Tag Archive | "technology"

Pokémon Go and the Potential of Augmented Reality Games In South Korea

By Patrick Niceforo and Gwanghyun Pyun

Pokémon Go is an augmented-reality (AR) mobile game in which users become Pokémon trainers and catch Pokémon outside. The developer, Niantic Labs, launched the game in United States, Australia and New Zealand on July 6th, 2016 and progressively expanded the game’s reach around the world. One of Pokémon Go’s unique features is that it has a social element; the game provides an opportunity to socialize and “catch” Pokémon with friends, which contributed to its explosive popularity.

Pokémon Go was released in the United States and quickly became the most popular augmented reality (AR) game of the year, beating out other titles such as Clash Royale and Candy Crush Saga. At its peak, Pokémon Go had roughly 20 million active users in the United States, and by the end of 2016, the game had garnered over $950 million worldwide. However, due to factors such as market saturation and a declining number of active users, Pokémon Go experienced a tremendous drop in revenue shortly after its launch. One estimate states that revenue dropped from $125 million in July to $15 million in November, with common complaints about the game including battery drain and repetitive gameplay. While the game was able to temporarily boost the number of active users with special events, Pokémon Go’s popularity has been steadily shrinking since its release.

While Niantic Labs launched Pokémon Go in many countries in North America and Europe, it did not fully launch in South Korea until January 23, 2017, despite the popularity of gaming there. At first, people guessed that the delay was because of the map used for the game. The South Korean government has not published a detailed map of the country outside its own borders, citing security concerns. However, on January 23, Niantic Labs suddenly announced the launch of Pokémon Go in South Korea without receiving the use of a detailed map from the government. Dennis Hwang, Chief Art Director at Niantic, explained that the delay was because they needed time to catch their breath after the huge response for Pokémon Go after its initial release. He also said the delayed launch is unrelated to the map issue because they only use publically accessible data sources.

Despite the delay, nearly 7 million people played the game during its first week in South Korea according to WiseApp, an app analytics company. Pokémon Go’s sales came in second place in the game category in both Google Play and the App Store during that period. Niantic Labs launched the game right before the Lunar New Year holiday, when many Koreans have extra free time.

However, many people in South Korea were pessimistic about Pokémon Go’s long-term success. Some predicted that this trend will be maintained only for two weeks as was the case in other countries such as the United States. Other people pointed out that people would not want to go out to catch Pokémon in January due to cold weather. In addition, people have pointed to repetitive game mechanics and the app’s susceptibility to hacking.

On a positive note, a Harvard study suggests that Pokémon Go and similar apps can, at least temporarily, boost levels of outdoor exercise. One of the study’s conclusions was that, on average, active Pokémon Go users walk 11 minutes more per day than non-users. On the other hand, the game has been criticized for increasing the level of trespassing on private property. Moreover, many have reported sustaining injuries such as ankle sprains and broken collarbones while playing the game. Based on a sample of tweets and news reports, one scholar estimated that over 110,000 Pokémon Go related road accidents occurred within a 10-day period in the United States. There is even a live “Death Tracker” with a worldwide list of deaths and injuries sustained due to Pokémon Go-related negligence.

Koreans also have been concerned about accidents related to AR games. The number of reported accidents related to Pokémon Go already have increased in South Korea. South Korean Police caught 36 drivers who enjoyed playing Pokémon Go while they were driving on the road from Jan 24 to Feb 2. Furthermore, there have been reports of safety and privacy issues at locations such as Gyeongju National Museum, a hot spot for catching Pokémon, where many active users have tried to enter flower gardens, run into walls, and trespassed in museum exhibits. On Feb 4, one girl lost her mother while playing Pokémon Go.

Pokémon Go’s popularity opens the doors for a lot of potential in the AR field, and many Korean gaming companies are trying to develop their own AR games. Korean gaming companies such as Mgame and Hanbit Soft have plans to launch their own AR games similar to Pokémon Go. Mgame finished the second closed beta test for its own AR game, ‘Catchmon’ using AR and LBS (Location Based Service). Hanbit Soft also made ‘SoulCatcher AR’ using AR and GPS. They plan to launch their games during the first quarter of 2017.

Pokémon Go carries two major lessons as it enters South Korea’s national stage. First, Pokémon Go’s developers should focus on not only expanding their user-base, but also retaining it. Others have suggested several strategies for user retention including keeping popular features, introducing new features, and maintaining communication with the app’s users. Beyond Pokémon Go, there are other opportunities for apps to expand to different markets. A similar app, Pokemon Duel, is currently ranked number 1 in the United States but is unavailable in South Korea. South Korea has significant market potential for any popular app given that it has the world’s highest smartphone ownership rate– Niantic just has to figure out how to keep Korean Pokémon fanatics engaged with their game. Second, the game’s developers should prioritize safety in order to mitigate injuries sustained from playing the game. In fact, this concern was partially addressed in an earlier update to the game that prohibited gameplay when individuals were moving over a certain speed. South Korean users could take additional precautions by playing the game with friends and sticking to familiar, well-lit areas.

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

Photo from Jill Carlson’s photostream on flickr Creative Commons.

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President Trump Praises Samsung for Plan to Manufacture in the U.S.

By Jenna Gibson

“Thank you, @Samsung! We would love to have you!” Donald Trump wrote on his personal Twitter account, linking to a story about a possible plan for the tech company to build a factory for home appliances in the United States.

The article called the announcement by Samsung “A win-win,” saying that “Companies can grab headlines with news of even considering bringing production to the U.S., and the Trump White House benefits from the ability to take credit. These moves may not add up to significant job growth, but it’s hard to beat the PR.”

Trump’s tweet, which was sent only half an hour after the article was posted, may lend credence to their theory.

Post-inauguration, Trump hasn’t yet turned his attention toward Korea, focusing mainly on domestic issues and trade with neighboring Mexico. But trade with the ROK was a regular component of his campaign addresses.

