Tag Archive | "South Korea"

Overcaffeinated? Korea’s Ubiquitous Coffee Shop Culture

By Nathaniel Curran

One thing that shocks most first time visitors to Korea is the ubiquity of coffee shops. You can’t find anywhere in Seoul that isn’t a short walk to the nearest café. The sheer magnitude of Korea’s passion for coffee is best expressed through numbers: Korea boasts the highest per capita number of cafes in the world. The result being there are an estimated 80,000 cafes in a country slightly smaller than Kentucky. While that number is staggering, the growth of the café industry is even more mind-boggling; back in 2011, Korea boasted only a measly 12,400 cafes. Even if one goes with a more conservative estimate in 2015 that put the number of cafes at around 50,000, the industry has undeniably grown by a factor of least five in the last decade.

While not as uniquely Korean as the noraebang (karaoke rooms) that seem to stud most streets in Korea, coffee culture permeates every neighborhood in Seoul, with tiny boutique cafes competing alongside behemoth Korean chains like Ediya Coffee, which as of last year boasted 1,800 stores.

Far from home, close to coffee

If you ever find yourself off the beaten path, perhaps on a deserted highway, be assured coffee will not be difficult to procure; convenience stores and rest-stops across carry dozens of varieties of pre-bottled coffee. These include heated cans of coffee as well as many varieties of refrigerated specialty coffees, such as white chocolate mochas and caramel macchiatos.

In addition, instant coffee is easy to come by in Korea. Sugary, delicious, and distributed in single-serving tubes that can also double as impromptu stirring sticks, they require only the addition of hot water. Even though consumption of instant coffee has declined in recent years, it was still an almost $900 million industry as of 2015. However, most Korean cafes would be loath to be considered in the same breath as instant coffee. Specialty coffee shops in Korea often charge more than 10,000won ($8) for their drinks, which advertise beans sourced from far flung locales and that are carefully curated by hagwon certified baristas.

From Gojong to Gangnam

Coffee came to Korea in the late 19th century, and Korea’s last monarch, Gojong, was a coffee fan, and the backer of Korea’s first coffee shop. Despite that initial foray into java, the modern Korean coffee habit owes its origins to the instant coffee powder that was common in American military bases during and after the Korean War. Instant coffee dominated the market for years, until, with the advent of Starbucks in Korea in the late 1990s, the Korean public was introduced to the joys of espresso. Now, espresso dominates the café market, with the singular “Americano” becoming Korea’s drink of choice.

Sadly, Korea’s more traditional beverage, tea, has not fared well against the onslaught of cafe-ization; the tea market has been cut in half since the late 2000s, while coffee sales climbed an incredible 1,598 percent.

The future of coffee in Korea

Experts have repeatedly predicted that Korea’s coffee market has reached saturation and that the glory days of café culture is coming to an end, only to be proven wrong. In fact, the intense competition in the café market has only given rise to more variations on the traditional coffee shop, including sleep cafes and exotic animal cafes that feature civet cats and wallabies.

While it’s hard to imagine that Koreans will drink even more coffee in the future, or that any possible ideas for cafes have not yet been exhausted, I’m confident that Korea will surprise us yet. In the meantime, Koreans can rest on the laurels of their vibrant coffee industry. Although Korea often gets called out for its overreliance on exports, what greater proof is there of a developed domestic economy than a country with a $5.7 billion dollar coffee market?

Whatever the future of cafes and coffee in Korea, the last two decades have been a heyday for Italian espresso machine makers, who are undoubtedly toasting a new sort of “Miracle” (or perhaps, “Americano?”) on the Han.

Nathaniel Curran is a PhD student at USC’s Annenberg School of Communication and a 2017 COMPASS Summer Fellow. The views expressed here are the author’s alone.

Photo from Dorothy’s photostream on flickr Creative Commons.

 

 

 

 

 

 

 

 

 

 

 

 

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The North Korean ICBM Test: A Significant Step, But Still Just a Step

By Mark Tokola

It usually takes some time to figure out the details of what a North Korean missile test has accomplished – what type of missile it was, how it performed, its capabilities – but from the initial information regarding North Korea’s July 4th missile test, it appears that they have successfully tested an Intercontinental Ballistic Missile (ICBM).

The accepted technical definition of an ICBM is a missile that can travel 3,400 miles. The North Koreans test fired their missile to fly a short range but with a high trajectory; it landed off the west coast of Japan. If the trajectory was flattened out, the missile in theory could have flown over 4,000 miles, enabling it to reach Alaska but not the lower 48 states.

Conducting an ICBM test is a significant step in North Korea’s weapons program, but it is just a step. Kim Jong-un’s stated objective is to develop a reliable ICBM that can carry a nuclear warhead to the American homeland. The July 4th missile did not demonstrate that kind of range, and there is no evidence (yet) that North Korea has a nuclear warhead that could be carried by an ICBM. We shouldn’t downplay the significance of this test, but calling it a “game changer” may be an overstatement.

