China Halts Rare Earth Exports to Japan.

• Protest over Takaichi Sanae’s (Japanese Prime Minister) Taiwan remarks, though the timing is suspiciously convenient.
• The measure follows her proposal to Lee Jae-myung (President), visiting Beijing, to “emphasize healthy competition and cooperation” and “uphold international fairness and justice through multilateralism and free trade.”
• Japan relies on China for 60–70% of its rare earths. Speculation arises of a South Korea–U.S.–Japan divide-and-conquer strategy.

“I Was Kidnapped.”.

• Nicolás Maduro (President of Venezuela) said this in court. “I am innocent. I cannot accept any charges as guilty.”
• As he was being escorted out, a spectator shouted, “You will pay for your crimes,” to which he retorted: “I will surely reclaim my freedom. I am a kidnapped president, a prisoner of war.”

What Matters Now.

“Inviolability of Borders Not Subject to Negotiation.”.

• These were the words of Christiana Marcussen (Denmark’s Ambassador) at the UN Security Council meeting.
• China and Russia strongly criticized the U.S., and António Guterres (UN Secretary-General) also noted, “The rules of international law have not been respected.”
• There is not much the UN can do. The permanent members are the U.S., China, Russia, the UK, and France. If even one country exercises its veto, the resolution is rejected.

Trump’s Approval Rating Rises.

• Rebounded from 39% in December to 42%. Reuters-Ipsos poll.
• Assessment: Venezuela attack consolidated his base.
• Shares of Chevron, ExxonMobil, and other oil-related companies also surged.

KOSPI 4,525.

• The index has broken its record high for three consecutive days.
• Samsung Electronics and SK Hynix also surpassed 130,000 won and 720,000 won per share, respectively.
• Individual investors net-bought 597.6 billion won, while foreign investors net-sold 618.4 billion won.

S&P 500 Index Hits 6,945.

• It’s another all-time high.
• Expectations for AI growth are soaring.

Deep Dive.

Heading Toward Lee Hye-hoon.

• Jeong Cheong-rae (Democratic Party Leader) appeared on “Kim Eo-ju’s News Factory” and said, “We must help ensure the president makes the right decision.”
• Jang Cheol-min (Democratic Party Representative) said, “There’s a palpable skepticism about whether he can go all the way,” adding, “Withdrawing the nomination also seems inappropriate.” This implies he should resign voluntarily.
• The Blue House has taken the stance of waiting until the confirmation hearing, but no date has been set yet. The Finance Committee chair is Lim Yi-ja (People Power Party Representative), who is likely to delay the schedule to wage a public opinion campaign.

Kim Byung-ki Holds Firm.

• Park Ji-won (Democratic Party Representative) bluntly warned, “Waiting for the audit results will be too late. Sometimes, you need ruthless leadership to save the organization.” This is about Jeong Cheong-rae needing to make a decision.
• Jeong Cheong-rae said, “It’s closer to human error than a system error,” but added, “I think Kim Byung-ki will make the comprehensive judgment.”

Did Police Report Investigation Details to Kim Byung-ki?

• During the investigation into allegations that Kim Byung-ki’s (former Democratic Party floor leader) wife used a Dongjak-gu Council corporate card, a statement emerged that investigative materials were leaked to Kim Byung-ki.
• Dongjak Police Station received a petition but did not assign the case for two months. It was ultimately closed at the preliminary stage due to insufficient evidence.
• According to The Hankyoreh, Kim Byung-ki also had multiple Telegram calls with the Dongjak Police chief in front of his aides.
• Related Link.

Another Take.

Thaw in Korea-China Relations? Sensitive Issues Avoided.

• Denuclearization of the Korean Peninsula was not mentioned, and the conflict over the West Sea structures was temporarily shelved. Observers widely agree that lifting the Hanhan Order will remain difficult for the time being.
• They posed for selfies and the atmosphere was not bad, but no joint statement was issued.
• According to a Blue House official, Xi Jinping reportedly said, “Three feet of ice does not melt at once, and fruit falls when ripe.”
• Kang Yu-jeong (Blue House Spokesperson) said, “Xi Jinping seemed unaware of the West Sea structures,” adding, “Progress has been made to the point of discussing the matter practically.”
• The JoongAng Ilbo headlined on its front page, “Externally Courteous, Internally Reproachful.” Indeed, the Chinese statement included numerous expressions like “must firmly stand on the right side and make the correct strategic choice,” using terms such as ‘应’ (should) and ‘要’ (must).
• Related Link.
• Related Link.

“Not the Time for Celebratory Gunfire.”.

• In an editorial, Hankook Ilbo warned, “The real economy remains frozen, but if only asset markets are hot, polarization will widen.”
• We must guard against the semiconductor illusion. “Do not neglect structural reforms just because the index is intoxicating,” it cautioned. Overcoming entrenched low growth is also urgent.
• JoongAng Ilbo also warned in an editorial, “A stock rally disconnected from the real economy could deepen structural polarization.”
• Related Link.
• Related Link.

Why Trump’s Venezuela Operation Is Illegal.