“We spend a fortune on defending South Korea. Now I order thousands and — thousands of television sets here, they come from South Korea. They make so much.  They’re making a fortune.  They’re a behemoth,” Trump said during the CNN-Telemundo Republican debate last February.

Samsung – which makes some of the televisions Trump may be referring to – already manufactures semiconductors at a plant in Austin, Texas in addition to its facilities in South Korea. Samsung has the largest Korean investment in the United States, and Korea as a whole is the 5th fastest growing source of Foreign Direct Investment into the country.

Trump Tweet

The electronics giant is hardly the only Korean company to consider moving more production to the United States in an effort to head off criticism from the new President – last week, Hyundai Motor Group announced that they plan to increase U.S. investment by 50 percent over the next five years, and may build a new plant to supplement the factory they currently have in Montgomery, Alabama. The company also applied for membership with the American Chamber of Commerce in Korea this year for the first time since 2008.

LG is also considering building a new plant in Tennessee for its TV and home appliances. “This is something that has been under consideration for years at LG, but the current political situation is simply accelerating that timeline for a decision,” according to a source close to the company told Reuters.

On a larger scale, the Korean government has indicated that they will encourage more imports from the United States to balance some of Seoul’s trade surplus. As part of this plan, the finance ministry announced that they will begin importing more U.S. shale gas to meet the country’s energy needs.

Whether Samsung goes through with plans to begin manufacturing appliances in the United States or just wants to stave off the ire of the White House remains to be seen. But the 60,000+ likes Trump’s one tweet got within hours of posting certainly can’t hurt either way.

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

Photo from Michael Newman’s photostream on flickr Creative Commons.


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How Korean-Americans Transformed the History of Science and Technology

By Rose Kwak

In 2005, the U.S Senate and House of Representatives passed a historic resolution to acknowledge and to honor Korean-American contributions to the United States, officially setting the date to January 13th for the day of commemoration. Since the first wave of Korean immigrants in the early 20th century, Korean-Americans have not only increased in numbers, but have also made significant cultural and economic contributions to the American society.

Among a myriad of achievements, Korean-Americans have made pioneering achievements in scientific and technological innovations, ranging from automotive design to space missions. Korean-Americans continue to pave a road of limitless possibilities in future prospects of scientific progress in the U.S and around the globe.  As KEI honors Korean-Americans on January 13 that have made important contributions to science and technology, the Korean Americans listed below are representative of the many significant Korean-American figures in scientific and technological fields:

Dennis Hong: Hong has revolutionized the field of robotics by combining his passion for robotics with biochemistry. Frequently at the forefront of robotics, he was not only named as one of “Popular Science’s Brilliant 10,” but was also the recipient of the prestigious National Science Foundation Faculty Early Career Development Program award. His company RoMeLa (Robotics and Mechanism Laboratory) continues to produce some of the most creative and useful robots in the world, such as chemically powered snakes, walking tripods, and autonomous humanoids to name a few.

Jefferson Y. “Jeff” Han: Han is one of the main developers for multi-touch sensing, which allows recognition of more than two points of contact with the surface of a television or computer. To put it simply, a multi-touch screen allows users to interact with a screen with more than one finger at a time and it also accommodates to multiple users, increasing both efficiency and usability. Han presented his innovations in a Ted Talk in which he demonstrated how the mechanisms behind multi-touch screens could potentially lead to the end of “point-and-click” era.

Larry Kwak: As an internationally-acclaimed physician and scientist, Kwak was the recipient of the 2016 Ho-Am Prize in Medicine (equivalent to the Nobel Prize in Korea) for his cutting-edge research in the fields of immunology and cancer vaccinations. He is well-known for his innovation in the world’s first “cancer vaccine,” the lymphoma vaccine.  He is gained prominence in the world of medicine through his 12-plus years of research in the field, and in 2010 Time Magazine named him as one of the 100 most influential people in the world.

John Chun: Chun was a Korean-American car designer, notably known for his design of the Shelby Mustang GT 350 and GT500, which started distribution nationwide in 1967. He also designed the Shelby AC Cobra. His re-design of the Cobra logo is still used by the Shelby line today. In the Star Tribune magazine he has been described as a legend that “reshaped automotive history with his design for a legendary 1960s sports cars.”

Mark “Roman” Polansky: Polansky was an American aerospace engineer and a NASA astronaut of Korean-descent (his mother is from Hawaii but of Korean descent). He was in charge of three space shuttle missions including the STS-98 mission, in which he was the main pilot, and the ST-116 and ST-127 missions, in which he served as the mission commander. In these missions, his crew helped to build and to enhance the capabilities of the International Space Station.

Sung-Mo “Steve” Kang: Kang is an electrical engineer and the 15th President of KAIST University. Through his research in integrated circuits and systems (VLSI), he has led the development of the first 32-bit microprocessor chips used in computers. He also designed satellite-based private communication networks.

Peter S. Kim: Kim is a scientist who served as the president of Merck Research Laboratories, one of the largest pharmaceutical companies in the world. Kim specializes in HIV/AIDS research and he created compounds that prevent AIDS virus from infecting cells, using the principle of membrane fusion.  As one of the most influential scientists in the field of HIV/AIDS studies, Kim continues to lead pioneering research in developing a possible AIDS vaccine.

Rose Kwak is an intern at the Korea Economic Institute of America and a graduate of Davidson College in North Carolina. The views expressed here are the author’s alone.

Image created by Juni Kim, the Program Manager and Executive Assistant at the Korea Economic Institute of America, from images on flickr’s Creative Commons by GabboT, NASA HQ, Candy Scwartz, Johannes Wienke, Sanofi Pasteur, NIAID in clockwise order from top left.

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Growing Pains: The Case of Kakao

By Juni Kim

The runaway success of Kakao’s mobile messaging app can be easily seen by its near universal use in South Korea. From high school students to working professionals, three-quarters of South Korea’s 50 million residents use Kakao’s free messaging service monthly with an additional 10 million monthly users outside of South Korea. Despite rapid growth over the past decade, Kakao faced a daunting hurdle when the South Korean Fair Trade Commission (FTC) labeled it and other similarly sized companies as “big business groups” this past April. The new designation subjected Kakao to the FTC’s antitrust regulations, which also applies to South Korea’s much larger chaebol conglomerates like Samsung and Hyundai.