The true importance of the July 4th test is the timing – following a series of other missile launches in 2017, it is clear that North Korea is not slowing the pace of its quest for nuclear weaponry that can threaten the U.S. Further, Kim Jong-un has crudely described it as a “gift for the American b******ds,” implying it was timed for Independence Day. The language choice shows that the North Korean regime sees no hypocrisy in using such language about other countries while having a hair-trigger sensitivity to slights to its own national dignity. The test also comes on the eve of a G20 meeting, demonstrating North Korea’s desire to be in the international limelight.

Perhaps the most important fact about the timing of the North Korean ICBM test is that it comes on the heels of the first visit of new South Korean President Moon Jae-in to Washington, where he spoke clearly of his desire to engage North Korea in dialogue. If North Korea had any interest in demonstrating an openness to President Moon’s overture, it would not have conducted an ICBM test only days after President Moon’s public remarks. We should all hope that North Korea would be responsive to a South Korean initiative to defuse tension, but the July 4th test makes it hard to believe that there is any basis for that hope. North Korea seems unresponsive to China’s efforts to defuse tensions, and even less so to South Korea’s initiatives. North Korea seems single-mindedly focused on trying to acquire a reliable ability to credibly threaten the United States with a nuclear attack — truly a high stakes gamble on North Korea’s part.

Still, it is not too late for a diplomatic solution. That would be in the best interest of South Korea, China, Russia, Japan, the United States – and even for North Korea. That diplomatic path may be narrowing, and it will only be possible if South Korea, China, Russia, Japan, the United States, and others are able to maintain a common front against North Korea’s nuclear ambitions. There is some evidence that sanctions are beginning to bite – which may be also be contributing to Kim Jong-un’s rush. As the world’s leaders gather for the July 7-8 G20 summit in Hamburg, watch for signs of unity or division to see how the international community may handle this growing threat.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Photo from Stefan Krasowski’s photostream on flickr Creative Commons.

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The Son of Refugees who Became President of the Republic of Korea Visits D.C.

By Seung Hwan Chung

On December 19 1950, the SS Meredith Victory, a 7,600-ton merchant marine vessel, was about to leave from the North Korean port city of Hungnam. Hundreds of thousands of refugees flocked to the pier at Hungnam as the bombing of the Chinese army came closer. Leonard Larue, a U.S. Navy captain, made the decision to abandon almost all of the arms and military supplies from the ship and took on 14,000 evacuees in an operation code-named “Christmas Cargo.”

The parents of Moon Jae-in and his older sister were among the 14,000 refugees who fled aboard the Meredith Victory, arriving on Geoje Island in Gyeongsang Province on Christmas Eve. Moon Jae-in was born two years later on Geoje Island in January 1953. Thus, the son of a refugee from Hungnam became the 19th President of the Republic of Korea thanks to this successful rescue operation called the Hungnam Evacuation, which is credited by the Guinness Book of World Records as the largest transportation of evacuees in history.

In the lead-up to the evacuation, the 3rd U.S. Division was advancing northward from Wonsan to assist UN and South Korean forces trapped near the Chosin Reservoir. After losing Wonsan, the 10th U.S. Army Corps and the 1st Korean Army Corps had to withdraw to the sea as their retreat path was blocked, leading them to the port city of Hungnam. The first unit that withdrew from Hungnam was the 3rd Korean Division, followed by the 1st U.S. Marine Division.

According to the Korean Ministry of Patriots & Veterans Affairs, the Battle of the Chosin Reservoir is recorded as among the most brutal battles in the history of the U.S. Marine Corps. During the Battle, 15,000 U.S. marines fought through 120,000 Chinese soldiers in the extreme winter cold of -22 to -40 degrees Fahrenheit. As a result, 4,500 U.S. marines died and 7,500 were wounded.

President Moon Jae-in remarked on his family’s story at a reception for Korean War Veterans on  June 23, 2017, saying, “Today we are joined by the heroes of the Battle of Chosin Reservoir and the Hungnam Evacuation from North Korea. These two historic occasions became well known even to postwar generations in Korea who did not experience the war. The son of a refugee from Hungnam could become the President of the Republic of Korea and join you all today. I hope this fact helps make the Korean War veterans of the U.N. Forces feel a sense of delight and reward.”

President Moon Jae-in is scheduled to make a visit to Washington D.C. from June 28 to July 1 for his first summit meeting with U.S. President Donald Trump. As his first stop in the United States, he visited the new memorial for the Battle of the Chosin Reservoir at the National Museum of the Marine Corps in Quantico, Virginia on June 28. There, Mr. Moon laid a wreath before the memorial that commemorates the Korean War battle which enabled the evacuation of civilians.

The “Star of Koto-ri,” a symbol of the battle, is on the top of the monument. U.S. Marines started to wear the star to commemorate the bright stars they saw after a snowstorm before succeeding in the evacuation.

President Moon will also visit the Korean War Veterans Memorial in Washington D.C. along with Vice President Mike Pence, whose father was a Korean War veteran who was awarded a Bronze Star Medal for his service.

Additionally, Foreign Minister Kang Kyung-wha remarked on the Hungnam Evacuation during her visit to the U.S. 2nd infantry division base in Gyeonggi Province, stating “President Moon will invite Korean War veterans who participated in the Hungnam Evacuation” to the White House during the summit.

