This chapter draws from Masahiro Miyazaki and Tetsuya Watanabe’s The Corona Great Depression: The World Excludes China, discussing how South Korea’s dependence on China, combined with the Wuhan coronavirus, falling exports, currency depreciation, and financial instability, may lead to a third currency crisis. It argues that Japan has no need to rescue South Korea through a renewed currency swap agreement, given South Korea’s repeated insults toward Japan over issues such as wartime labor, demands for an imperial apology, and Tokyo Olympics radiation posters.

June 18, 2020

But Japan should ignore it.
There is no need to extend a helping hand to a country that has repeatedly insulted Japan through the wartime labor issue, the demand for an apology from the Emperor, Tokyo Olympics radiation posters, and so on.

The following is from Masahiro Miyazaki vs. Tetsuya Watanabe’s “The Corona Great Depression: The World Excludes China,” published on May 1.
Chapter 4
The Tragedy of a World Dependent on the Chinese Economy
South Korea Faces Its Third Currency Crisis
NHK has not reported at all the facts revealed in this chapter.
The same is probably true of broadcasters such as TBS and TV Asahi, and of newspapers such as the Asahi Shimbun.
Watanabe:
South Korea, which is highly dependent on China, has been heavily affected, as shown by Hyundai Motor’s suspension of all its factories within South Korea.
The same situation applies to semiconductors.
The Wuhan coronavirus and the sharp fall in crude oil prices have overlapped, causing the entire real economy to slump, from households and small self-employed businesses to major core industries such as aviation, oil, and chemicals.
Six South Korean LCCs have requested emergency financial support from the government.
Asiana Airlines cut the March salaries of all employees.
In addition, the number of countries and regions imposing entry restrictions on South Korea has exceeded 143, as of March 17, and this is a major blow to South Korea, whose export dependence is about 40 percent and whose import dependence is 31 percent.
South Korea took countermeasures only against Japan’s entry restrictions and suspended the visa exemption for Japanese nationals, but this means that it cut its own supply chain with Japan and is strangling itself.
In March, the average daily export amount declined by as much as 2.5 percent.
Also, debt has increased for both companies and households, and financial anxiety is rising.
Moreover, the won is weakening as exports decline and foreign currency flows out.
In March, it frequently fell below the key level of 1,200 won to the dollar.
On March 19, it broke through 1,270 won, and the 1,300-won range came into view.
It is approaching the 1,400-won range seen during the currency crises of 1997 and 2008.
As I mentioned earlier, after the Lehman Shock, the FRB concluded swap agreements with the world’s four major banks and constructed a regional agency structure.
This has stabilized global finance, but South Korea is the country left outside that structure.
It has no swap agreement with Japan, and swap interest rates have soared.
China is in a similar situation.
Although there is a swap arrangement, its amount is only about 3 trillion yen, making large-scale fundraising difficult.
On March 13, as a desperate measure, South Korea announced a six-month ban on short selling in the stock market.
Miyazaki:
It is gradually becoming like China.
Watanabe:
South Korea will fall into its third currency crisis.
Even in the past currency crises, it was Japan that supported South Korea.
South Korea is now scheming to re-conclude the Japan-South Korea currency swap that it kicked Japan aside and terminated in 2015.
But Japan should ignore it.
There is no need to extend a helping hand to a country that has repeatedly insulted Japan through the wartime labor issue, the demand for an apology from the Emperor, Tokyo Olympics radiation posters, and so on.
Remainder omitted.