“Media Distorted Surplus Tax Revenue as Excess Profit Dividends.”.

• Lee Jae-myung (President) unleashed strong criticism, even using the phrase “malicious fake news.”
• When Bloomberg pointed out that “Kim Yong-beom’s remarks shook stock prices,” citing his claim that “in the AI era, surplus profits must be structurally returned to the people,” the controversy grew as many media outlets parroted the report.
• While Kim Yong-beom (Blue House Policy Chief) did use the term “citizen dividend,” he drew a line, stating, “If no surplus tax revenue is generated, the citizen dividend is an empty promise.”
• Lee Jae-myung noted, “Political criticism or blame harms democracy if it lacks factual basis.”
• Related Link.

How Much Surplus Tax Revenue?

• Corporate tax revenue is projected to rise from 85 trillion won last year to 120 trillion won this year.
• The combined corporate tax from Samsung Electronics and SK Hynix alone could exceed 100 trillion won.
• Surplus tax revenue refers to tax collections exceeding the government’s budget.
• In 2021 and 2022, surplus revenues were 61 trillion won and 53 trillion won, respectively—this year’s could be even higher.
• The discrepancy between budgeted and actual national tax revenue is expected to reach 32 trillion won this year, with a strong possibility of further growth next year.
• Kim Yong-beom’s proposal was about how to effectively use the sudden influx of hundreds of trillions in tax revenue—a debate that has veered off course.
• Daeshin Securities forecasts that the combined operating profit of Samsung Electronics’ semiconductor division and SK Hynix will grow from 61.1 trillion won this year to 77.8 trillion won next year.
• Hong Sung-kook (former Daewoo Securities president, ex-Democratic Party lawmaker, Hyean Research CEO) said, “The two companies’ profits are expected to reach 150 trillion won over three years. We’ve never seen this much money earned in such a short period in our history. It’s a ‘historic dividend’—we should use it historically well.”
• If surplus tax revenue could reach hundreds of trillions, it would be stranger still to discuss it not at all.
• Related Link.

What Matters Now.

Samsung Electronics Post-Mortem Adjustments Also Collapse.

• One week remains until the 21st, the date the strike was announced. The gap in positions is wide.
• The Samsung Electronics strike also cannot be discussed separately from the semiconductor supercycle. According to the union’s demands, this year’s performance bonus alone could reach 45 trillion won, and it may increase further next year. While astronomical investments are needed, it is also true that cash reserves are sufficient.
• The union is demanding the abolition of the 50% OPI (excess profit bonus) cap and that 15% of operating profit be allocated as performance bonuses.
• The National Labor Relations Commission (NLRC) proposed 12% as a compromise.
• A court injunction decision remains pending.
• Choi Seung-ho (Samsung Electronics Union Chairperson) said, “As we have legitimately obtained the right to strike, we will proceed with dispute actions lawfully.”
• Criticism also arises that the performance bonus calculation criteria lack transparency. EVA (Economic Value Added) is the value after deducting capital costs from post-tax operating profit, but Samsung Electronics has never disclosed its calculation method. This is why the union insists on institutionalizing performance bonus ratios based on operating profit.

Will Emergency Mediation Be Invoked?

• Emergency mediation is an exceptional measure triggered when there is a risk of significant harm to public life or the economy.
• It has been invoked only four times: during the 1969 Korea Shipbuilding Corporation strike, the 1993 Hyundai Motor strike, and the 2005 pilot walkouts at Korean Air and Asiana Airlines.
• If emergency mediation is activated, labor disputes must be suspended for 30 days while the National Labor Relations Commission imposes mandatory arbitration.
• Kim Young-hoon (Minister of Labor) drew a line, stating, “Labor-management dialogue is necessary.”

Samsung Electronics Strike, Media’s Proxy War.

• Chosun Ilbo argued in an editorial, “If semiconductor lines are left at risk, it is a dereliction of duty by the government,” insisting, “Emergency mediation must be invoked to prevent catastrophe and produce a fair settlement.”
• JoongAng Ilbo echoed the same tone as if by agreement: “Allowing the worst-case scenario—customer defections and supply chain damage—during this rare semiconductor supercycle is nothing short of national negligence.” It added, “Even a signal that the government is considering emergency mediation could pressure both sides to negotiate at the eleventh hour.”
• JoongAng Ilbo raised the estimated strike losses to 40 trillion won.
• The Hankyoreh pointed out in its editorial, “Samsung Electronics has touted its ‘low base pay, high performance bonus’ system as a strength in workforce management, but internal discontent has grown as wages fall below industry averages when performance bonuses are withheld.” It acknowledged that the union’s demands have merit.
• Related Link.
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Growth Forecast Rises from 1.9% to 2.5%.

