodwill.” While investment targets are supposed to be negotiated, the U.S. can opt out without consequence.
• Related Link.
• Related Link.

November 17 Marks the 120th Anniversary of the Eulsa Treaty.

• Coincidentally, this year is also an Eulsa year, and we’ve just concluded a humiliating negotiation with the U.S. Back then it was Japan; now it’s the U.S. The only difference is that Korea isn’t the only one being targeted.
• The People Power Party claims it’s a treaty requiring ratification, but the government insists it’s merely a memorandum of understanding—not a treaty. The very term “Eulsa Treaty” still leaves a bitter taste.
• Lee Bon-young (Senior Reporter, The Hankyoreh) assessed, “But make no mistake: we were coerced, forced to pay a hefty price and compromise economic sovereignty.”
• Can this even be called a negotiation or a deal? It was pressure: “Take the small stick or the big one—give us something if you want the lesser punishment.” This negotiation result is akin to cutting off a finger instead of an arm to barely survive. It was a well-handled negotiation, but a sober evaluation is needed, and follow-up strategies are now critical.
• Lee Bon-young added, “Only by gritted-teeth reflection today can we prevent future generations from facing another Eulsa year filled with resentment.”
• Related Link.

Deep Dive.

“Inappropriate to Abandon Daejang-dong Appeal,” 48%.

• Results from a Gallup Korea poll. “Appropriate” responses were 29%.
• Lee Jae-myung’s approval rating dropped from 63% to 59%, while the Democratic Party rose from 40% to 42%. The People Power Party fell from 26% to 24%. Despite numerous setbacks for the government and ruling party, they still hold nearly double the score. (The poll was conducted before the Fact Sheet announcement, so the finalized tariff negotiation deal was not reflected.)
• The unaffiliated voter bloc grew to 27%. JoongAng Ilbo analyzed, “Even when disappointed with the ruling party, they won’t turn to the opposition.”
• Reactions of “embarrassment” also emerge within the People Power Party.
• Cho Won-bin (Sungkyunkwan University Professor) analyzed, “Because the People Power Party isn’t perceived as a viable alternative at all.”
• Related Link.
• Related Link.

Why Lee Jae-myung’s Approval Rating Remains Unshaken Despite the Appeal Withdrawal Case.

• Sung Han-yong (Senior Reporter, The Hankyoreh) predicted, “The impact of the appeal withdrawal case will be limited.”
• First, Lee Jae-myung’s judicial risks are not new news. Voters chose him knowing this, and expectations for him persist.
• Second, thanks to the opposition party. By shouting, “We are Hwang Kyo-ahn,” Jang Dong-hyeok (People Power Party Leader) is preventing a drain in Lee Jae-myung’s support.
• Sung Han-yong analyzed, “Jang Dong-hyeok’s ‘We are Hwang Kyo-ahn’ sounds like a self-fulfilling prophecy.” Jang Dong-hyeok is likely to follow Hwang Kyo-ahn’s path. If he continues aligning with the far-right, he could be ousted before local elections—or face a crushing defeat even if he survives.
• Related Link.

Prosecutors in Revolt: Demotion to Rank-and-File Status?

• “We request further explanation”—authorities are considering demoting the 18 prosecutors’ office heads who issued this statement.
• Under the Prosecutors’ Office Act, prosecutors have only two ranks: Prosecutor General and prosecutor. Reassigning a chief prosecutor to a regular prosecutor position is not a formal disciplinary action, but it undeniably carries punitive weight.
• Jang Young-soo (Professor, Korea University) noted, “The criteria for collective insubordination remain unclear.” A legal professional interviewed by The Hankyoreh warned, “While blanket reprimands might be justified, enforcing personnel measures could lead to court defeats later.”
• Related Link.

Rewards and Punishments Are the Foundation of Organizational Management.

• “Surely it doesn’t mean we should only punish or only reward?”
• This was a post by Lee Jae-myung (Democratic Party Leader) on X (Twitter). He maintains that coup conspirators cannot be targets of reconciliation.
• Complaints have emerged that “the task force is attempting to forcibly access civil servants’ phones,” but a Prime Minister’s Office official explained, “This refers to verifying texts, messages, or Google timelines that support one’s claims—provided there is consent.”

Nam Wook’s Counterattack: Zero Confiscation Money.