The FTC designation illustrates the fear that smaller Korean companies hold of potentially being caught by tighter regulations after continued growth. Companies like Kakao are caught in the crossfire of the Korean government’s efforts to promote growth in smaller firms while simultaneously attempting to manage antitrust regulations.

Criticism and controversy surrounded the new designation, which also labeled companies Celltrion, Harim Group, Korea Investment Holdings, Kumho Petrochemical, and SH Corporation as big business groups. Industry analysts noted the unfair grouping of Kakao’s total assets with much larger companies. According to Kakao’s website, the company’s total assets are about 5.19 trillion won ($4.5 billion US), easily dwarfed by conglomerate companies such as Hyundai Motor’s reported total assets of 165 trillion won ($143 billion) and Samsung Electronic’s assets of 230 trillion won ($200 billion).

Kakao Graph

In the wake of the FTC designation, the Federation of Korean Industries (FKI), a lobbying group for South Korean companies, released a report critical of the new designation. It stated that the designation excessively regulates companies like Kakao, citing the total of 60 newly assigned regulations authorized through 27 acts. Lee Chul-haeng, the FKI head of corporate policy, publicly stated, “We demand that the government either raise the asset floor for large corporation from 5 trillion won to 10 trillion won, or limit the list of large companies to the top 30 in terms of asset size.”

Concerns of excessive regulations on companies like Kakao have not gone unnoticed by South Korean President Park Geun-hye. Since March 2014, President Park’s administration has held five top-level meetings to discuss and encourage deregulation reform in an effort to encourage economic growth among burgeoning industries. The most recent meeting occurred at the Blue House only a few weeks after Kakao’s designation as a big business group. President Park specifically addressed Kakao’s growth challenges in that meeting by stating, “Companies like Kakao will be restricted if they are labeled as big business groups. In this situation, what company would want to continue to grow?” She further added, “Labeling big business groups as conglomerates is a system only found in Korea, and it needs to change according to the times.”

The FTC ultimately yielded and announced this month that the designation of big business groups will be changed from combined company assets of 5 trillion won to 10 trillion won, which effectively removes Kakao from the list. FTC Secretary General Shin Young-sun acknowledged industry criticisms of the previous designation by stating, “If the same level of regulation is applied to all these companies, it could affect the growth of the smaller members of the group, and we have decided to raise the standard.”

Kakao executives surely welcomed the news of the raised FTC designation. Kakao’s current plans for a web-based bank would have been subject to stiff restrictions if the FTC designation remained in place. However, challenges still remain for Kakao as it continues to expand. Despite its relative small size compared to larger chaebols, Kakao has been investigated before for possible abuses of its dominant market power in South Korea. Any further similar actions by Kakao may put it under the scrutiny of the FTC again and justify restrictive measures. Although it may be far from becoming its own chaebol, Kakao is not immune to future antitrust regulations.

Juni Kim is the Program Manager and Executive Assistant at the Korea Economic Institute of America (KEI). Jiwon Nam, an Intern at KEI and graduate student at the University of Maine, also contributed to this blog. The views expressed here are the author’s alone. 

Photo from Ben Hancock’s photostream on flickr Creative Commons.

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Five Surprising Ways South Korea and the United States are Working Together

By Jenna Gibson

This week, South Korea became the first Asian country to sign a space cooperation pact with the United States, the first step for the two countries to collaborate on projects like Mars exploration, launching a moon lander, and expanding possible uses of the International Space Station. This announcement strengthens what is already a robust relationship between South Korea’s space program and NASA, which KEI has discussed extensively through our podcast and other research projects.

This announcement may come as a surprise to those who see the U.S.-Korea relationship mostly in terms of security cooperation. However, there are many arenas where the United States and South Korea work together outside of the military alliance. Here are five surprising places where these two countries collaborate.

 1.      Improving maternal and child health

The United States and South Korea have a long history of cooperation on development assistance, beginning with American help in the wake of the Korean War to South Korea’s entry into the donor community in the 1990. South Korea’s development assistance agency, which celebrated its 25th birthday recently, has close ties with USAID. A joint project launched in 2013 focuses on combatting maternal, newborn and child health concerns across sub-Saharan Africa. Another new project will look into ways to promote sustainable development in Southeast Asia through science and technology.

2.      Developing wireless charging technology for electric cars

A grant from the US Department of Energy is helping fund a project to develop wireless charging capabilities for electric vehicles. The Hyundai-Kia America Technical Center (based in Ann Arbor, Michigan) and American company Mojo Mobility are collaborating on the project, which aims to improve the speed and convenience of charging for electric vehicles.

3.      Curing cancer

In 2015, the Korean National Cancer Center signed an agreement with the U.S. National Institutes of Health to share information and work together on cancer treatment and prevention. According to the Korea Herald, “The NCC seeks to set up a database of medical records of its 1.2 million patients who have suffered or survived cancer. Once the database is complete, the NCC plans to analyze the ‘big data on cancer’ for preventive measures and post-recovery treatment of the disease.”

4.      Stopping wildlife traffickers

South Korea and the United States have been working on a range of environmental issues, from climate change to sustainable fishing. But one interesting area of collaboration is on wildlife preservation. According to a Work Program adopted by the two governments in 2013, they are working to “Improve collaboration and communication among judicial, law enforcement, customs, and border security personnel in seizing illegal shipments of wildlife products, investigating wildlife crime, prosecuting wildlife traffickers, and dismantling transnational organized criminal networks.” In a related field, the Work Plan also includes a provision to engage in information exchange and dialogue with the goal of fulfilling wildlife management responsibilities, with an emphasis on the preservation of waterbirds and their habitats, and the restoration of habitat. This includes birds that migrate between the United States and the Republic of Korea, and threatened and endangered species of birds.”