• KDI analysis. Semiconductors overshadow Middle East risks. Growth exceeds potential rate of 1.7%.
• Private consumption rises 2.2%, equipment investment 3.3%. Exports expected to grow 4.6%.
• Related Link.

Employment Rate Drops After 16 Months.

• April employment rate: 63.0%. Number of employed increased by 74,000 compared to same month last year—smallest rise in 16 months.
• 15–29 youth employment rate: 43.7%. Lowest level since April 2021.
• Result of rising oil prices due to U.S.-Iran tensions and worsening domestic sentiment. May employment conditions could be even worse.
• Related Link.

Second-Half National Assembly Speaker: Cho Jung-sik.

• Cho Jung-sik (Democratic Party lawmaker), dubbed the “authentic leader,” was elected after defeating Kim Tae-nyeon (Democratic Party lawmaker) and Park Ji-won (Democratic Party lawmaker). The result combined 20% online voting by party members and 80% in-person voting by lawmakers.
• The Hankyoreh analyzed, “The outcome reflects ‘the weight of reputation.’” A Democratic Party lawmaker remarked, “Freshmen lawmakers appointed during Lee Jae-myung’s leadership could not ignore the president’s signals.”
• The Korea Daily predicted, “The likelihood of intensified partisan conflict outweighing cooperation is high.”
• Related Link.
• Related Link.

Deep Dive.

Trump’s China Visit: Jensen Huang Joins the Delegation.

• Trump reportedly called Jensen Huang (NVIDIA CEO) directly to extend the invitation. He joined Air Force One at the layover in Alaska.
• Elon Musk (Tesla CEO) and Tim Cook (Apple CEO) also accompanied the trip. Tesla operates a factory in Shanghai, and Apple remains heavily dependent on Chinese supply chains.
• The delegation included the “Big Three” cabinet heads: State, Defense, and Treasury secretaries.

Rubio’s Maduro Arrest Look.

• China changed the spelling of Marco Rubio (U.S. Secretary of State) from ‘盧比奧’ to ‘魯比奧’ after his appointment. He remains on the sanctions list from his Senate days, with no resolution yet.
• Rubio’s appearance in a Nike tracksuit—allegedly the same one worn when Nicolás Maduro (former Venezuelan president) was arrested—is seen as a deliberate provocation. Some suggest it was a calculated move to antagonize Beijing.

A Topic Too Heavy for a 2-Day, 3-Night Summit.

• Iran and Taiwan are the most contentious issues.
• The U.S. is urging China to help lift the blockade of the Strait of Hormuz.
• China, which imports oil from Iran, is keeping its distance.
• Analysts suggest Trump might concede on Taiwan if Beijing demands it—
• a sign of how desperate his situation has become.

Xinhua’s Four Deadlines.

• First, the Taiwan issue. Second, democracy and human rights. Third, systems and policies. Fourth, development rights.
• As state-run media, this reflects the Chinese government’s stance. It emphasized, “One must not harbor illusions that while interfering in Chinese internal affairs and harming Chinese interests, Beijing would cooperate on agendas prioritized by Washington.”

Another Take.

Is the Gap Narrowing?

• Polls show the gap in Seoul has narrowed to single digits, but it remains outside the margin of error.
• Daegu, Busan, and Gyeongnam are in a tight race within the margin of error.
• A Democratic Party lawmaker interviewed by The Hankyoreh analyzed, “Overall, Jeong Won-o (Democratic Party Seoul mayoral candidate) is losing issue leadership.”
• Jeong proposed, “Temporarily reduce property tax increases for one-homeowners without income.”
• Chosun Ilbo analyzed, “Conservative voters are rallying amid the Special Act on Manipulation Prosecution controversy.”

“Where Should I Go?”.

