‘Unity’ Repeated Five Times.

• At the meeting with Lee Jae-myung (President), Moon Jae-in (former president) emphasized ‘unity.’
• Moon said, “The Democratic Party must unite first, and on that foundation, achieve greater unity with the democratic reform camp and the forces that joined the ‘light revolution’ to bring the people’s hearts together.”
• Lee said, “We must continuously expand our reach and strive to build a structural majority.”
• Hong Ik-pyo (Chief of Political Affairs at the Blue House) stressed, “Unity and expanding reach are not separate values—both are essential.”
• A Blue House official met by Chosun Ilbo explained, “A structural majority means broadening the support base to include moderate conservatives while excluding extreme poles, securing a stable majority.”
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Can the Rift Be Mended?

• Interest in the meeting stemmed from the belief that Moon Jae-in was the one who could resolve the conflict between the so-called ‘New Lee Jae-myung’ and the old guard of the Democratic Party.
• The Hankyoreh editorial noted, “The message could not be more timely,” while cautioning, “It must not remain just talk.”
• The Kyunghyang Shinmun emphasized, “Self-defeating infighting that makes citizens cringe must end.”
• A pro-Moon figure met by Chosun Ilbo observed, “Even reading between the lines of their public remarks, it was not exactly a beautiful meeting.”
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“Is a Second Party Leadership Bid Necessary?”.

• Kim Min-seok (former prime minister), who returned to the Democratic Party, emphasized, “I see no need to become party leader twice through the same methods as before,” adding, “The time calls for leadership with a different color, capability, style, and strengths than Jeong Cheong-rae’s.”
• Choi Min-hee (Democratic Party lawmaker) responded on Facebook, “Is there really a need for someone who served as prime minister to become party leader?”
• Kim Min-seok openly criticized Jeong Cheong-rae, stating, “The process of resolving the merger was mishandled,” and stressed, “We must embrace rational reform, progressives, conservatives, and moderates.”
• The “betrayal” narrative is also a key issue. Kim Min-seok defected to Chung Mong-joon’s campaign ahead of the 2002 presidential election, earning the nickname Kim Min-sae. He explained, “In his autobiography—authored by Roh Moo-hyun (former president) and edited by Yu Si-min (writer)—it was clarified that my actions were made in good faith to reclaim power.”
• Jeong Cheong-rae visited Jeonju and Gunsan to emphasize unity, saying, “I will do my utmost to ensure that Jeollabuk-do, excluded from mega-projects, does not feel marginalized or resentful.”
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What Matters Now.

June Exports Reach $102.3 Billion.

• Semiconductor exports hit $44.8 billion—71% higher than June last year.
• The country is on track to surpass $1 trillion in annual exports this year. Only Germany, China, and the U.S. have exceeded that mark.
• Imports rose 30% to $66.1 billion, leaving a trade surplus of $36.2 billion.

Will 4% Growth Be Achieved?

• Capital Economics forecasts South Korea’s growth at 4.0%.
• Korean Re sees 4.1%. JP Morgan projects 3.7%, while Bloomberg Economics estimates 3.5%.
• The Bank of Korea’s current projection is 2.6%, but an upward revision is highly likely.

Won-Dollar Exchange Rate Hits 1,554.9 Won.

• The psychological barrier of 1,550 won has been breached—marking the first time in 17 years since 2009.
• Three reasons explain this.
• First, the dollar’s strength persists ahead of anticipated U.S. benchmark rate hikes.
• Second, foreign exchange demand has surged. Foreign investors net-sold 150 trillion won worth of Korean stocks in the first half of this year alone.
• Third, the won’s linkage to the yen’s weakness is significant. The yen-dollar rate has surpassed 162 yen—a 40-year high since 1986, just after the Plaza Accord.
• A break above 1,600 won is possible. Min Kyung-won (Woori Bank researcher) stated, “If no meaningful resistance emerges, the path to 1,600 won remains open.” Oh Jae-young (KB Securities researcher) added, “We expect attempts to retest the 1,400 won range only after the fourth quarter.”

Deep Dive.