President Moon’s visit to the United States will lay the foundation for further upgrading South Korea-U.S. relations. The fact that the new Korean president is highlighting his family history and making a point to thank Korean War veterans throughout the trip can make the summit even more meaningful. Through the visit, the two heads of state can share a vision for further developing the Korea-U.S. alliance into an even greater one.

Seung Hwan Chung is a reporter with the Maeil Business Newspaper and a visiting fellow with the Korea Economic Institute of America. The views expressed here are the author’s alone. 

Image from USMC Archives’ photostream on flickr Creative Commons.

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Is Trump Impacting How South Koreans View the United States?

By Kyle Ferrier

Claiming “Korea actually used to be a part of China” and stating “it would be appropriate” if South Korea paid for THAAD are just some of Donald Trump’s comments since his inauguration that have not been well received by the South Korean public. As President Moon Jae-in meets with President Trump this week to discuss new issues as well as longstanding ones such as the North Korea nuclear problem, his flexibility both in Washington and after his return to Seoul depends on public opinion at home. Against this backdrop, the release of two major survey-based reports in the past few days are rather fortunately timed and help to shed light on how South Koreans perceive U.S. political leadership.

The first is the Pew Research Center’s U.S. Image Suffers as Publics Around World Question Trump’s Leadership: America still wins praise for its people, culture and civil liberties, released on June 26. The second is the Asan Institute’s A New Beginning for ROK-U.S. Relations: South Koreans’ View of the United States and Its Implications, released on June 27. While the Pew report looks at a broader scope of countries and the Asan report focuses solely on the South Korean public, both ultimately provide similar conclusions: South Koreans continue to view the U.S. favorably despite negative views on Trump. However, the two provide conflicting analyses as to whether Trump has already impacted U.S. favorability and how South Koreans view the future of relations with the U.S.

From polls conducted in 37 countries, the Pew study finds that international confidence in the U.S. president has dropped from 64 percent at the end of the Obama presidency to 22 percent at the beginning of Trump’s. South Koreans do not buck the trend. When asked if they have confidence in the U.S. president to do the right thing regarding world affairs, 88 percent of South Koreans responded positively during the end of the Obama years while only 17 percent expressed the same confidence in Trump — below the global median of 22 percent. Of the 37 countries polled, this 71 percentage point swing was the fourth largest, behind Sweden, the Netherlands, and Germany. The 78 percent of South Koreans who definitively answered they had no confidence in Trump is the highest among the countries polled in Asia (the others are Japan, Australia, Indonesia, Vietnam, Philippines, and India) and is above the global median of 74 percent. Further, when asked about Trump’s major policy shifts, 78 percent disapproved of withdrawing from international climate change agreements and 80 percent disapproved of U.S. withdrawal of support for major trade agreements.

Asan presents complementary findings. It shows Trump’s favorability during the campaign was low: on their 0 to 10 ratings scale, where 0 is the least favorable and 10 is the most, Trump was below a 2 up through Election Day.  This is similar to the favorability of Japanese Prime Minister Shinzo Abe, not much higher than that of Kim Jong-un — who hovered around 1 — and dwarfed by Barack Obama — who consistently scored in the low to mid-6 range from at least the beginning of 2014 through 2016. Trump’s election boosted him from a 1.69 in November to a 3.25 in December and a 3.49 in January, but dropped to 2.93 in March before going up slightly to 2.96 in June. This jump in favorability since becoming president has given him a steady lead over Abe, but Trump remains below Chinese President Xi Jinping, who is punishing South Korea economically over the deployment of THAAD.

When asked only about the United States, Pew shows 75 percent of South Koreans view the U.S. favorably, above both the regional and global median. In addition, 86 percent view Americans favorably and 78 percent like American democratic values, both of which are also above the regional and global medians.  Further, those on the political right are more inclined to have a favorable view of the U.S., with 86 percent of respondents who self-identified as politically right favoring the U.S. compared to 64 of those on the left.

Korea Surveys

The favorability rating of the U.S. in the Asan study largely follows the trend of the Obama years, remaining around a 6 out of 10. “This suggests that the United States’ favorability is not determined solely by the favorability of its leader and that American soft power has had a positive impact on South Korean public opinion,” the Asan report states. “It appears that South Koreans have learned to distinguish between the United States, the country, and Donald Trump, the individual.”

Both reports seem to indicate that American soft power has a positive influence on South Koreans, who view the U.S. and its president separately. However, the two present contradictory findings on how Trump has impacted perceptions of the U.S.

While Asan shows only a very minor dip in U.S. favorability since Trump’s election — a drop from 5.92 in November to 5.81 in June, which is termed as “relatively stable” favorability scores — Pew finds a larger drop. The 75 percent of South Koreans who viewed the U.S. favorably in 2017 is down from 84 percent in 2015, the last year Pew data is available, and is at its lowest level since 2008. Pew suggests this follows a larger global trend. Of the 37 countries polled, 30 showed a drop in favorable views of the U.S. in 2017. Other countries experienced a steeper fall though, as South Korea’s drop in positive views of the U.S. is tied for 23rd of the 30.