5.      Cooperating on nuclear energy technology

In 2015 the United States and South Korea signed a new nuclear cooperation agreement, or 123 Agreement to replace the original agreement that had been in place since 1984. The two countries have already began to cooperate on “shared objectives such as spent fuel management, assured fuel supply, promotion of cooperation between our nuclear industries, and nuclear security.” An extensive KEI report written last year by former Department of Energy and Department of State official Dr. Fred McGoldrick delves into the details of this new agreement.

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

Photo from K putt’s photostream on flickr Creative Commons.

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10 Issues to Watch for on Korean Peninsula in 2016

By Mark Tokola, Phil Eskeland, Troy Stangarone, Jenna Gibson, and Kyle Ferrier

In the aftermath of North Korea’s nuclear test, 2016 has already begun with a new crisis on the Korean peninsula. As the United States, South Korea, and the rest of the international community work together to address the growing threat from Pyongyang’s expanding nuclear and missile programs, one of the top issues to follow for 2016 will be whether increased pressure through sanctions can bring North Korea back to the negotiating table. However, 2016 will also see elections in both the United States and South Korea, as well as Korea potentially playing an important role in China’s hosting of the G20 later this year. With that in mind, here are 10 economic and foreign policy issues to follow:

No Significant Progress with North Korea

North Korea’s nuclear test makes the need for progress both more necessary and increasingly difficult. However, even in the absence of North Korea’s nuclear test the structural nature of politics in the United States would have made significant progress difficult. With only a year left on President Barack Obama’s term in office there is little incentive for North Korea to engage in a sustained way and the Obama Administration may be increasingly tied up with the worsening situation in the Middle East.

At the same time, while South Korea has seen moments of potential progress with North Korea over the last two years, such as the surprise visit by senior North Korean officials to the Incheon Games, North Korea has quickly backed away from more sustained progress. While the Park Geun-hye Administration will continue to try and engage North Korea at an appropriate time in the future, expect Pyongyang to continue to back away from sustained engagement.

Key things to look for include whether talks restart with North Korea on its nuclear program, how potential unilateral sanctions by the United States impact North Korea, whether South Korea is able to separate humanitarian issues from the nuclear issue, and how North Korea responds to increasing pressure from the international community.

If There Will Be Another Round of Family Reunions

In October, around 100 South Koreans were able to cross the DMZ to reunite with members of their family that they haven’t seen since the peninsula was divided 65 years ago. The occasion was emotional for those who went, but also for the growing number of Koreans, now in their 80s and 90s, who may not have the chance to participate.

This has become a priority for the Park Administration, particularly after the August agreement. With the successful organization of one round of reunions a few months later, things seem to be looking up and there is a strong possibility of at least one proposed trip in 2016. The problem is precedent and North Korea’s nuclear test – although these reunions have happened sporadically over the past decade, no amount of dedication on the part of the South Korean government has made them a regular occurrence.

Whether we will see another reunion in 2016 depends on the willingness of the North Korean regime and the ability of the two governments to separate the humanitarian issue and the nuclear issue. Unfortunately, Pyongyang has tended to see these reunions more as a bargaining chip. This means these meetings, which are becoming more urgent by the day, may only happen as long as North Korea feels they can get something in return.

Could a China-North Korea Summit Still Happen?

Chinese President Xi Jinping has now met South Korean President Park Geun-hye six times, and remarkably has yet to meet North Korean leader Kim Jong-un.  Might 2016 be the year when President Xi finally meets the leader of the only country with which China has a military alliance?  Prior to North Korea’s nuclear test improving ties made it seem as though it could happen, but now there is no reason to believe that a meeting is in the offing, and probably would require a change of circumstances to occur.

Beyond the nuclear test, Kim Jong-un has shown a reluctance to travel outside of North Korea, having passed up opportunities in 2015 to attend high-profile World War II commemorations in both Moscow and Beijing.  In Beijing, President Park stood adjacent to Xi Jinping at the ceremonies, while North Korean representative Choe Ryong Hae was over forty protocol places away.  Some commentators believed that the appearance of China’s number five official, Liu Yunshan, next to Kim Jong-un at the October 2015 Pyongyang parade marking the 70th anniversary of North Korean People’s Party rule might have signaled a warming of Chinese-DPRK relations, but the Liu’s official ranking simply mirrored the relatively low level of Chinese Embassy attendance at official events in Pyongyang – showing more a frost than a thaw.  So long as North Korea pursues the acquisition of nuclear weaponry, a program which China opposes, association with North Korea will remain China’s preeminent foreign policy failing – one which China will be reluctant to spotlight.

Korea-Japan Relations

In 2015, Northeast Asia saw several steps to improving Korea-Japan relations during a year that marked the 50th anniversary of the re-establishment of diplomatic relations and the 70th anniversary of the end of World War II, celebrating the liberation of the Korean peninsula from Imperial Japan.  Two notable steps were a bilateral summit meeting held in November between ROK President Park Geun-hye and Japanese Prime Minister Abe Shinzo and the year-end agreement on the “comfort women” issue.  While these actions will help the two governments to work together on other issues of mutual interest, particularly in confronting the threat posed by North Korea to peace in the region in light of its fourth nuclear test, it is not a given that relations between Korea and Japan, particularly among its citizenry, will advance to the level sought by the United States.  Key benchmarks to look for in the coming year to determine the level of improvement will be action by the Japanese Diet to appropriate $8.3 million for the reparation fund; the receptivity of surviving Korean comfort women to accept the reparations (if approved) from Japan; and the status of the comfort women statute in front of the Japanese Embassy in Seoul.

How the U.S. Elections Could Impact Policy

The U.S. campaign season will kick into high gear shortly after the holidays when the first votes will be cast in the presidential caucus in Iowa on February 1st.  Unlike some other foreign policy issues, there is little difference between the two main parties in the U.S. regarding the U.S.-Korea alliance.  Relations between the U.S. and the Republic of Korea (ROK) are excellent and should not be an issue in the U.S. elections.  In addition, as the fastest growing racial group in the United States, candidates will make specific appeals to Asian-Americans for votes, particularly in the politically-sophisticated Korean-American community.