Baekjae High Baseball Team Suspended for Six Months.

• The Korea Baseball Softball Association (KBSA) delivered a strong penalty over the “Go to Starbucks” controversy. Remaining games will be forfeited. The decision cited violations of sports spirit and disruption of stadium order.
• A funeral wreath was delivered to Baekjae High’s main gate. It read, “Ban Ilbe-linked players from pro nominations,” “Stop raising garbage.”
• Criticism has emerged over excessive doxxing and malicious comments. Kim Sang-gyun (Baekseok University professor) noted, “Cyber violence against minors is a dangerous act that leaves long-term scars.”
• Lee Hyo-jun (Baekjae High principal) stated, “There seems to have been a lack of awareness about the historical weight of the May 18th Democratization Movement.”

Democratic Party’s Speed War.

• Strengthened filibuster (unlimited debate) requirements while shortening the fast-track (expedited bill) process.
• The People Power Party called it a “judiciary committee heist” and is considering a full-scale boycott of the National Assembly.
• Currently, a filibuster can only be forcibly ended after 24 hours if two-thirds (180 seats) of the full assembly agree. The Democratic Party plans to revise this so the National Assembly speaker can terminate it if attendance falls below one-fifth (60 members) of the full assembly.
• The fast-track process currently takes up to 330 days—180 days in standing committees, 90 days in the judiciary committee, and 60 days for plenary session referral. A proposed amendment would reduce this to 60 days in standing committees and 15 days in the judiciary committee.
• The Democratic Party has taken 11 of 18 standing committees, including the judiciary committee, leaving 7 for the People Power Party. The People Power Party refuses to accept any standing committee.

Another Take.

National Pension Service Begins Rebalancing.

• As of the end of April, the National Pension Service held 420 trillion won in Korean equities.
• Projections suggest it will sell around 74 trillion won worth of stocks under a Kospi 9,000 scenario. The target allocation is 20.8%, but current holdings approach 30%.
• Kim Sung-joo (Chairman of the National Pension Service) stated, “The possibility of a sell-off bomb is zero.” “If we reduce too heavily because it’s too burdensome, it will again go off track, so we must do it gradually and precisely.”

U.S. Lifts Export Controls on Anthropic.

• The U.S. government has decided to unblock exports of Mistral 5 and Fable 5, which were previously banned.
• Critics argue that holding onto restrictions is futile since ZhipuAI’s GLM-5.2, already released in China, is now assessed to have vulnerability detection capabilities on par with Mistral.
• Projections suggest GLM-5.2 could catch up to Anthropic’s latest models within the year.
• Companies are increasingly canceling Claude subscriptions and switching to DeepSeek.

Seoul’s Jeonse Supply-Demand Index Hits 125.9.

• Above 100 means more people are seeking homes than landlords are listing.
• Year-to-date cumulative rise in jeonse prices: 4.8%.
• Jeonse listings in Jungnang District dropped 83% from last year. Nowon, Seongbuk, and Geumcheon Districts saw declines of 72%, 71%, and 66%, respectively.
• A vicious cycle continues: rising home prices as rental demand shifts to purchase demand, shrinking jeonse inventory. Park Won-gap (KB Kookmin Bank senior analyst) explained, “The rental market’s instability and purchase sentiment are interacting in a self-reinforcing loop.”

Three Mega Projects, 25GW: How?

• 1.4GW equals 18 nuclear reactors.
• The Southwest Semiconductor Cluster alone requires 6.3GW, with an additional 18.4GW needed for AI data centers.
• The 12th Basic Plan for Electricity Supply and Demand, to be finalized by year-end, projects 2040 demand at 131.8–138.2GW—yet this must be significantly increased.
• As of last year, Gwangju-Jeonnam’s power generation capacity was 16.9GW, including 7.4GW of renewables. Annual output reached 72TWh, far exceeding consumption of 42.9TWh.
• The issue is Yongin: its power self-sufficiency rate is only 59%. Jeon Young-hyun (Samsung Electronics Vice Chairman) stated, “Nuclear and gas power must proceed.”
• The Green Transition Institute analyzed that if 8.4GW of AI data centers are built by 2029, greenhouse emissions could reach 85 million tons by 2035—12% of annual emissions.
• Lee Ho-hyun (Vice Minister of Climate and Energy) said, “Electricity has now become national security itself.”
• Kim Byung-kwon (Director of the Green Transition Institute) criticized, “The government is focusing only on attracting industry, not on deliberating power sources like renewables.”
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How to Secure 475.5 Trillion KRW in Funding.

