The exchange won rate has not stopped falling.The No Japan movement is a campaign to buy domestic products.Nothing will change under the chaebol economy.
2022-02-08
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South Korean Industrial structure vulnerable to exchange rate fluctuations
South Korea's trade dependence on GDP is more than 70 percent, including the service sector.In other words, domestic demand is low and foreign exchange is directly affected.Even if foreign demand is received, it does not circulate at home and flows abroad.If the person who made the purchase contract increases the dollar by 5% at the time of payment, the payment will increase by 5%.The won-dollar exchange rate is 1,200 won, but it has been hovering around 1,200 won in recent days.
Default due to bulk purchases
In order to maintain international competitiveness, chaebol companies such as SAMSUNG buy parts in bulk and produce them in bulk to reduce costs and sell them at low prices.In this case, large debts are always carried out and large payments are repeated, and problems arise when the value of the currency changes significantly during that period.This is the so-called default.Under these circumstances, the won's international credit rating has not increased, and South Korean companies can trade in dollars depending on the L/C of Japanese commercial banks.
South Korea experienced two foreign exchange crises in 1997 and 2008.No country will experience two foreign exchange crises in 10 years.In other words, South Korea's industrial form is vulnerable, and in short, it is trading beyond its currency capabilities.
Considering what Moon Jae In wants to do, the real intention is to socialize, control the currency, and stabilize the value of the won.Do you think the boycott is a campaign to buy domestic goods if it is reversed?
MEMO South Korea is listed by the FRB as a currency manipulator.
Only chaebol companies can grow
The reason why domestic demand is not expanding is the existence of chaebol companies.The role of chaebol companies in driving the Korean economy is important, but on the other hand, investment in chaebol companies is concentrated and other industries are not growing.In addition to the businesses run by chaebol companies, how can Korean companies grow globally?It can only be done with its own money without investment.
The boycott Japan fundamentally solves nothing
This structure will not change even if there is a boycott Japan.As a currency manipulator, even if it leaves the liberal economy, it will not change.It is necessary for the government to take the lead in fostering domestic demand and to attract investment in what industries to foster domestic small and medium-sized enterprises.The boycott Japan does not mean that South Korean domestic companies' sales will increase.
POINT Moon Jae In's term of office is less than three months, and criticism from his country seems to be gathering.I think it's quite late from Japan view.
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The ''North-South division issue'' and the future aimed at by Kim Gu - Lee Jae-myung's assertion is an unrealizable hypothesis.
South Korean Democratic Party members Moon Jae-in and Lee Jae-myung cite Kim Gu as the politician they most respect. Kim Gu was a person who served as the president of the provisional government of the Republic of Korea. He rejected the postwar state of US-Soviet trust between North and South Korea and proposed a plan to unify the peninsula among the Korean people, but this idea was rejected by Kim Il-sung of North Korea. It was an unrealizable idea that would be denied by the United States as well. After a political dispute, Syngman Rhee, who was recommended by the United States, became president, and Kim Gu was subsequently assassinated.
Lee Jae-myung recently told a US senator that the North and South were divided because of the US. I guess he is trying to say that if he had done what Kim Gu said at that time, there would have been no Korean War or division between North and South. However, there is absolutely no basis for this "if". At that time, there were no people in Japan or abroad who supported this idea.
Kim Gu's ideas did not produce any results in the environment of the time. Based on this premise, there are no objective facts in history; all that exists is the existence of South Korea and North Korea since the founding of the nation more than 70 years ago. North Korea established the current state of North Korea without paying any attention to Kim Gu's claims.
In other words, it is logically impossible to trace back to Kim Gu's assertion what the basis for the unification of North and South is advocated by the No. 1 and No. 2 members of the Democratic Party of Japan. They are the most pro-North Korean and pro-China faction in the South Korean National Assembly. Even now, that claim is not appreciated at all by North Korea, the United States, or even China.
Anti - Korean sentiment in the world
When comparing data from the BBC on positive and negative impressions of Japan and South Korea, a surprising number of countries have a negative impression of South Korea (Reference wiki)
Japan has been at war with China in the past, so we can predict China's feelings towards Japan, but what exactly is South Korea like? Regarding China's sentiments toward South Korea, relations between China and South Korea deteriorated in 2016 when South Korea decided to deploy THAAD, but even if you look at domestic surveys conducted before then, it appears that China's reputation towards South Korea was quite unfavorable.
2007 "Xinhua News Agency" survey results: South Korea ranks first in "neighbors I don't like"
2007 “Tengai Community” survey results. ``Most hated country'' South Korea ranks first
2009 “Global Network” survey results. 94.6% of respondents said they did not have a favorable impression of South Korea.
It has long been pointed out that anti-Japanese campaigns around the world are a strategy to tarnish Japan's image, given that Japan and South Korea have similar industrial structures in the face of global competition.
But when you look at the data... In the first place, isn't the idea that one benefits by degrading others itself wrong?
Yun Seok - yue's manifesto aims to attract and circulate capital through a free economy.Will the National Assembly become a burden that hinders this?