• As prosecutors abandoned the appeal in the Daejang-dong case, Nam Wook (owner of Cheonhwa Dongin Unit 4), one of the co-conspirators, submitted a motion requesting the release of his confiscation preservation. The motion states that if not released, he will seek state compensation.
• Prosecutors had demanded seven years in prison and 101.1 billion won in confiscation from Nam, but the first trial court sentenced him to four years without confiscation.
• The assets of Kim Man-bae (major shareholder of Hwacheon Daeyu) and his associates, currently under court confiscation preservation, amount to 207 billion won. The first trial court ordered only Kim Man-bae to pay 42.8 billion won in confiscation, leaving the remaining 164.2 billion won without grounds for continued freeze.
• It was also confirmed that Nam Wook listed a property in Yeoksam-dong, purchased for 30 billion won in 2021, for sale at 50 billion won.
• Kim Man-bae is also likely to secure the remaining 84.2 billion won (excluding the 42.8 billion won). Civil lawsuits may follow, but courts rarely recognize confiscation amounts not upheld in criminal proceedings.
• Related Link.

Another Take.

Baek Hae-ryong: “The Joint Investigation Team Is Also Under Investigation.”.

• Baek Hae-ryong (Superintendent), dispatched to the joint investigation team probing customs-drugs allegations, issued a press release—not as the team but as an individual.
• “They are summoning incarcerated Malaysian couriers to retract their statements,” he claimed, adding, “This, too, should be investigated.”
• The Seoul Eastern District Prosecutors’ Office stated, “This was not an official press release—there is no formal position.”
• Related Link.

Why Mandatory Share Buybacks Are Opposed.

• The Democratic Party’s third proposed revision to the Commercial Act mandates compulsory share buybacks.
• Shin Jang-seop (Professor, National University of Singapore) opposes it for three reasons.
• First, the claim that holding treasury shares is solely for management defense is overly simplistic.
• Second, U.S. companies hold treasury shares on a far larger scale.
• Third, the assertion that buybacks necessarily boost stock prices remains unproven.
• Shin argues that a KOSPI 5,000-point target cannot be a policy goal. “The economy must be managed by focusing on real indicators like growth, employment, investment, and consumption.”
• Related Link.

U.S. Crew Aboard Australia’s Nuclear Submarines.

• This raises questions about how independently Australia can pursue foreign policy with nuclear submarines.
• Michael Green (Director, Center for the Study of American Politics, University of Sydney) noted, “The U.S. Congress approved nuclear submarine technology transfer to Australia on the assumption that it would side with the U.S. in a conflict with China,” adding, “U.S. trust in South Korea’s military readiness during a Taiwan Strait crisis is far lower than in Australia.”
• Even if Trump agrees, significant hurdles remain, including congressional approval and legal revisions.
• Related Link.

Reprocessing Nuclear Fuel Also Requires U.S. Congressional Approval.

• The delayed fact sheet release also stemmed from this sticking point. The convoluted phrase “supports procedures leading to civilian uranium enrichment and spent nuclear fuel reprocessing for Korea’s peaceful use” emerged for this very reason.
• Under the Korea-U.S. nuclear agreement, South Korea can only enrich uranium below 20% and reprocess spent fuel with U.S. consent. The goal is to secure blanket approval like Japan’s.

‘Sudden Surge’: $33 Billion for USFK, Cash Upfront for a Promissory Note?

• South Korea agreed to purchase $25 billion in U.S.-made military equipment and provide $33 billion in comprehensive support to USFK. Satellite Lock remarked, “It’s essentially tallying up what can be allocated to USFK over ten years.”
• The Hankyoreh pointed out, “This could effectively be a massive increase in defense cost-sharing.” South Korea’s current USFK defense cost-sharing contribution—around 1.5192 trillion won, or slightly over $1 billion—would see a threefold hike even if the $33 billion is spread over a decade.
• The phrase “cash upfront for a promissory note” arises because while payments to the U.S. are clear, what South Korea receives remains undefined. Even nuclear submarine support stayed at a declarative level.
• In an editorial, the Kyunghyang Shinmun noted, “Pledges like ‘maintaining peace and stability in the Taiwan Strait’ or ‘opposing unilateral changes to the status quo’ fuel suspicions that South Korea has taken another step toward aligning with U.S. efforts to counterbalance China.”
• Related Link.
• Related Link.

Will Platform Monopoly Regulations Be Abandoned?

• “The fact sheet included a commitment not to discriminate against or impose unnecessary regulations on U.S. companies in digital service laws and policies.”
• This likely reflects U.S. pressure, mindful of the Lee Jae-myung administration’s pledge to regulate online platforms.
• The People’s Solidarity for Participatory Democracy (PSPD) issued a statement arguing, “The Online Platform Monopoly Regulation Act (Onpl Act) applies equally to domestic platforms like Naver and Kakao and does not conflict with Korea-U.S. trade negotiations,” adding, “There is no justification for delaying it.”
• Related Link.