Nevertheless, the U.S. presidential elections will have a robust debate on the use of military force and diplomacy in response to terrorist and other national security threats (“hawks” vs. “doves”) and the stand-off on the Korean peninsula may be used to support their point of view.  However, because Kim Jong-un started the new year with yet another nuclear test, expect legislative action in Congress to strengthen sanctions against the DPRK and GOP presidential candidates (and, to a lesser degree, the Democratic candidates) to criticize the Obama Administration’s policy of “strategic patience” with the North as “benign neglect.”  Nonetheless, the underlying strategic importance of Asia will remain a cornerstone of U.S. foreign policy regardless of who is in office because America’s long-term challenges come from larger mega-trends that emerge from Pacific Rim, such as China’s assent on the world stage and various other economic, demographic, and environmental issues.  Also, because of the political sensitivity of trade agreements in the U.S., do not expect a Congressional vote on the Trans-Pacific Partnership (TPP) until the “lame-duck” session after the November 8th election at the earliest.  Finally, because of the lack of trust in the Obama Administration in numerous areas by the Republican-led Congress, no further legislative action on immigration reform (except more restrictions) is likely until a new president is sworn into office.

South Korean National Assembly Elections

On April 13, 2016, a national election will be held in South Korea to select all members of the National Assembly.  Because National Assembly elections are held every four years, and presidential elections every five, the two elections rarely fall in the same year and even when they do, they are not held concurrently because the former are in April and the latter in December.  The election to select President Park Geun-hye’s successor will be held in December 2017.  Presidents may only serve one term.

As in U.S. politics, South Korean National Assembly elections have the character of mid-term elections, with more attention paid to presidential elections.  They are nevertheless important because presidents have difficulty enacting legislative programs if control of the National Assembly passes into opposition hands.  The April 13, 2016 elections will be worth watching for three reasons:  (1) They will be a test of political sentiment heading into the 2017 presidential election year; (2) Because of a Constitutional Court ruling that the largest constituencies can have no more than double the population of the smallest constituencies, boundaries are now being redrawn with uncertain consequences for the parties and even the total number of National Assembly membership; and (3) They will test yet again whether the habitually riven center-left and left elements of South Korean politics are able to pull together to challenge the more unified, ruling Saenuri Party.

Cooperation Between Korea and China in the G20

Though China will utilize the G20 presidency to promote new agenda items that will prove to be far too ambitious, the need for cooperation in the forum on key issues will help foster closer ties between South Korea and China.

As the co-chair of the International Financial Architecture Working Group (IFA WG), South Korea will play an important role in China’s G20 presidency. The IFA WG is charged with advancing proposals in areas that are likely to be priorities for Beijing’s agenda, including strengthening the role of the IMF’s Special Drawing Rights and global financial safety nets.

Additionally, China and South Korea have incentives to work more closely on development and trade as slowing global trade disproportionately impacts the domestic growth of both economies. While resolving the divide on development-related trade norms continues to be too onerous, Seoul’s addition of development to the G20 agenda in 2010 help make it a potential mediator between advanced and emerging economies like China on trade issues in a period of uncertainty in the WTO.

K-Pop’s Next U.S. Breakthrough

People have been predicting the demise of the Korean Wave almost as soon as the term was coined. But there is no doubt that awareness of K-Pop has reached new heights in the United States in 2015 – with popular site Buzzfeed sending a team to LA’s KCon, Big Bang holding K-pop’s largest ever American tour, and of course Psy releasing his new video, which racked up more than 64 million views in under a month.

However, while awareness of K-pop has surely grown in the United States in the aftermath of Gangnam Style, we may not be hearing Korean on the radio again any time soon. Many Korean artists have tried and failed to make it big in the American market. 2ne1’s CL is the next at bat and may be the one to break this trend once her much-anticipated American debut album gets a release date. In many ways she is the ideal candidate to break the trend. Fluent in English, free from the bubblegum cuteness of many idol groups, and supported by some of the most successful producers and collaborators in the world. Her success will largely depend on how well she is able to mold herself to the American taste – but she may just bring a little bit of her Korean pop roots into the public awareness as well.

South Korea’s Trade Policy

Because of the aforementioned political reality in the United States, South Korea will not join the TPP in 2016.  In fact, it may take a few years for Korea to formally join the TPP because of the difficulties surrounding the ratification process in TPP member countries.  As a result, after ratifying Free Trade Agreements (FTAs) with China, Vietnam, and New Zealand in 2015, the ROK is expected not to wait for the TPP and continue to negotiate a free trade agreement with five countries in Central America, a trilateral FTA with China and Japan, and the Regional Comprehensive Economic Partnership (RECP).  Because overseas markets are critically important to Korea’s domestic economy, the ROK is expected to at least make measurable progress on concluding these talks in 2016.  Because the President Park Geun-hye only has two more years left in office, it is important for these talks to conclude before then; otherwise, the benefits of these agreements will be further delayed as the new administration will review previous policies for possible adjustment.  In addition, if Korea is not able to join the TPP by December 2017, a new Korean administration will take some time to review the efficacy of joining this agreement.

Has Samsung Turned the Corner?

After nearly two years of negative earnings, Samsung saw revenue and profits increase in the 3rd quarter of 2015. The increase in profits, however, was due to growth in Samsung’s semiconductor and display divisions. The smartphone division, which faces high end challenges from Apple and low end challenges from Chinese and Indian firms like Xiaomi and Micromax, saw revenues increase but profits continue to decline as it made a misstep by under producing the popular new Edge line of phones and the Galaxy 6 underwhelmed. At the end of 2015 Samsung replaced the head of its smartphone division with Koh Dongjin who previously headed up Samsung’s mobile research and development, to return the division to profitability. With increasing competition and two years of decline, Koh’s efforts to turn Samsung’s smartphone division around will be one of the key economic issues to watch in South Korea.