The two reports are also at odds on how South Koreans perceive relations with the U.S. moving forward. Only 8 percent of Pew respondents thought relations with the U.S. would get better, 45 percent thought they would stay about the same, and 43 percent stated they would get worse. In contrast, 67 percent of respondents in the Asan study thought relations with the U.S. would improve and only 20 percent thought relations would deteriorate.

There is clearly a wide gap between the sentiments expressed in both polls, but this is likely because of how the questions were worded.  Pew framed their question around Donald Trump (“Now that Donald Trump is the U.S. president, over the next few years do you think that relations between our country and the U.S. will ___?”) and Asan framed theirs around Moon Jae-in (“ROK-U.S. Relations under President Moon Jae-in will___”.) Considering the negative views on Trump expressed in both polls and Moon Jae-In’s high domestic popularity, this disparity makes a certain amount of sense. Additionally, as no exact date is provided for when the Pew poll was conducted — the report only states spring 2017 — their findings may not reflect changes based on Moon’s election and thus may leave out any boost in confidence it might have engendered for relations with the U.S.

It may still be too early to definitively claim that Trump is impacting South Korean perceptions of the United States. But this does not mean Trump’s controversial statements, should they continue, will not influence how South Koreans view the U.S. in the future. If the outcome of the U.S.-ROK summit this week does not meet expectations or Trump makes controversial remarks in the future, South Korean public opinion of the U.S. could be pushed lower.

Kyle Ferrier is the Director of Academic Affairs and Research at the Korea Economic Institute of America. The views expressed here are the author’s alone. 

Images from Gage Skidmore’s photostream on flickr Creative Commons.

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Netflix’s Korean Premiere Met with Controversy

By James Do

With the success of Korean popular culture reaching many countries around the world, especially Europe, South America, the Middle East, and Southeast Asia, video streaming service Netflix is trying to capitalize on the success of Korean entertainment. By riding on the popularity of its original content (House of Cards, Orange is the New Black) and incorporating Korean media into their library, Netflix is now in a prime position gain a market share in the entertainment industry in Korea.

Since Netflix expanded its service globally, the company began to offer more Korean movies and television shows onto its streaming library. Many of its programs tend to be more recent releases such as the movie Tunnel or Train to Busan, which both premiered in Korean cinemas in 2016. The company has also picked up several Korean television shows including The Sound of your Heart and My Only Love Song. In addition, many older famous Korean movies and television shows such as Assassination, Old Boy, and Descendants of the Sun are currently available to watch. In fact, Netflix now offers more Korean movies or television shows than Japanese or Chinese content.

We can see this trend continuing with Netflix’s investment into its upcoming film, Okja. Directed by the renowned Korean director Bong Joon-ho (The Host, Snow-piercer), Okja serves as Netflix’s official entry into the Korean entertainment market. Okja is a movie about a young country girl, Mija, (Ahn Seo-hyun) who stops at nothing to defend her newfound friend, Okja, a pig-like animal genetically created to be used for human consumption. During her adventure to save her beloved friend, she takes on an evil corporation led by a powerful CEO (Tilda Swinton) who seeks nothing but to profit from Okja and her species. Mija befriends animal rights activists (Paul Dano, Steven Yeun, and Lily Collins) who assist her in her quest to save Okja.

While the plot of the movie evokes a sense of adventure, the film itself is without controversy. Netflix recently announced that the film would be released both in theaters and online in Korea, a first for the company, which has never pushed to have their own content released through cinema or television broadcasting. After the announcement, major Korean theater chains opposed Netflix’s plan to release the movie simultaneously, as movies there are typically screened in theaters and made available online after a few weeks. CGV, Korea’s largest cinema chain, refused to screen the film, while Megabox and Lotte Cinema are still debating.

Bong Joon-ho, Okja’s director, explained that while trying to cater to its subscription base, Netflix went against the existing norms and systems of the existing Korean film industry. However, although the film remained controversial to big theater outlets, many independent theaters agreed to premier Okja.

In addition to Netflix’s controversial role in the Korean film industry, the film also garnered attention at the Cannes Film Festival. While the film was invited to be premiered at the festival, it was omitted from award consideration, since the movie was not planned for theatrical released in France – a rule that was introduced after the lineup for this year’s festival was settled. Bong stated “[The festival] invited us and then caused a stir, making us embarrassed. They should have put the rules in place and then invited us. How can I as a filmmaker study local French laws while making films?”

With all the controversies over Okja, what will the future of Netflix and the Korean film industry be? The popularity of Korean entertainment globally has influenced Netflix to ride the Korean wave by entering a market that continues to grow immensely not just in Korea but abroad. As Netflix hopes to increase its user base, it’s possible the company will seek to invest in other films and television programs in countries where online streaming remains popular.

 With streaming becoming ubiquitous among younger generations, film industries must change their business model to incorporate more recent trends. The way we watch and engage in film and televisions has already immensely changed from the previous decade. To meet the needs of contemporary times, companies and organizations need to develop an environment where filmmakers are motivated but also given more recent standards of support. With its innovative model of simultaneous physical and online premieres, Netflix is at the forefront of these changing times. Now it is up to the film industry and its community to change their policies to reflect current digital trends.