• According to FnGuide consensus, Samsung Electronics and SK Hynix are projected to post operating profits of approximately 36.2 trillion KRW and 26.9 trillion KRW, respectively, this year.
• Samsung plans to invest 245 trillion KRW by 2040, while SK Hynix aims to invest over 100 trillion KRW over 10 years—roughly 26.3 trillion KRW annually.
• Current cash reserves suffice for now, but long-term strategies include borrowing and overseas joint investments.

Can Military Academy Integration Succeed?

• As early as the 2028 academic year, a plan to unify admissions for military cadets is under review. The Army, Navy, and Air Force Academies would be integrated into a single National Military Academy, with a ‘2+2’ system: common education for the first two years, followed by branch-specific training in the third and fourth years.
• An Kyu-baek (Minister of National Defense) stated, “Missing the ‘golden time’ could create a vacuum leading to loss of national interest, even threatening national survival.” He emphasized, “Military specialization must not become a ‘silos’ issue.”
• The JoongAng Ilbo pointed out, “The military academy integration debate has devolved into a real estate policy dispute.”
• Regarding An Kyu-baek’s framing of declining academy admission scores as justification for integration, the Chosun Ilbo criticized it as a “weak excuse.” The narrative suggests, “The declining popularity of military academies stems from poor military welfare conditions.”
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The Fix.

Trees Planted with Taxes, Burned with Subsidies.

• An inconvenient truth. South Korea’s top renewable energy source is solar power. Second place? Biomass. In 2022, they generated 29 TWh and 9 TWh of electricity, respectively.
• Biomass is so carbon-intensive it’s almost embarrassing to call it renewable. According to Climate Solutions, South Korea’s biomass power plants emit 11 million tons of carbon dioxide annually.
• South Korea subsidizes tree planting—and then subsidizes cutting them down and burning them. Tree-planting subsidies lead to 100-year-old trees being felled after just 20 years, then burned for electricity.
• The claim that “unused forest resources” are being utilized is a lie—it’s closer to a government subsidy scam.
• It’s shocking that 87% of biomass reported as “unused volume” wasn’t “thinning” but “clear-cutting.” Entire healthy trees were chopped down. Nearly 40% of logging permits were for biomass purposes.
• Subsidies are inflated under the pretext of using “unused forest,” but the problem is that these forests weren’t unused to begin with—and the generous subsidies incentivize cutting trees that wouldn’t otherwise be felled.
• According to the Institute for Coexistence with Nature, 1.67 million tons of trees were cut last year. Yet South Korea’s forests can sustainably produce only 570,000 tons annually, of which only 92,000 tons are economically viable without subsidies. This means the country is cutting three times the sustainable yield and 18 times the economically viable limit.
• Biomass subsidies ultimately come from electricity bills—settlement costs reach 900 billion KRW annually. The burden falls on citizens.
• The carbon from trees felled over 1,000 years ago is still stored in the Muryangsujeon Hall of Buseoksa Temple. Burning trees releases carbon into the air, but using them for buildings or furniture sequesters it. The correct order is to use wood for long-lasting products first, then burn only what’s unusable.
• Climate Solutions proposed three solutions: First, stop subsidies. Second, use wood as long as possible, reuse and recycle it, and burn only as a last resort. Redefine biomass strictly as byproducts to prevent logging. Third, redirect funds from deforestation and incineration toward protecting forests and communities.
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SK to Sell Half of Renewable Energy Business.

• SK Innovation, SK Ecoplant, and SK Discovery’s scattered renewable energy assets will be consolidated into a joint holding company with global private equity firm KKR. KKR and SK will own 51% and 49%, respectively.
• HoldCo’s renewable energy capacity stands at 1.7GW—the largest single-company portfolio in South Korea. The plan is to expand to 10GW by 2031.
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ICYMI.