China: “Refrain from Travel and Study in Japan.”.

• Sino-Japanese relations have frozen solid. After Japanese Prime Minister Takaichi Sanae stated, “The Self-Defense Forces could intervene in a Taiwan contingency,” the Chinese Foreign Ministry denounced it as a “provocative remark” and issued a notice warning, “Significant risks to the safety and lives of Chinese citizens visiting Japan are emerging.”
• Chinese tourists visiting Japan numbered 7.48 million through September this year. Chinese international students stood at 130,000 as of June last year.

KOSPI Up 74%, Yet 37% of Listed Firms See Stock Declines.

• Stock market polarization is a global trend. The Nasdaq index rose 29% this year, yet more stocks fell than rose. The market cap share of the seven big tech firms in the S&P has reached 35%.
• Kim Hak-kyun (Shinyoung Securities Research Center Director) assessed it as “a product of excessive liquidity and the zombie capitalism it spawns.”
• The Federal Reserve’s assets as a percentage of GDP were around 5-6% before 2008 but have surged to 22% this year. That’s over three times more money in circulation.
• Structural adjustments are being delayed. Among South Korean listed manufacturers, 42% are zombie firms that cannot cover interest payments with operating profits. Central banks continue easing policies because bad debts aren’t being filtered out in time—a global phenomenon.
• Liquidity has increased, yet prices aren’t rising, partly for this reason. The flood of liquidity is pouring into asset markets, accelerating big tech rallies and asset polarization.
• Related Link.

The Fix.

Separate Regional Doctor Recruitment.

• This system reserves medical school seats through a special admissions process, requiring graduates to serve for a set period in designated regions. Tuition support is also provided.
• Implementation is planned as early as 2027, or by 2028 at the latest.
• The Korean Medical Association opposes it, arguing it “restricts fundamental rights like occupational freedom.” The government maintains there is no legal issue.
• Related Link.

Why Inheritance Tax and Low Birthrates Must Be Discussed Together.

• When families have many children, assets naturally disperse. Inheritance tax burdens were also lighter.
• With only one child, wealth transfer repeats itself. As of 2023, the top 20% of households already hold 63% of net assets. The gap between silver-spoon and common-born children widens.
• Woo Suk-jin (Professor at Myongji University) proposed, “We must re-establish societal consensus on what level of wealth transfer society can accept under the new reality of low birthrates, and what role inheritance tax should play within that framework.”
• “As demographics change, inheritance tax must change too. The starting point should not be how much to cut taxes, but an honest discussion about what kind of society we choose.”
• Related Link.

20% of 20–29-Year-Old Workers in Temporary Jobs Under a Month.

• This marks a significant increase from 17% in 2024. The figure has exceeded 20% for three consecutive months since August this year.
• Long-term unemployed (over six months) number 120,000—18% of the total 660,000 jobless. According to the Bank of Korea, each additional month of unemployment reduces employment probability by 1.5 percentage points.
• The number of youth “just resting” has reached 630,000. In an editorial, Chosun Ilbo criticized, “What future can a society have where young people are simply idle?”
• Related Link.

Buying a Home in Seoul Requires 14 Years of Salary Savings.

• PIR (price-income ratio) stands at 13.9 times the median annual income.
• Sejong records 8.2 times, Gyeonggi 6.9 times, Daegu 6.7 times, and Incheon 6.6 times.
• Homeownership rate is 61.4%.

ICYMI.

AI Paper Mills: Master’s Thesis for 12 Million Won.

• Over the past five years, 204 papers suspected of using generative AI have been retracted.
• When Dong-A Ilbo contacted one company, they quoted 2.79 million won.
• Prices vary wildly. Other paper mills charge 30 million won for doctoral theses and add a 20% premium for Seoul National University.
• Critics suggest the number of undetected AI-generated papers is far higher.
• Related Link.

Kickboards and Kick-Roos.

• Kick-Roo refers to e-scooters that suddenly appear like roe deer. Kim So-hee (People Power Party lawmaker) recently proposed the so-called “Kick-Roo Ban Act,” which would completely prohibit electric scooter operation.
• Electric scooter traffic accidents reached over 2,300 cases in 2023, with 34% involving unlicensed drivers.
• Kim So-hee emphasized, “They have effectively become mobile weapons,” adding, “fundamental elimination is unavoidable.”
• Related Link.

Fake Growth Built on “Register Later.”.