James Do is a graduate student at the Fletcher School of Law and Diplomacy focusing on International Security Studies and Pacific Asia and an intern at the Korea Economic Institute. The views expressed here are the author’s alone.

Photo from TFurban’s photostream on flickr Creative Commons.

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Hallyu Sets its Sights on the Middle East

By Jenna Gibson

At the end of May, Korea’s largest media company announced it would be opening a Turkish unit to help create and promote local content for the Turkish market. They already have plans to film Turkish versions of popular Korean movies, and hope to move forward with more Korean-Turkish co-productions in the future.

CJ E&M is a Hallyu powerhouse, owning the music-oriented TV channel Mnet as well as popular cable channel tvN, responsible for several smash-hit dramas including 2016’s “Goblin.” With this move to increase its presence in Turkey, CJ is hoping to make new inroads for the Korean Wave in the Middle East.

Although the main markets for Korean pop culture abroad are still in East and Southeast Asia, the phenomenon has put down roots around the world, including in the Middle East. In Iran, for example, fascination with Korean culture started back in the mid-2000s, when the historical drama “Dae Jang Geum” was broadcast on state TV and garnered 86 percent ratings nationwide. In fact, in a 2017 report of the most popular shows on Netflix around the world, Iran was only one of two non-Asian countries to put a Korean drama (2012’s Love Rain) on the top of their queues.

Meanwhile, last year the United Arab Emirates became the first non-Asian country to host a KCON event after the United States. KCON, a music festival/cultural experience featuring some of the biggest k-pop stars as well as demonstrations of Korean food, beauty products, and more, drew more than 8,000 fans to its Abu Dhabi stop.

Scholars have speculated that one of the reasons Hallyu is so popular in the Middle East is because although some of the specifics are different, Korean dramas tend to focus on values that conservative audiences in the Middle East find relatable. According to one study of female fans of Korean pop culture in Iran, “Reflecting traditional family values, Korean culture is deemed ‘a filter for Western values’ in Iran.” The study dug further into online fan communities across the Middle East, showing that love of Korean pop culture allowed women to share a sense of community with fellow Hallyu fans. “The uni-culture cyberspace community of fandom has given Middle Eastern women confidence and a strong sense of group identity, sometimes for the first time.”

But the Hallyu movement is not just about giving fans a place to enjoy catchy dances or dramatic love stories. For the Korean companies that create Hallyu content and sponsor overseas events like KCON, it’s about getting fans to buy Korean.

“We see that there are a lot of business potential in many areas that are influenced by Korean culture, such as the beauty, IT and SOC markets,” Sul-joon Ahn, President of Music Division at CJ E&M, told Dubai News after the KCON event.

In fact, South Korea has been trying to create a “Second Middle East Boom,” focused on boosting industries like construction, infrastructure and energy. By capitalizing on the popularity of Hallyu, this push for increased Korean presence in the region can expand to include consumer goods and creative content.

CJ E&M’s expansion into the Turkish market could signal a new era of Hallyu, one that focuses on localization and domestic buy-in to boost the continued success of Korean pop culture around the world.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone. 

Image from Republic of Korea’s photostream on flickr Creative Commons.

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Moon Vows to Become a “President of All People,” but Faces a Nation Divided

By Gwanghyun Pyun

Moon Vows to Eradicate “Deep Rooted Evils” of Previous Administrations

An unexpected early presidential election was held on May 9 in South Korea. This election was the result of the impeachment of President Park Geun-hye. The election was won by Moon Jae-In, who strongly argued for eradicating ‘deep rooted evils”’ in Korean society, referring to the turmoil from the former President Park. Moon largely won the support of those who protested against the Park administration, and during his campaign he praised the “candle sentiment” of the people who took to the streets with candles to protest. But while he was supported by those who protested against the administration, how will his policies tackle the issues they stood up for?

In Moon and the Minjoo Party’s official pledge book, his first pledge out of twelve is for there to be a ‘Republic of Korea without corruption,’ including the ‘eradication of deep rooted evils’ as its primary agenda. It specifically promises that the next administration would eradicate the deep rooted evils that resulted from the nine years of the former two conservative administrations. This means that his strategy during the election focused on criticizing the previous two  presidents to gain the support of those who took part in the candlelight protests. According to a poll by Gallup Korea, the reasons people voted for Moon were the “eradication of deep rooted evils” (20 percent), “regime change” (17 percent) and Moon’s “good personality” (14 percent).

A Republic of Korea where people are sovereign by finishing the candlelight revolution

Moon and the Minjoo Party decided to begin his list of  four visions for Korea with a vision of “finishing the candlelight revolution, a Republic of Korea where people are sovereign.” It suggests that during the nine years of the two former administrations, Korean society has belonged to the 1 percent of people who have vested interests in the system such as bureaucrats, the chaebol and the rich. Moon insisted during the campaign that finishing the candle revolution would bring a society where all the people are sovereign.