Mark Tokola is the Vice President of the Korea Economic Institute of America, Phil Eskeland is the Executive Director of Operations and Policy,  Troy Stangarone is the Senior Director for Congressional Affairs and Trade, Jenna Gibson is the Director of Communications, and Kyle Ferrier is the Director of Academic Affairs and Research. The views expressed here are the authors’ alone.

Image designed by Jenna Gibson of the Korea Economic Institute of America.

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T-ara, Titanic, and Taeyeon: Pop Culture and North Korea

By Lilka Marino

Recent tensions along the Demilitarized Zone have been notable for one reason: North Korea launched rockets at loudspeakers that broadcasted an array of propaganda from regional and international news, weather reports, and economic updates from both sides of the border. Curiously enough, the program also included certain K-pop songs chosen for their uplifting and inspirational lyrics. The contents of this broadcasts were enough for Pyongyang to threaten “strong military action” should they continue. While the rest of the contents of each program seem like a logical irritant to a regime that depends on maintaining factual silence from the outside world, the innocence of K-pop seems like an unlikely candidate to cause the recent “quasi-state of war”.

In Nothing to Envy, Barbara Demick reports the official party line towards foreign media and contraband, by a defector who received this lecture at work:

Our enemies are using these specially made materials to beautify the world of imperialism and to spread their utterly rotten, bourgeoisie lifestyles. If we allow ourselves to be affected by these unusual materials, our revolutionary mind-set and class awareness will be paralyzed and our absolute idolization for the Marshal [Kim Il-sung] will disappear.[1]

While a government such as the Kim regime does rely on its self imposed isolation, and keeping its people from outside influences[2], the reality does not reflect the regime’s expectations. In August, three North Koreans were executed for watching South Korean television programs on their mobile phones.  This execution, along with the threat to destroy the loudspeakers is indicative of the growing fascination with the outside world and pop culture, along with the recent demand for designer handbags and high heeled shoes, trends in East Asia that North Korean women began to emulate when Ri Sol-ju, wife of Kim Jong-eun, adopted them for herself. Foreign culture has settled into the isolated nation, and will not dissipate anytime soon.

While most foreign media and culture was discouraged in North Korea, the interest in foreign culture started with legal translations of Western classics in the mid-1980s. Kim Il-sung ordered these translations in limited quantities for writers to improve their ability; translations included Victor Hugo’s Les Miserables and Thomas Hardy’s Tess of the D’Urbervilles. A decade later, these books were made available for the general public to purchase.

Quite possibly the most popular work to be translated, and possibly the most famous example of Pyongyang’s fascination with foreign culture was Gone With the Wind, first translated in a three volume series and released along with other American novels from the 1900s-1960s. The novel permeates North Korean society. When teaching English at PUST, Suki Kim reported that the only American book her college students were aware of was Margaret Mitchell’s work. The typically restricted film adaptation is shown to upper class North Koreans to teach English; one defector reported that the film was a favorite of the elite. Consequently, when the Samjiyon tablet made its infamous debut in 2013, it came preloaded with not only a ported version of Angry Birds, but also Gone With the Wind.

The biggest indication of national fascination is shown by the people’s love of the novel. Gone With the Wind has even made an appearance in talks between North Korean envoys and the United States, with the former apparently quoting “Frankly, Scarlett, I don’t give a damn” during negotiations. One defector reported that for a time, one could not go into Pyongyang and not avoid discussing the work, and that everyone had an opinion about strong Scarlett O’Hara, swashbuckling Rhett Butler, and the destruction of the Confederacy by the Union’s hands. It is the latter that experts speculate that holds the most appeal to North Koreans, along with the plucky heroine, who manages to rebuild and prosper after losing everything to war.

Regardless of what message North Koreans heard from Mitchell’s work, it was clear that the average North Korean is hungry for information from the outside world. This hunger would not always be fed through legal means. In the jammadang open-air markets, one student bought and read a translated book from Russia regarding how capitalism had evolved since Marx wrote his Manifesto, and realized he was being kept in the dark on purpose. How could South Korea and China be worse off than North Korea if Chinese and South Korean goods were pouring into the jammadang?[3]  Another defector reported seeing pirated DVDs and portable DVD players. These DVDs were both Hollywood movies and episodes of South Korean dramas, which sold quickly.[4] A market grew from the demand for media in particular; by 2013, brokers would wait in markets for buyers, who would ask them for the next episodes, waiting only a few weeks after their initial airing in South Korea.

These brokers, usually working with a group known as the North Korea Strategy Center (which focuses on smuggling foreign media into North Korea), feed the demand for drams, movies, eBooks, and music. They are responsible for bringing 3,000 thumb drives into the nation annually. Founder Kang Chol-hwan likened this media to the infamous “red pill” from the Matrix franchise. One broker, a defector by the name of Jung Kwang-il, is another smuggler who deals exclusively with delivering foreign media to the jammadang. He has documented his practice of delivering laptops, radios, thumb drives, and DVDs to North Korean sellers on PBS Frontline. When asked why he risked his life to do this, Jung said:

[North Koreans are] sharing thumb drives a lot. Even officials have one or two. North Korea is trying to hunt them down because the thing that changes people’s mindsets is popular culture. It probably has the most important role in bringing about democracy in North Korea.

It’s been reported that almost half of the North Koreans who defect had watched foreign television, even though it’s illegal. Countless defectors cite foreign pop culture as the spark that made them start doubting North Korea. Park Yeon-mi credited the popular film Titanic as starting a “moral crisis”, as both the idea of a man sacrificing his life for a woman as well as the economic development of the early twentieth century being far more advanced than what she had in the twentieth-first century in North Korea would aid her family’s decision to leave.

Surveys of defectors suggest that more than a million North Koreans listen to illegal foreign radio. A fisherman accidentally picked up a South Korean radio program with two women arguing over a parking spot, which was an inconceivable notion to him, as he could not imagine a scenario where there were so many cars that anyone would have to fight over parking.[5] While mp3 and mp4 players are legal in North Korea, downloading foreign media to them is definitely not. Yet one defector theorized that if you “cracked down” on high school and university students who owned the devices in North Korea, all of them would have South Korean music on them.

