“Mishandle Taiwan, and Conflict Ensues.”.

• Xi Jinping (Chinese President) said this to Donald Trump (U.S. President) during their meeting at Tiananmen Square yesterday, when Trump visited Beijing.
• Xi emphasized, “Taiwanese independence and cross-strait peace are as incompatible as water and oil,” adding, “safeguarding peace and stability in the Taiwan Strait is a common denominator for both China and the U.S.”
• Trump gave a non-sequitur response: “What a wonderful place, China is truly beautiful.” He avoided answering any questions on Taiwan.
• According to The Guardian, the U.S. official stance is “not supporting (not support) Taiwanese independence,” but there is a possibility it could shift to “opposing (oppose) it.”

What Matters Now.

No Imperial Protocol.

• Courtesies were observed, but the scale was smaller than nine years ago.
• With a schedule of lunch at Zhongnanhai today and a return flight in the afternoon, time was limited.
• While some speculated it would be a historic showdown, no grand deal materialized.

Two Meetings in One.

• Subtle differences emerged. The U.S. stated, “We agreed the Strait of Hormuz must remain open,” while China drew a line, saying, “We exchanged views.”
• “Both believed they could extract something from the other—but those ‘somethings’ were entirely different,” said Ryan Hass (Brookings Institution researcher). The U.S. talked investment and negotiations; China focused on Taiwan and strategic stability.
• Related Link.
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Can the U.S. Accept a $1 Trillion Chinese Offer?

• Will Trump accept Xi Jinping’s proposal? The U.S. has so far restricted Chinese investments.
• Semiconductors are off-limits, as are artificial intelligence, biotechnology, and aerospace—few sectors remain on the whitelist.
• Xi’s remark that “China’s great rejuvenation and Trump’s MAGA are compatible” could be a veiled pressure to lower trade barriers.
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Xi’s Warning of the Thucydides Trap.

• It’s a story from ‘The History of the Peloponnesian War.’ Sparta waged war on Athens out of fear. Once a clash between a dominant power and a rising one begins, it becomes unstoppable.
• Xi’s mention of the ‘Thucydides Trap’ is a veiled warning. His analogy—placing the U.S. as Sparta and China as Athens—is sly. Athens lost that war, but Xi’s framing implies he sees China as the rising power.
• It’s a high-stakes political statement that frames the U.S.-China rivalry as an equal confrontation and shifts blame for tensions to the U.S.
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“Emergency Mediation Inevitable if Samsung Electronics Strikes.”.

• Kim Jung-kwan (Minister of Trade, Industry and Energy) said this.
• The emergency mediation authority is triggered by the Minister of Employment and Labor. Kim Young-hoon (Minister of Employment and Labor) maintains, “Labor-management consultation is necessary.”
• Chosun Ilbo and others emphasize analyses that losses could reach 100 trillion won.
• Samsung Electronics has begun a ‘warm-down’ process, gradually reducing its operational rate.

Deep Dive.

Why Taiwan Matters.

• The Wall Street Journal analyzed, “Taiwan is a critical hub supporting U.S. leadership in artificial intelligence.”
• TSMC built a factory in Arizona, but its advanced facilities remain in Taiwan. To use Blackwell Papers made in the U.S. for AI systems, they must cross the Pacific again for advanced packaging processes like CoWos (Chip-on-Wafer-on-System).
• “Taiwan’s strength lies not just in a single company or factory. It’s a cluster where foundry, packaging, substrate, materials, equipment, testing, and design experts are densely concentrated. This density shortens iteration cycles, boosts yield rates, accelerates mass production, and accumulates tacit knowledge. Even with massive subsidies and political urgency, decades of operational know-how cannot be bought overnight.”
• The U.S. wants to sell weapons to Taiwan but will likely face strong backlash from China.
• Related Link.

Heavy Transfer Tax Takes Effect: Gangnam District Reverses Course.

• Seoul apartment prices rose by 0.28%. Even Gangnam District, the only area in Seoul that had been declining, has turned around.
• Nam Hyuk-woo (Woori Bank researcher) analyzed, “Many potential buyers who had been waiting to see if additional distressed properties would emerge have now entered the market as buyers, causing the price increase to widen again.”

Rent Hikes Drive Home Prices: 1% Lease Increase Equals 0.98% Sale Price Jump.

• The Korea Research Institute for Human Settlements (KRIHS) analysis. The effect materializes after a 3–9 month lag.
• KRIHS pointed out, “To break the vicious cycle, jeonse loans must be gradually reduced.” Their conclusion: “The private-public rental supply structure should be rationalized, and tenant tax benefits—currently skewed toward jeonse—must be adjusted to avoid disadvantaging monthly renters.”

Another Take.

What’s the Truth Behind Jung Won-o’s 1992 Assault Case?

• There is a 1995 assault case in which he was fined 3 million won. He even assaulted a police officer who arrived at the scene.
• Jung Won-o (Democratic Party Seoul mayoral candidate) claimed, “It happened during a 5.18-related argument,” but the People Power Party brought up 31-year-old Yangcheon District Council records.
• Jung was working as a secretary to the Yangcheon District mayor at the time. The records state that Jung forced entertainment establishment staff to stay overnight, leading to a dispute with a customer who tried to intervene.
• Joo Jin-woo (People Power Party lawmaker) also presented a victim’s recorded testimony: “There was no 5.18 argument. He never apologized.”
• Song Eun-seok (People Power Party floor leader) criticized, “He’s exploiting 5.18 to glorify violence.”
• Jung insisted, “It’s in the ruling document.” The document states, “They were discussing political matters and, due to differing affiliations, voices were raised, leading to a fight.”
• Kim Seok-young (then Yangcheon District mayor’s secretary general, present at the scene) explained, “I was the one who lost my temper during a 5.18-related argument and led the assault. Jung was dragged into the incident while trying to resolve the situation.”
• Related Link.