As the first pledge, Moon made promises to take Korean society back from the 1 percent. To do this, his administration will set up a special committee for clearing out deep rooted corruption and confiscating any wealth accumulated by illicit means. While he spoke out against the meddling in state affairs by Choi Soon-sil, a friend of the former president Park closely tied with the scandal that led to hear impeachment, Moon also promised to reform corruption among high-ranking bureaucrats, to remove the blacklist of cultural figures who supported left-wing causes, and to negate the state authored history textbooks made under the Park’s administration.

At the same time, Moon pointed out what he thinks is the fundamental reason why a small number of people have too much power –  the Korean constitution made in 1987 is outdated. Because this constitution has given prior leaders imperial presidential power, he said, Korea needs constitutional revisions to ensure balance between the presidency and the National Assembly.

The 58.6 percent who did not vote for the President Moon

Since he has focused on giving power back to the people, Moon needs to be aware of the views of the 58.6 percent of people who did not vote for him. Considering the fact that Moon’s first vision and pledges are about fixing faults from the last nine years, it seems that his victory  is more about the perceived wrongs committed by the prior two administrations than his policies on security and the economy.

During the election, Moon had two main rivals – the conservative Hong Joon-pyo and the centrist Ahn Cheol-soo, who won 23.3 percent and 21.8 percent of the vote respectively.  He also faced two minor opponents in the center-right Yoo Seung-min and the left Shim Sang-jung, who won 6.8 percent and 6.4 percent respectively.

Excluding the topic of cleaning up corruption, Korean publics opinion on other policies are polarized. Especially in terms of security policy, the three other candidates who collectively won 52.9 percent  offered a different vision for dealing with North Korea than Moon’s pledge  to inherit the ‘Sunshine policy’ that pushed for a close relationship between South and North Korea during the liberal administrations of 1998 to 2008.

The two conservative candidates, Hong and Yoo, insisted that Seoul needs to maintain a hardline stance against the North, including deploying tactical nuclear weapons in South Korea. The main candidate, Ahn, said that without North’s denuclearization first, there cannot be any cooperation with North Korea. Furthermore, these three candidates support the deployment of THAAD, while Moon argued that the THAAD deployment decision should be left to the new administration.

When it comes to economic policy, Moon insisted that the government should lead the creation of job opportunities, and has set a target for creating 810,000 new jobs in the public sector. In contrast, his three main rivals argued that private sector should lead job creation and criticized Moon for having no proper plan to budget for the 810,000 jobs he wants to create.

But while Moon Jae-in may face these splits on economic and security policy, particularly among those who did not vote for him, he has acknowledged the need to bridge divides. In his inaugural address, Moon said “I will become a president of all people. Each person who did not support me will still be my people and I will serve them as such,” highlighting the nation’s integration. It will be an important task for him to address the faults of past, but he must also work to overcome the current divisions in society and bring the nation together.

Gwanghyun Pyun is currently an Intern at the Korea Economic Institute of America as part of the Asan Academy Fellowship Program. He is also a student of Sogang University in South Korea. The views expressed here are the author’s alone.

Photo from Republic of Korea’s photostream on flickr Creative Commons.

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Chinese Tourists to South Korea Drop 40 Percent in March Amid THAAD Row

By Jenna Gibson

It’s official – new numbers from March confirm that China’s THAAD retaliation has significantly cut into South Korea’s tourism industry.

According to new data released today by the Korea Tourism Organization, the number of Chinese tourists arriving in South Korea fell 40 percent year-on-year in March 2017.

Only 360,782 Chinese visitors came to South Korea in March, down from 601,671 in March last year.

Considering that China’s alleged travel ban only took effect on March 15, about halfway through the month, it’s possible that April’s drop could be even more dire.

South Korea’s tourism industry is heavily reliant on Chinese visitors – in 2016, they made up 47 percent of all tourist arrivals and 70 percent of sales at Korean duty free shops.

According to a previous KEI article, “Chinese tourists spent an average of $2,391 per person while visiting Korea – meaning the 8 million Chinese tourists who visited Korea in 2016 brought nearly $20 billion into the local economy.” So, if the 40 percent cut in visitors results in a corresponding drop in revenue, the Korean tourism industry could lose up to $7.7 billion as a direct result of China’s THAAD retaliation.

Chinese Tourism Graph March

There is a silver lining in the March tourism data. Despite this massive 40 percent drop in visitors from China, the total number of people entering South Korea in March was down only 11.2 percent over March 2016. This is thanks in large part to a 22 percent jump in visitors from Japan, the second-largest group of tourists in Korea after China.

Other countries such as Taiwan, Myanmar, Vietnam and Mongolia also showed significant increases. This may be a good sign for the Korean government, which is heavily targeting Southeast Asia and the Middle East to diversify the industry and decrease their reliance on tourists from China.

The Ministry of Culture, Sports and Tourism is reportedly focusing more on advertising in Southeast Asia and Japan, and Seoul has started posting signs at major tourist destinations in Bahasa Indonesia, Malaysian, Thai and Vietnamese.