South Korean dramas were especially powerful to defectors; the sheer beauty in the clothing of the actors and the bustling streets with healthy looking actors and flashy billboards advertising all sorts of goods made watching more addictive; it was fun to picture living in a trendy Seoul apartment until one realized that the reality reflected in Pyongyang’s propaganda did not match up to what they were watching on their portable DVD players. Expert Andrei Lankov has described the fascination with South Korean pop culture within North Korea as, possibly, “the single most important development of the last ten years”.

Seoul has even created media targeted at North Koreans in order to take advantage of this growing interest. One such example is Open Radio for North Korea, a radio station staffed by defectors that broadcast news and personal messages towards Pyongyang. Another is the television program known as Now On My Way to Meet You, which stars North Korean women who now live in Seoul. Part news, part variety show, and part beauty contest, the show aims to show North Koreans the truth about life in the outside world and to especially empower other female defectors. One star even said that she believed that her friends “back home” watch it, fantasize about life south of the DMZ, and even want to defect, too.

Despite the growing demand for foreign media, Kim Jong Un has reportedly sent his security forces house to house, searching for illegal DVDs, and in November 2013 ordered the execution of as many as 80 people, some for watching foreign television. Authorities punished thirty college students with hard labor for watching “Until the Azalea Blooms” on their cell phones last June. Despite the death toll attributed to consuming foreign pop culture, North Koreans still are willing to risk their lives distributing and owning music videos, DVDs, clothes, books, and so much more from the outside world. With this forbidden fruit comes knowledge, and with knowledge, agency.

A young defector summed the allure of pop culture to North Koreans best: “No matter how many people die, the sensational popularity doesn’t die…that is the power of culture.”

Lilka Marino received her Masters of Arts in Liberal Studies from Hollins University with a double concentration in leadership theory and social sciences. Her interests include North Korean politics, Korean history, and traditional Korean culture. The views expressed here are her own.

Photo from Darrell Miller’s photostream on flickr Creative Commons.

[1] Demick, Barbara. Nothing to Envy: Ordinary Lives in North Korea. New York. Spiegel and Grau, 2009. Print.  p 255.

[2] Myers, B. R. The Cleanest Race: How North Koreans See Themselves and Why It Matters. Brooklyn, N.Y.: Melville House, 2010. Print. p 55-75

[3] Demick, pg. 260.

[4] Demick, pg. 255.

[5] Demick, pg. 260

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Should the Proposed New Cyber Norms Address North Korea?

By Troy Stangarone

Recent news reports have indicated that the United States and China hope to announce an initial code of conduct governing the use of cyber weapons in advance of President Xi Jinping’s summit meeting with President Barack Obama, while President Xi in Seattle stated that he was willing to work with the United States to address cybercrime. Although short of being a treaty, the agreement would represent the first attempt to develop an arms control agreement for cyberspace and could have longer-term implications, including for addressing cyber threats from North Korea.

Unlike nuclear, chemical, and biological weapons, there are no international norms or agreements governing the actions of state actors in cyberspace.  Instead, cyberspace in a sense is a modern version of the Wild West – an ungoverned land of promise. While the internet has changed the way people communicate and shop, it also holds the potential to be weaponized in the case of war between states. However, because damage from cyber attacks is difficult to attribute and disputes exist over what are legitimate forms of espionage through the internet and what crosses the line into belligerency, states have been unable to craft norms for the use of cyber weapons.

As the United States and China begin to shape an informal, and perhaps later formal, understanding of what is and not acceptable in cyberspace, North Korea should receive special attention in any discussions and ought to be a topic that President Obama raises in his meeting with President Xi. If President Xi is sincere about cooperating with the United States on cybercrime, North Korea is one area where China could play a unique role as North Korea’s access to the internet primarily runs through China with a satellite link to Germany sometimes used to boost the connection. It is also believed that Pyongyang’s cyber division, Bureau 121, operates out of China.

While last year’s attack on Sony Pictures and subsequent threats by North Korea to go after theaters that showed “The Interview” are well known, a study of cyber incidents between states from 2001-2011 indicates that after China most come from North Korea. Of the 111 cyber incidents initiated during that period 14 were initiated by North Korea. Ten were against South Korea, three against the United States, and one against Japan. In the case of South Korea, North Korea is believed to have previously attacked South Korea’s banking and media outlets in 2013.

In the cyber discussions between the United States and China, the talks are believed to focus on a code of conduct put forward earlier this year by the United Nations. While the two sides may not embrace all aspects of the UN recommendations, two could potentially apply to North Korea if adopted in the upcoming summit or in future talks. The first deals with the rules and norms of cyberspace and calls for states to “… not knowingly allow their territory to be used for internationally wrongful acts using ICTs.” The second, dealing with confidence building measures, calls on states to “Cooperate, in a manner consistent with domestic and international law, with requests from other States in investigating ICT-related crime or use of ICTs for terrorist purposes or to mitigate malicious ICT activity emanating from their territory.”

These norms and confidence building measures could apply to North Korea in two ways. In regards to norms, the United States and South Korea should encourage China to not allow its territory to be used for “wrongful acts” and to close down Bureau 121’s operations inside China. While from the perspective of confidence building measures, it would be a positive step in addressing potential cybercrime if China were to agree to cooperate in investigating suspected North Korean attacks and to shut off North Korea’s access to the internet if there is a strong evidence that an ongoing attack is emanating from North Korea.

Of course, even if China were to take these steps North Korea would have other options for conducting cyber warfare. North Korea also borders Russia which could provide potential internet access if China were to curtail Pyongyang’s access and other states, such as Iran, could potentially offer to host North Korean cyber units. However, despite these challenges, steps by the United States and China to develop international norms for conduct in cyberspace could in the long-run help to address the problem of North Korean cyber attacks.

Troy Stangarone is the Senior Director of Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from U.S. Embassy The Hague’s photostream on flickr Creative Commons.