Will Mobile IDs Be Phased Out?

• “Convenience stores and bars are all being breached,” as vendors offering forged IDs proliferate.
• The Ministry of the Interior and Safety is considering service termination.
• Kim Seung-joo (Professor, Korea University) pointed out, “Since high-security mobile IDs have emerged, it’s only right to phase out lower-security services.”

Born in the U.S., Born a Citizen.

• The Supreme Court blocked Trump’s attempt to abolish birthright citizenship. Six of nine justices ruled his executive order unconstitutional. Three of the six conservative-leaning justices defected.
• Trump sarcastically tweeted, “Congratulations to Xi Jinping (President of the People’s Republic of China) and the great Chinese people on their victory.” The decision leaves no way to prevent Chinese “birth tourism.”

Google Faces Up to 8.496 Trillion Won Fine for App Market Abuse.

• Google is accused of demanding favorable treatment on the Google Play Store in exchange for financial support to game companies.
• The Fair Trade Commission calculated related sales at $9.21777 billion, and applying the maximum penalty for abuse of market dominance (6% of sales) could result in a fine of up to 8.496 trillion won.
• Google was previously fined 42.1 billion won in 2023, which could be an aggravating factor.

23.6 Million Millionaires in the U.S.

• China follows with 5.3 million, Japan 2.9 million, Germany 2.6 million, and the UK 2.4 million, per a UBS report.
• South Korea? 1.3 million.
• While average adult wealth in the U.S. grew 10% between 2020–2025, median wealth dropped 20%. The country added 440,000 new millionaires last year alone.
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Presidency as a Business Venture.

• The New York Times analysis shows Trump earned at least $2.2 billion last year.
• Megan Gorman (attorney) called it “completely unprecedented” and a “betrayal of the American social contract that places the country above oneself.”
• The family company WLF’s token sale brought in $526.8 million, while the meme coin $TRUMP launched three days before inauguration generated $636 million.
• Meta paid $24.5 million for the presidential library project, and Alphabet contributed $22 million to the White House ballroom construction fund.
• Licensing royalties included $4.7 million from Trump watches and $1.9 million from the photo book ‘Save America.’
• Melania Trump earned $6 million from NFT sales and $10.7 million from the Amazon documentary ‘Melania.’
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Worth Reading.

Hate Without Intent.

• Nam Ji-won (Gendesk, Kyunghyang Shinmun) emphasized, “We must redesign systems that block hate itself.”
• No need to look far. The Anti-Discrimination Act, stalled for 19 years, already contains all the answers. “Eradicating hate in stadiums and building seawalls against it are not so different,” goes the argument.
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Dreamed of Meritocracy, but Reality is Inheritocracy.

• An “inheritocracy” is a society where life opportunities are determined by the “Mom and Dad Bank.”
• The top 20% income bracket has a 20.4% university admission rate to top schools, while the bottom 80% stands at 10.7%. Analysis shows 75% of this gap stems from parental financial power.
• Wealth gaps are also widening. This year’s first-quarter housing fund analysis revealed 2.6 trillion won in inherited, gifted, or borrowed funds—64% higher than last year.
• Ahn Sun-hee (Hankyoreh Editorial Director) emphasized, “The starting point of policy design must be a sense of historical mission to prevent fractures threatening social cohesion and to alleviate the anxiety and pain of the majority of youth.”
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Decoupling from the U.S. and China: What South Korea Must Prepare.

• Huawei may struggle to catch Nvidia immediately, but it could redefine the game by enhancing cloud performance. If China sets the standards in AI transition amid U.S.-China tensions, South Korea’s influence could wane.
• Kwon Seok-joon (Sungkyunkwan University professor) emphasized, “A historical inflection point is imminent.”
• First, we must define standards for memory-centric AI infrastructure solutions.
• Second, we must deploy manufacturing AX total solutions before China does.
• Third, we must proactively prepare for equipment relocation.
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