• Kim Min-seok (Prime Minister) reportedly said this while having a meal with Democratic Party lawmakers, during a discussion about the distribution of standing committee chair positions.
• A lawmaker present remarked, “If you say that, it could lead to articles claiming you’re preparing for the party convention.” Though the comment was brushed off with laughter at the time, speculation dominates that Kim is indeed eyeing the party leadership. There are also rumors of a recent uptick in his “dining diplomacy.”
• Lee Jung-kye (Democratic Party leader) is no pushover. Under the pretext of supporting candidates, he has been crisscrossing the country to meet party members—yesterday, he even visited Ulleungdo. When pointed out that “a party leader’s visit to the Yeongnam region could galvanize conservative voters,” he retorted, “I’ll manage my own schedule, and the media should refrain from interference.”
• Kang Hoon-sik (Chief of Staff to the President) and Kim Yong-min (Democratic Party lawmaker) are also mentioned as potential candidates for party leadership.
• Related Link.
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The Fix.

Surviving Dogs, No Space to Care.

• Dogs from a dog farm in Uljin died in a wildfire. Animal groups took in the survivors.
• There are 178 private animal shelters housing over 20 animals each.
• Under the Farmland Act, dog farms are permitted, but animal shelters are illegal. Kim Young-hwan (animal rights activist) pointed out, “Private shelters that rescue abandoned or abused pets are being ordered to close, demolish, and fined for noncompliance.”
• “Demanding that private shelters remain operational is not asking for special treatment. It is a plea not to sever the lifeline of rescued animals who have suffered unjustly. What pet policy could be more urgent or essential than this?”
• Related Link.

To Die Where One Lives.

• Dying with dignity requires either wealth or luck.
• The Netherlands’ ‘Bijna Thuis Huis’ (Almost Home House) is a community-established ‘end-of-life residence’ that maintains a thoroughly non-medical, everyday environment. Here, patients are not admitted—they are guests.
• Kim Sang-doo (care housing activist) emphasized, “For community-based end-of-life care outside hospitals to become possible, there must be sufficient family dialogue and consensus, neighbors and communities to sustain daily life, and a locally rooted care and medical system to support it.”
• Related Link.

ICYMI.

Shin Ramyun: 40 Years, 20 Trillion Won in Sales.

• 4.25 billion units sold. If laid end-to-end, the noodles would stretch 6 round trips to the sun.
• Last year, overseas sales accounted for 40% of Nongshim’s 3.5 trillion won revenue. Jo Yong-cheol (Nongshim CEO) stated, “By 2030, we aim to achieve 7.3 trillion won in sales with 60% from overseas markets.”
• Related Link.

Korean Air-Asiana Airlines Merger Approved on December 17.

• Merger approval came 5 years and 6 months after the acquisition agreement.
• The merger ratio is 1:0.27. All of Asiana Airlines’ assets and liabilities will be assumed.
• Mileage programs will also be integrated.

Clams Are Scarce.

• At a tidal flat farm in Taean, Chungnam, daily catch dropped from 80kg to less than 20kg.
• Sea surface temperatures along the west coast rose from 14.9°C in 2021 to 15.5°C last year.
• Clam production fell from 43,000 tons to 39,000 tons—peaking at 90,000 tons in the early 1990s.

Worth Reading.

A Person Without Margin Is Like Unrisen Bread.

• “The tone of saying, ‘I have prepared such a large loaf of bread for you who are starving’ is dangerous. A hard, large loaf can also be used like a club.”
• This is an era where margins have disappeared. Jo Eun (poet) emphasized, “Relationships without line breaks can make us sick like ultra-processed foods” and “The margin left unsaid—where one does not speak everything—has immense power to make one listen and draw close to existence.”
• Related Link.

Welfare in the AI Era Means Guaranteeing First Careers.

• “If population decline is a ‘crisis of totality,’ the disappearance of new hires is a ‘crisis at the entry point.’ If a society without newborns threatens the nation’s survival in the mid-to-long term, a society without new hires weakens businesses, the economy, and communities in the short-to-medium term.”
• A world where it’s said to be better to increase AI subscriptions than train new hires.
• Lee Jeong-dong (Seoul National University professor) warned, “Just as a society that doesn’t give birth loses its future, a society that doesn’t hire new employees loses its present.”
• The solution? A proposal to gain paid practical experience in public and private projects after university graduation, then use that career as a stepping stone to the next stage. Lee Jeong-dong emphasized, “Labor policy in the AI era isn’t about managing unemployment rates—it’s about designing a system that provides opportunities for society to regenerate careers on its own.”
• Related Link.