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How North and South Korea Have Changed Since the Korean War

With the 70th anniversary of the end of World War II over the weekend, KEI takes a look back at what has changed on the Korean Peninsula from the 1945 to today. The three boxes compare a unified peninsula before the Korean War to North and South Korea in the 2010s. By looking at GDP, economic production, the number of radio stations, literacy and urban population, it becomes clear how far the peninsula has come in the past seven decades and how far apart its two halves remain today.

SK-NK Graphic1

Graphic created by Jenna Gibson, Associate Director for Communication Technology and Programs at the Korea Economic Institute of America, with assistance from Bradley Sancken, Jina Shin, Christopher Kang, and Lilka Marino at the Korea Economic Institute of America.

Photo a composite of photos by bradhamonds of Seoul and lawrenceyeah of Pyongyang on flickr Creative Commons.


CIA World Factbook

38 North

“Japanese Colonialism and Korean Economic Development, 1910-1945”

Maddison Project

“The Population of Korea”

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What Might a Proportional Response to North Korea’s Sony Hack Look Like?

By Troy Stangarone

North Korea’s cyber attack on Sony Pictures Entertainment and the subsequent threats to target theaters that screened “The Interview” have had a chilling effect beyond Sony’s decision not to release it on Christmas day. The decision to withdraw “The Interview” from release has raised important questions regarding freedom of speech and how best to approach future cyber attacks by North Korea or other actors.

What We Know About the Hack

In October, hackers, unidentified at the time but suspected to be North Korean, attacked Sony’s computer network and stole a large trove of documents and released five movies on-line causing the studio financial harm and embarrassment as internal documents and e-mails were slowly leaked. At the time, other suspects included disgruntled former employees who had indicated that Sony was vulnerable to cyber attacks or that the Guardians of Peace, who claimed responsibility, could be an unknown group of hackers. However, an investigation into the evidence has now indicated otherwise. In his press conference on December 19, President Barack Obama confirmed that it was North Korea that engaged in the attack while the FBI announced that it had reached this conclusion based largely on the following information:

  • Technical analysis of the data deletion malware used in this attack revealed links to other malware that the FBI knows North Korean actors previously developed. For example, there were similarities in specific lines of code, encryption algorithms, data deletion methods, and compromised networks.
  • The FBI also observed significant overlap between the infrastructure used in this attack and other malicious cyber activity the U.S. government has previously linked directly to North Korea. For example, the FBI discovered that several Internet protocol (IP) addresses associated with known North Korean infrastructure communicated with IP addresses that were hardcoded into the data deletion malware used in this attack.
  • Separately, the tools used in the SPE attack have similarities to a cyber attack in March of last year against South Korean banks and media outlets, which was carried out by North Korea.

The Fallout from the Hack

The fallout from the hack has been significant. On the financial side, Sony has likely lost hundreds of millions of dollars in lost revenue from pulling “The Interview” and other films that have been released on-line. Shortly after Sony announced its decision, two other movie studies took similar actions. Paramount Pictures has pulled screenings of 2004’s Team America from theaters, while Fox has pulled the plug on the Steve Carrell movie “Pyongyang” which was set to start filming next year. The capitulation to North Korea’s threats have raised questions about freedom of speech and how best to respond to cyber attacks.

Green lighting a film that portrays the assassination of a sitting world leader was likely unwise from the beginning, even one from a regime with the human rights record of North Korea. North Korea has previously demonstrated a willingness to use cyber attacks against private entities that believes portray it unfairly. In 2013, it attacked South Korean TV networks who it had accused of covering it unfairly.

However, Sony’s subsequent decision to give into North Korean pressure after theaters began to pull out raises larger issues regarding free speech and cyber intimidation. As the President noted, what precedent does this now set for other leaders who do not like how they are portrayed in a documentary or in the news. Will studios and news agencies start self-censoring their films or reporting on controversial world leaders to avoid being the targets of attacks? Additionally, has Sony now signaled to other groups that cyber attacks on entertainment and news agencies could be an effective tool for achieving their goals? How this ultimately affects artists’ ability to express themselves and reporters’ ability to report stories accurately may be the biggest fallout from North Korea’s attacks.

What Would Be a Proportional Response?

President Obama in his press conference indicated that the United States will respond to this attack in a proportional manner at a time of the United States’ choosing. As the United States considers its options, there are likely a range of things that will come into consideration.

While we now know that North Korea conducted the attack, its attack was on a private institution rather than an attack on the government. Does that mean that any response should be proportionally less than if a government institution was attacked, which could be considered a direct act of war? In the age of cyber warfare, this is a gray area. The United States has not previously come to the defense of U.S. businesses that have been hacked through means other than law enforcement. Then there is the question of the nature of a cyber attack on a business. Is a cyber attack on a business the same as a kinetic attack on a business? As the administration draws up it plans, it will likely seek to demonstrate to North Korea and other potential attackers that there are costs for attacking private institutions as well as a direct attack on government institutions.

There is also the question of escalation. How does the United States design a response that extracts a cost from Pyongyang for its actions, but that does so in a manner that will not lead to an escalation of attacks? This means that a kinetic attack is likely off the table as it would come with a high probability of a response against the United States or one of its allies. More likely would be some combination of cyber attacks against North Korea, likely in ways that will not be publically noticeable, and increased pressure on banks to cut off North Korea’s finance. The United States will also likely privately pressure China to shut down North Korean cyber facilities operating inside Chinese territory.

Unlike many of the previous cyber attacks on U.S. businesses or websites of government or private institutions around the world that were designed to acquire financial resources or intellectual property, North Korea’s attacks on Sony are the most politically motivated since Russia’s suspected attacks on Estonia in 2007. They are in essence an attempt to change the policy of a company to one more liking to the regime in Pyongyang and we have already seen the chilling effect they could have on free speech. While Paramount may simply be trying to avoid controversy by cancelling showings of the previously released “Team America,” Fox’s decision to cancel the as yet filmed “Pyongyang” shows the potentially farther reaching implications. For this reason, it is appropriate that the United States take more direct action to discourage similar attempts by North Korea or other actors in the future.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade for the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from Cristal’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.