Was There a Collusion on Egg Prices?

• The Fair Trade Commission imposed a 590 million won penalty on the Korea Egg Producers Association.
• According to the FTC analysis, the production margin per 30 eggs rose from 781 won in 2023 to 1,440 won last year.
• Production volume increased by 2.76 million eggs and production costs fell by 5%, yet consumer prices rose by 4.6%.

55% of Teachers Considered Quitting in the Past Year.

• Three major teachers’ unions decided not to attend Teachers’ Day events, citing insufficient measures to protect educational authority.
• This is due to the Ministry of Education’s push for a joint declaration on educational recovery, which has not been discussed with the unions.
• Some groups argue that violations of educational authority should be recorded in student records. There is also significant discontent over Lee Jae-myung (president) comparing schools avoiding field trips to “destroying a jar for fear of maggots.”

Hana Financial Group-Meritz Securities: What’s Next?

• Seoul Regional Tax Office’s Investigation Division 4 has launched a special tax audit on Hana Financial Group and Meritz Securities. Known as the “grim reaper,” the division is probing specific allegations including slush fund creation, embezzlement, and tax evasion.
• Hana Financial Group recorded 1.2 trillion won in net profit for Q1 this year. Controversy also surrounds the 5 billion won retirement merit payment made to Kim Jeong-tae (former Hana Financial chairman).
• Meritz Securities has signs of tax evasion in project financing. Converting capital reserves to retained earnings for reduced dividends also drew criticism after Cho Jung-hoo (Meritz Securities chairman) received 362.6 billion won tax-free. Kya Kyu-geun (Lawmaker, People’s Innovative Party) even proposed the “Cho Jung-hoo Prevention Act.”
• Related Link.

The Fix.

Sorting Recyclables Cuts Waste Weight by 30%.

• Resource Circulation Network analyzed contents from 20 garbage bags.
• Hygiene vinyl, Spam cans, and plastic gloves are all recyclable waste.
• Park Se-won (Seoul Research Institute researcher) noted, “Recyclable resources among Seoul’s municipal waste rose from 39% in 2014 to 60% in 2024.”
• Kyunghyang Shinmun emphasized, “Reducing waste volume must precede new incinerator construction.”

Norway’s Sovereign Wealth Fund: 3,250 Trillion Won.

• Funds come from corporate taxes collected from oil and gas companies. Taxes collected last year amounted to around 61 trillion won.
• Fluctuations are significant, ranging from 17 to 209 trillion won depending on international oil prices. 71% is invested in overseas assets.
• Withdrawals are made at around 3% of the expected return, amounting to about 94 trillion won this year.

ICYMI.

Tesla’s Autonomous Driving Surpasses 10 Billion Miles.

• 16 billion km—enough to travel between Earth and the Sun more than 50 times.
• Combined, South Korean companies have logged 13.06 million km.

Text Bombs Cost 300,000 Won, Feces Terror 450,000 Won.

• These are the rates set by a revenge-for-hire agency. Spreading defamatory flyers in an apartment complex costs 1.5 million won for a 10-floor building.
• Comment section trolling: 50 posts for 300,000 won.
• Adult product deliveries: 100,000 won.
• Freezing bank accounts to paralyze financial activity: 450,000 won.

Average Wedding Gift Money Rises to 117,000 Won.

• Up from 110,000 won in 2023 to 114,000 won in 2024. From an NH Nonghyup Bank report.
• 42% gave 50,000 won, 40% gave 100,000 won, and 8% gave 200,000 won.

Foreigners Sold 26 Trillion Won While Individuals Bought 23 Trillion Won.

• Trading trends after Kospi surpassed 7,000. The Donghak ants propped up the index, driving it to 7,981.
• Kim Seok-hwan (Mirae Asset Securities researcher) analyzed, “Most indicators show signs of overheating.”
• Margin loan balances exceeded 36 trillion won.
• The won-to-dollar exchange rate is 1,491 won.
• All U.S. stock markets rose yesterday. The S&P 500, Dow, and Nasdaq indices gained 0.77%, 0.75%, and 0.88%, respectively.

Worth Reading.

It’s Not Just Picnics That Have Disappeared.

• Asking “Why don’t you go on picnics?” won’t change anything.
• Failure often occurs not because there’s no answer, but because the question itself is flawed. When problem definitions shift, so do solutions, responsibilities, budgets, and systems.
• In 2024, there were 4,234 deliberations on educational activity violations—triple the number from five years ago. 96% of elementary school teachers oppose experiential learning, and over 80% fear malicious complaints and child abuse reports. Although the five laws protecting teacher authority have passed, 80% of teachers say they haven’t felt any change.
• Jang Dae-ik (Gachon University professor) pointed out, “Trust has vanished from schools.” “Where trust is gone, teachers become risk managers, not mentors, and teaching becomes a liability.”

Rentier Capitalism.

• It’s called rentier capitalism. One in four citizens is a stock investor. Kim Ji-hwan (Kyunghyang Shinmun columnist) noted, “Asset income is increasingly treated as sacrosanct.”
• Last year, real wages for workers rose 0.9%, while Gangnam apartments surged 20% and the Kospi index jumped 85%.
• When the Participatory Democracy Network announced a forum on semiconductor excess profits, a post threatening, “We’ll kill you,” appeared on an online community—hardly a benign sign. Kim Ji-hwan added, “The phenomenon of treating asset income as absolute to the point of exclusivity is concerning.”
• Related Link.