In addition, the KTO has been increasing their focus on tourists from Muslim-majority countries, helping local restaurants get halal accreditation and even hosting a Halal Restaurant Week at the end of last year to highlight Korean food options for Muslim visitors.

Meanwhile, just after the ban took effect, the Korean Ministry of Trade, Industry and Energy promised to provide 400 billion ($349 million) to support businesses affected by the THAAD retaliation, including those in the tourism industry.

This is not the first crisis that the Korean tourism agency has dealt with in recent years. During the peak of the Middle East Respiratory Syndrome (MERS) outbreak in July 2015, total tourism arrivals were down 53.3 percent over the year before, including a 63.1 percent drop in arrivals from China. Later that year, the Korea Culture and Tourism Institute estimated that MERS cost the tourist industry 3.4 trillion won ($3 billion) in lost revenue. The fact that the tourism industry was able to bounce back from that significantly greater drop bodes well for its ability to deal with this crisis as well.

While it remains to be seen how deep this THAAD spat will cut the Korean tourism industry over time, it is clear from these new numbers that the Chinese retaliation should not be taken lightly. As the THAAD system continues to go through the deployment process, Korea will have to keep an eye on the immediate as well as secondary effects of China’s policies.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Graphic by Jenna Gibson. Photo from Tom Page’s photostream on flickr Creative Commons.

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China: Challenges for the Next South Korean Administration

This is the first in a series of blogs looking at South Korea’s foreign relations in the run up to the next Korean administration taking office on May 10. The series also includes blogs on relations with North Korea, the United States, Japan, Russia, the European Union, the Middle EastASEAN, Africa, and Latin America.

By Mark Tokola

A question frequently asked is whether the next South Korean administration will tilt towards China and away from the United States, based on Seoul’s purportedly shifting perception of the relative importance of the two countries.  In reality, it is not helpful to judge whether the United States or China are more important to the Republic of Korea.  There is no simple reply to the general question and, honestly, there is no reason to answer it.

Decisions are particular and based on practical requirements, not on answering a generalized question about which country is more important than another.  For example, Korean military procurement decisions almost always will be based on compatibility requirements with their U.S. military counterparts.  Jeju-do tourism authorities probably should look more towards accommodating Chinese tastes than American.  A Korean university looking to partner with a cutting-edge, innovative foreign university would be wise to partner with an American rather than a Chinese academic institution (15 of the world’s top 20 universities are American, none are Chinese).  Korean construction companies interested in participating in Asian regional infrastructure projects probably should head for Beijing or Shanghai rather than San Francisco or Dallas.

Moises Naim in his book, The End of Power, recommends that everyone should “get off the elevator” and stop obsessing about who is up and who is down.  Heeding that advice, we can discuss the challenges that South Korea faces in its relationship with China without re-measuring the distances between Seoul and Beijing, and Seoul and Washington. What is generally true is that South Korea will benefit from cooperative relationships with all three of the countries with which it has the most to gain or lose (exempting North Korea): the United States, Japan, and China.

The imminent question facing the next South Korean administration in regard to its relations with China is what to do about the THAAD anti-missile system.  The Park Geun-hye Administration in July 2016 accepted the U.S. offer to deploy the THAAD system in South Korea following North Korean ballistic missile tests.  The THAAD system will serve the purpose of protecting U.S. and ROK military installations and key southern sites, such as the port of Busan, which would be used to reinforce allied forces in the event of a conflict.  The threat is not imaginary; North Korea has explicitly threatened South Korea with missile attacks.  China has vociferously opposed THAAD deployment as running counter to China’s strategic interests and has been explicit that South Korea’s relationship with China will suffer if THAAD is deployed.  Along with its public condemnations, Chinese tourism to South Korea has suffered and Korean firms operating in China have been subject to harassment by government officials.

There is a public debate within South Korea regarding THAAD deployment but the smaller part of the discussion is about the cost, effectiveness, or need for the system.  Most opposition to THAAD is about whether it is unacceptably damaging relations with China.  In the past, there might have been a debate in South Korea about whether THAAD was reducing the prospects of North-South diplomacy, but Kim Jong-un’s North Korea has been so belligerent, unyielding to international sanctions, and uninterested in dialogue with Seoul that THAAD’s effect on inter-Korean relations is barely mentioned.  It is all about China.

As a matter of fortunate timing, the next ROK administration will be spared the choice of whether to introduce THAAD to the peninsula.  Its hardware has already begun arriving and deployment is well underway.  If the new government does nothing, THAAD will be ready to counter potential North Korean attacks within months.  It would require a bold decision on the part of the new government to reverse course and dismantle a system that was already in place to defend the Republic of Korea against the North Korean threat.  China is still protesting, but there are rumors that the Chinese government is internally reviewing why its tactics failed to prevent THAAD deployment and is now looking forward to get past the problem.  China would be ill-advised to begin its relationship with a new ROK administration by pressing it hard with an extremely difficult demand to meet.