South Korea is wavering between pro-China and pro-US
Original regime change through social policy
A country that thinks about what is better
Yin Seok-yue promotes free economy
Promoting free competition within the country and moving towards CPTPP
Legal development by the Diet is hopeless
Is South Korea wondering whether it should join China, which has achieved growth in recent years, or join the camp of free nations such as Japan, the United States, and Europe? I guess it's a question of which is better, but it seems like a very polarizing choice.
The Moon Jae-in administration completely abandoned its pride as a democratic country without hesitation and spent five years desperately trying to join China and North Korea, a country that violates human rights at its worst, but unfortunately there was no result. Ta.
The new president, Yun Seok-Yeol, has the exact opposite policy, aiming for Korea to be a member of the Japan-U.S. and liberal camp. This seems to be the composition of the right-wing and left-wing forces in South Korea.
The left tends to seek the enhancement of social institutions, while the right tends to seek free competition and liberal democracy. This is a question of the balance between social welfare and liberal economics, and a debate about competition versus distribution. This is an issue to be debated within a democratic country, and can be said to be a universal frame.
America's two-party system is very easy to understand. Republicans and Democrats can be broadly divided on the question of whether taxes should be primarily used for public welfare, or whether they should reduce taxes in the first place and increase competitiveness in a free economy. It is also expressed in the framework of big government and small government.
The choice of domestic social policy is not a question of which country will benefit you by following, but rather a matter of foreign policy. Prior to Japan's annexation of South Korea, there was intense conflict between pro-Russian and pro-Japanese factions on the Korean peninsula. Is nothing different from that era? Another characteristic of South Korea is that its foreign policy is also its domestic policy.
Looking at Yun Seok-Yue's manifesto from the perspective of economic policy, his economic policy is to bring back the capital that fled South Korea under the Moon Jae-in administration.
In particular, the focus is not on where to focus investment and foster industry, but rather the policy appears to be aimed at attracting investors by abolishing regulations and promoting a free economy and free competition.
It appears that the plan is to aim to join the CPTPP and other liberal nation frameworks based on this liberal economic frame, but in order to realize this, it will be necessary to obstruct the various free competitions that exist within Korea. Legislation must be put in place to abolish the regulations that apply.
This is the job of the National Diet, the legislative branch, but the opposition Democratic Party of Japan still holds nearly 60% of the seats. In other words, there are many hurdles for the time being in the economic policy advocated by Yun Seok-Yeol and cooperation with liberal countries. In other words, we will have to wait for the 2024 general election.
The Korean won is falling.It exceeded 1,240 won. The reason that Japan must not make promises with the new Korean president prematurely .
The won fell to 1,243 won against the dollar.If the Fed raises interest rates in real terms, it will fall further.The main reason is that Russia's economic prospects are pessimistic. And Yoon Seok-yeol won the presidential election on March 9 and became president on May 10.Yoon called for strengthening the U.S.-South Korea alliance and mentioned the deployment of THAAD.China accounted for 24.8 percent of Korea's exports, twice as much as the U.S., the second largest exporter.When the Park Geun Hye administration decided to deploy THAAD, China imposed severe economic sanctions.China's economic sanctions are only pessimistic for investors, so Korean investment is likely to rise further and the won is likely to fall further.
Next time, South Korea will break its promise with China
President Yun Seok - Yeol was criticized for not demanding an apology from Japan during Korea Liberation Day! Countries demanding an apology on the day the war ended.
Enthusiasm to repair Japan-Korea relations
A country that expects grudge festival on the day of the end of the war
It is clear that it will change again if the government changes
Promises between Japan and South Korea that have been repeatedly broken
Background of countries that fail to keep their promises
It appears that President Yun Seok-Yeong's speech at Liberation Day is under attack. It is said that he only shouted for freedom 33 times in his speech on Liberation Day, but did not hear a single word demanding an apology on the 77th anniversary of Liberation Day.
In the first place, it can be said that it is abnormal that 77 years have passed and an apology is still being requested at a national ceremony.
Every country holds some type of event on Victory Day or the End of World War Day, but avoid using expressions that suggest that the country is still considered an enemy country. This is a matter of course if there are diplomatic relations, which is international common sense.
Will Israeli President Herzog give a speech on the anniversary of the end of the war, saying that Jews still hold a grudge against Germans? It can be said that this is a completely meaningless political action.
In any case, although President Yun Seok-Yeong's desire to improve Japan-Korea relations is highly commendable, even if we make some kind of promise with him, we have no idea what will happen once his term ends.
In Japan, it has been reported that the agreement between Japan and South Korea was broken during the era of former President Moon Jae-in, but diplomatic relations were restored in 1965, and the Japan-Korea Joint Declaration was issued in 1998, and concrete Japan-Korea exchanges were established. have started, but they are already in an invalid state. The Japan-Korea Joint Declaration collapsed within two years.
In other words, the fact remains that South Korea is not in a position to keep its promises. Therein lies the essential problem. The best-selling book Anti-Japanese Tribalism written by Korean professor Lee Yong-hoon describes anti-Japanese as shamanism that goes beyond logic. It is truly an anti-Japanese religion.