• If the U.S. government had arrested Chun Doo-hwan (then Army Security Command chief) in May 1980, would South Koreans have protested it as a violation of sovereignty? A complex and uncomfortable question.
• Una Heatherway (Yale professor) broke it down in a Q&A with The New Yorker.
• Even if Maduro supported or controlled drug traffickers—as the U.S. claims—it cannot justify a military attack. Drugs are a serious issue. But if drug trafficking becomes a pretext for self-defense, it could legitimize attacking other countries over epidemics or other excuses.
• What if Maduro is not a legitimate president? If he is not a head of state, immunity would not apply—but even then, it cannot justify attacking another sovereign nation by force.
• Isaac Cotiner (New Yorker journalist) noted, “It’s terrifying that Trump thinks he can decide another country’s head of state.” Una Heatherway added, “If we accept that a leader can invade a country simply because they deem its leader illegitimate and install a friendly figure, it means all legal constraints on military force will disappear.”
• Una Heatherway called it “a catastrophic shift from a world that resolves issues peacefully to one that uses military force.”
• “The bigger problem is that Trump doesn’t care about breaking these rules. He’ll act on what he deems justified by his own logic—and that’s the most frightening part.”
• According to BBC and others, many Venezuelans welcome the move. “Trump gave us freedom,” some say. Years of suffering under Maduro’s mismanagement are undeniable. But one fact remains: no one asked the U.S. to act as the world’s judge. If Maduro must go, it should be Venezuela’s decision. Trump’s arbitrary “justice” is not only dangerous but likely to escalate risks further.
• Related Link.
• Related Link.

The Fix.

Health Insurance Paid 101 Trillion Won in Hospital Bills Last Year.

• It was 51 trillion won in 2016—doubling in a decade.
• According to OECD health statistics, South Korea leads with 18 outpatient visits per person annually.
• Total annual medical spending reached 213 trillion won, with healthcare costs accounting for 8.4% of GDP.
• In 2024, insurance premium revenue is 84 trillion won, while expenditures are 93 trillion won. Though reserves near 30 trillion won remain, they will soon be depleted.
• Moon Sung-woong (Health Insurance Research Institute Research Center Director) said, “We must consider ways to secure funding.” Kwon Jeong-hyun (KDI Research Fellow) added, “Outpatient clinic fees must be managed appropriately.”

Pension Liabilities to Hit 1,820 Trillion Won by 2095.

• National Pension premiums will rise from 9.0% to 9.5% starting this year. A salaried worker earning 3.09 million won monthly will pay an additional 7,700 won. Local subscribers will pay an extra 15,400 won.
• The premium rate will increase by 0.5 percentage points annually, reaching 13% of monthly income by 2033.
• According to the National Pension long-term financial outlook, all funds will be depleted by 2064. The unfunded liability—the total amount of pensions to be paid over 70 years—reaches 645.8 trillion won.
• The JoongAng Ilbo warned, “Including the National Pension’s unfunded liability, the national debt ratio could exceed 300% of GDP by 2095.”
• Calls are growing to introduce an automatic adjustment mechanism.
• The unfunded liabilities for civil servant pensions and military pensions stand at 1,052 trillion won and 260 trillion won, respectively.

ICYMI.

80,000 Flee KT.

• Just seven days after waiving cancellation fees.
• The marketing war has ignited. Even negative-phone deals—cash bonuses for switching numbers—have emerged.

National Assembly’s Sejong Complex to Open in 2029.

• Plans to develop the national symbolic zone, including the presidential Sejong office, will be finalized by June.
• After Lee Jae-myung (President) expressed a desire to expedite the project, authorities are considering moving up the timeline by 10 months.
• The government is also reviewing the construction of a Chungcheong-wide express rail (CTX) connecting the Daejeon government complex to Sejong complex-Cheongju International Airport. Travel time from Seoul Station to Sejong complex would be 1 hour and 15 minutes without transfers.

This Year’s CES Keyword: Physical AI.

• AI has acquired a body. Jensen Huang (NVIDIA CEO) declared, “The ChatGPT moment for physical AI has arrived.” The forecast: “Physical AI that understands, reasons about, and plans actions in the real world will open an entirely new era.”
• Hyundai Motor plans to deploy Atlas, built by its subsidiary Boston Dynamics, on production lines in two years. It can work in extreme environments from -20°C to 40°C. It lifted a 50kg box with ease.

Tim Walz’s Defeat.

• Tim Walz (Minnesota Governor), Kamala Harris’s (former U.S. Vice President) vice presidential running mate, has abandoned his bid for a third term—effectively announcing his retirement from politics.
• The FBI is thoroughly investigating allegations of misuse of welfare program funds in Minnesota. Walz stated, “I cannot ask residents to spend their time defending me.”
• Trump denounced, “A corrupt governor has ruined Minnesota.”

Worth Reading.

Exchange Rates Are Symptoms, Growth Is the Issue.

• A thermometer only tells us there is a fever, not why it exists. Fever reducers lower temperature but don’t cure the root cause.
• The exchange rate debate is no different. Exchange rates reflect confidence in growth. South Korea’s potential growth rate is 2%, yet actual growth falls short.
• Lee Yoon-hak (CEO of Prism Investment Advisory) emphasized, “We don’t need fever reducers—we need stamina.”
• Related Link.

Local Elections Are Not a Midterm Assessment for the President.

• Ha Sang-eung (Sogang University Professor) pointed out, “The problem lies in viewing local elections not through a local lens but as an extension of central politics.”
• Naturally, all elections carry a midterm assessment character. However, the point is to reflect on the dynamism of politics closely tied to residents’ lives.
• Related Link.

Who Threw the Dead Cat at Lee Hye-hoon?

• “Throw a dead cat on the table and people will be shocked and disgusted, but it doesn’t matter. Because they’ll stop talking about the problem that was bothering you.” These were the words of Boris Johnson (former UK Prime Minister).
• Lee Hye-hoon (nominee for Minister of Economy and Finance) appears to have either bypassed minimal verification procedures or ignored known flaws. Ahn Hye-ri (JoongAng Ilbo columnist) suggests Lee Hye-hoon might be a card for shifting the narrative—a possible dead cat.
• Related Link.