That is not to say that THAAD is forever.  If U.S. and Chinese pressure succeeded in dragging North Korea to the negotiating table, and if North Korea as a result of negotiations became less threatening to South Korea, there is nothing that would prevent THAAD from being withdrawn from the peninsula.  If the military threat THAAD is designed to guard against goes away, it would not need to remain.  If China mistakenly but genuinely believes that THAAD represents an American threat to Chinese strategic interest, rather than a North Korean threat to South Korean interest, then it would be clearly in China’s interest to push North Korea in a peaceful direction.  The next South Korean government may well point that out to them.

There are other issues that the new Korean administration will need to take up with China.  On the economic front, Seoul may point out to China that THAAD-related retaliation against South Korean economic interests, including tourism, imposes costs on both sides and will chill the atmosphere for future economic cooperation.  South Korean investors may think twice about whether to put their investment into China given China’s demonstrated use of commercial leverage for political purposes.  Large South Korean firms may now also consider it wise to diversify their activity to be less dependent on the Chinese market.  Regardless of THAAD, that might be prudent.  It will be worth reviewing implementation of the 2015 ROK-China trade agreement to see if it is working as intended.  The Regional Comprehensive Partnership Agreement (RCEP), which would include both China and South Korea, is still there to be negotiated, and may have new life breathed into it by the U.S.-precipitated collapse of the Trans-Pacific Partnership.

The next South Korean administration may prefer to stay out of disputes involving China that less directly involve Korean interests, such as the South China Sea territorial issues. That may prove impossible if China’s general regional assertiveness manifests itself in ways that affect Korea, such as the illegal activities of the Chinese fishing fleet, claimed Air Defense Identification Zones, or Chinese interference in maritime freedom of navigation.  As a virtual island, because its sole land border is with North Korea, South Korea depends upon air and sea lanes, and the international rules that guarantee their free use.  It is less an immediate issue than THAAD, but the next South Korean government may find itself at odds with China regarding China’s quest to exert control over China’s periphery in ways that do not respect the sovereign interests of the countries of the region.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Photo from Republic of Korea’s photostream on flickr Creative Commons.

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Not Worth a Dime? Korea Should Stop Producing the 10 Won Coin

By Patrick Niceforo

Late last year, the Bank of Korea (BoK), South Korea’s central bank, announced its plans for a “Cashless Society,” which first and foremost means getting rid of coins by 2020. A proposed method for gradually removing coins from circulation is encouraging travelers in South Korea to deposit their change onto their T-Money cards, electronic travel passes that are used to pay for metro and bus fares. But while the BoK has reduced its annual expenditure on coin production by 200 million won from 2015 to 2016, it could do more. Similar to Canada ceasing production of its penny, South Korea could simply stop minting its equivalent of a penny, the 10 won coin.

The BoK issues won banknotes in denominations of 50,000, 10,000, 5,000, and 1,000 and won coins in denominations of 500, 100, 50, and 10. According to a recent study, only 8.5 percent of 10 won coins are in circulation, with the remainder sitting in jars or private safes in peoples’ homes.  As of last year, the cost of producing the 10 won coin (0.009 USD) was reportedly twice its face value at 20 won (0.018 USD). Other sources such as KNN and Asia Economy, however, have estimated the cost of production to be as high as 40 won (0.036 USD).

Besides the fact that it costs more to mint a 10 won coin than it is actually worth, the coin’s value is so low that it has little, if any, purchasing power. At the current exchange rate, the 10 won coin is worth slightly less than an American penny. As a result, its only real use is when one needs exact change, which is rare since just 20% of financial transactions involve cash. Furthermore, given the coin’s low value, most coin-operated devices such vending and laundry machines do not even accept it.

In addition to Canada, many other countries such as Brazil, Australia, Finland, Israel, and Malaysia have removed their equivalent of a penny from circulation, primarily because inflation rendered the coin virtually useless. To compensate, many penniless countries round prices to the nearest 5 or 10 cents. South Korea could easily implement similar policies, especially since prices in Korea already include sales tax. In other words, consumers who pay with cash in South Korea can easily calculate how much one or more item costs before reaching the cash register since their final price is whatever is listed on the labels. Getting rid of the 10 won coin will not only make Koreans’ wallets lighter, it will actually expedite cash transactions.

It does seem like South Korea is naturally moving further away from physical currency, with more Koreans starting to use smartphone apps in lieu of credit cards. Nonetheless, achieving a cashless society could take some time, especially since cash discounts are common in the informal sector. Moreover, the gifting of cash is a cultural tradition in South Korea at weddings and during certain holidays. A small and cost effective step consistent with a cashless society policy could be to cease minting the 10 won coin. Many other countries have already removed the penny from circulation for these same reasons. Perhaps South Korea should, too.

Patrick Niceforo is a graduate student at the Middlebury Institute of International Studies and an intern at KEI. The views expressed here are the authors’ alone.

Image from YunHo Lee’s photostream on flickr Creative Commons. 

 

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About The Peninsula

The Peninsula blog is a project of the Korea Economic Institute. It is designed to provide a wide ranging forum for discussion of the foreign policy, economic, and social issues that impact the Korean peninsula. The views expressed on The Peninsula are those of the authors alone, and should not be taken to represent the views of either the editors or the Korea Economic Institute. For questions, comments, or to submit a post to The Peninsula, please contact us at ts@keia.org.