• Shared kickboard company Zybaike recorded sales of 80.4 billion won and operating profit of 6.9 billion won last year. Though hailed as a unicorn startup, it had a critical flaw.
• Anyone with a smartphone can rent one, but without a Class 2 or higher motorcycle license, they face a 100,000 won fine for unlicensed driving. Not wearing a helmet adds another 20,000 won.
• Ahn Jae-man (Chosun Biz Capital Market Editor) noted, “The secret to explosive growth lay in ‘Register Later.’” By allowing rides before mandatory registration, users surged—but it existed in a “gray zone of safety and law.”
• “Investors analyzed data and financials thoroughly but turned a blind eye to the underlying ‘social risks.’ User safety management, legal compliance, and ethical operations weren’t reflected in the numbers—and that oversight invited tragedy. (Omitted) For capital to truly drive innovation, the habit of looking beyond the numbers is essential.”
• Related Link.
• Related Link.

Han River Bus Veers Off Course, Scrapes Riverbed and Runs Aground.

• There was a loud impact, according to reports. 82 passengers evacuated via 119 rescue boats.
• Park Jin-young (Seoul Metropolitan Government Future Han River Headquarters Director) initially claimed “the route was followed” but reversed course a day later, stating “the vessel strayed beyond buoys into shallow waters.”
• It had resumed operations just two weeks after a month-long inspection.
• Seo Seo-hoon (Seoul Mayor) apologized for “causing anxiety and inconvenience” but countered, “It is unwise to weaponize safety concerns for political attacks.”
• Han River Bus operations will remain suspended until the 18th.

Worth Reading.

Does the Presidential Office Have a Red Team?

• According to the Hankyoreh, the Presidential Office reportedly received post-facto notification of the prosecution’s decision to abandon the appeal in the Daejang-dong case.
• Lee Choon-jae (Hankyoreh columnist) pointed out, “Can the Senior Civil Affairs Office properly function as a red team if it only receives reports after the fact?” The critique—“If the Senior Civil Affairs Office fails as a red team, public sentiment drifts from the administration”—leaves two questions.
• First, had the Senior Civil Affairs Office received prior reports, would it have advised against abandoning the appeal?
• Second, should the Senior Civil Affairs Office have received prior reports in the first place?
• Related Link.

Coupang’s Mass Overwork Deaths and Government Abandonment of Duty.

• “We will create a world where people say, ‘How did we live without Coupang?’” This was Kim Beom-seok (Coupang CEO) speaking.
• Hong Jin-su (Kyunghyang Shinmun Social Affairs Editor) pointed out, “The core issue is not the phenomenon of dawn delivery itself, but the structure of Korea’s labor market where this has become the best available option.”
• “We must ensure people do not die from work. Regular health checkups should be mandatory, and far stronger rest periods and night-shift allowances must be guaranteed than for daytime labor. In the long term, we must advance toward a society where they do not have to ‘sell their health.’ This is a larger, more fundamental discussion: creating better daytime jobs, bringing platform workers into the formal system, and expanding the social safety net.”
• Related Link.

Good Papers Written with AI Assistance.

• In the past, academic research began by connecting confirmed propositions like A=B and B=C to derive the hypothesis that A=C.
• Now, one can casually feed the conjecture A=C into AI and command it to find the logic. One can even order it to generate plausible hypotheses. Skillfully using AI is a capability, but what does it have to do with academic creativity?
• While one cannot simply copy AI-generated text, adding one’s own ideas to create new perspectives and expressions can earn high marks. School reports and academic papers are now difficult to evaluate based solely on results.
• Kang Hyung-chul (Professor at Sookmyung Women’s University) emphasized, “AI cannot make value judgments about what is newly needed or what is newly important.”
• Kang Hyung-chul’s question has no answer: “Now, the ability to write papers depends not on reading and inquiry but on how well one uses AI. What about literacy and value judgment, which are cultivated through writing and deep reading?”
• Related Link.

Trump-Kim Summit: Will South Korea Remain a Spectator?

• Kim Yeon-chul (former Unification Minister) emphasized, “The area requiring all diplomatic focus now is South Korea-China relations.”
• Donald Trump (U.S. President) and Kim Jong-un (North Korean State Affairs Commissioner) are highly likely to meet around the time of the U.S.-China summit next April. In 2019, South Korea played a mediator role, but this time, many speculate that China will step forward.
• Kim Yeon-chul proposed, “It is time to begin a four-party summit involving South-North-U.S.-China simultaneously or sequentially, with South Korea persuading the U.S. and China persuading North Korea through strategic communication between South Korea and China.” “This is an era where traditional alliance dependence cannot suffice.”
• Related Link.