A Korean Currency Crisis Is Close at Hand—The Reality of the Korean Economy Supported by Japan’s Credit Guarantees

Published on August 31, 2019.
Based on a dialogue among Yoshiko Sakurai, Rui Abiru, and Kadota Ryusho, this chapter discusses South Korea’s wartime labor rulings, Japan’s tightened export controls, the reporting stance of the Asahi Shimbun, South Korea’s servility toward great powers and exaggerated self-regard, and the issue of Japanese banks providing credit guarantees for Korean companies.
It argues that Japan’s firm stance is the starting point for a true Japan–South Korea relationship.

Published on August 31, 2019.
For Korean companies, including Samsung… because Korean banks alone have low international credibility… Japanese banks are guaranteeing their credit in order to support Korea.
The following is a chapter published on August 8, 2019, under the title: It is also a country of Yaro Jidai, believing itself to be a greater power than it really is.
Given its history of having regarded China as its suzerain, this may be unavoidable, but if one takes a weak-kneed attitude toward such a country, it will only become increasingly arrogant.
The following is a continuation of the previous chapter.
Sakurai
It writes that “senior-level talks between diplomatic authorities should urgently seek a breakthrough,” but the so-called wartime labor ruling is also a matter that was completely settled by the Japan–South Korea Claims Agreement.
Article 3 of the Japan–South Korea Claims Agreement states that if a dispute arises, the parties should hold discussions.
Japan has followed this and, for the past six months, has called on South Korea, saying, “Let us talk,” yet South Korea has not responded at all.
What on earth does the Asahi want Japan to do beyond this?
Abiru
The Japanese government has spoken quite strongly to South Korea, but the other side simply lets it go in one ear and out the other.
From the beginning, it has no intention of talking.
It is useless to say “talk more” to such an opponent.
Either the Asahi understands nothing, or it has no serious intention of solving this problem.
Unless some form of actual force is involved, South Korea will not understand.
Sakurai
To begin with, the strengthening of export controls is not an “embargo.”
The EU has not designated South Korea as a white country.
It treats South Korea in the same way as many other countries.
All Japan is doing through this measure is asking South Korea to go through the same procedures.
That is all it is, and therefore the EU is not criticizing Japan over the export of semiconductor materials.
It accepts this as a standard method.
The Asahi and other leftist media do not report this overall picture.
Export Controls Will Build Japan–South Korea Friendship
Abiru
For example, at the party leaders’ debate on July 3, Prime Minister Abe properly stated something to that effect.
A reporter from the Asahi asked about the export-control issue, saying, “Isn’t this kind of retaliatory measure wrong?”
In other words, the Asahi Shimbun was declaring that it is not a Japanese newspaper but a Korean newspaper.
Prime Minister Abe refuted this, saying, “That perception is mistaken.”
Taking into account the fact that Japan is also a member of the Wassenaar Arrangement, which advocates preventing the transfer of conventional weapons and related technologies that damage regional stability—the export-control regime established after the dissolution of COCOM, an international framework for controlling the export of conventional arms and related dual-use goods and technologies—he said the following.
“It is an obligation for each country to fulfill trade controls for security purposes.
When the other country does not keep its promises, we cannot grant preferential treatment, and therefore Japan’s review of its controls is a natural judgment.
It is absolutely not a violation of the WTO.”
To continue granting preferential treatment to a country that keeps neither promises nor treaties is a betrayal of Western countries and liberal nations, and therefore this is a natural measure.
Kadota
South Korea is a country of sadaejuui, servility toward the great, bowing before the strong and acting overbearing toward the weak.
Unless one deals resolutely with such a country, one will be looked down upon, and an equal relationship cannot be built.
In other words, for the sake of a true Japan–South Korea relationship, Japan has no choice but to take a proper attitude.
That is why I have consistently argued that imposing regulations on South Korea is important.
This is the first time Japan has dealt resolutely with South Korea.
If there is to be true Japan–South Korea friendship in the future, I think these export controls are its starting point.
A Korean Currency Crisis Is Close at Hand
Abiru
In addition to its sadaejuui, its servility toward great powers, South Korea is also a country of Yaro Jidai, believing itself to be a greater power than it really is.
Given its history of having regarded China as its suzerain, this may be unavoidable, but if one takes a weak-kneed attitude toward such a country, it will only become increasingly arrogant.
After all, dialogue alone is not enough; unless it is accompanied by actual force such as sanctions, there is no point in talking.
Kadota
South Korea has shown sufficient respect toward the United States and China.
That is because they are strong.
They present their demands as nations with force.
In human relations and international relations alike, it is important to pay respect to the other party and maintain a certain degree of moderation.
However, South Korea has never had either respect or moderation toward Japan.
That is because Japan had never once taken a resolute attitude toward South Korea.
Therefore South Korea has continued looking down on Japan and has thought that it may treat Japan however it likes.
Unless that is corrected, a true Japan–South Korea relationship can never be born.
Abiru
That is why South Korea cannot complain to China.
South Korea still insists that the Sea of Japan should be called the East Sea, but it does not complain that the sea to the west, the “Yellow Sea,” should be called by the Korean name “West Sea.”
That is because the Yellow Sea faces China.
Several years ago, when I spoke with a famous Korean university president, he said the following.
“Koreans actually dislike Chinese people.
They behave just like a suzerain state and act arrogantly.
But when they come on strong, Koreans become unable to say anything.
It has already been engraved into their DNA.”
Leaving aside whether the DNA theory is correct, I thought that this must be what Korean habits are like.
Kadota
That is an interesting episode.
Precisely for that reason, there is a possibility that a true Japan–South Korea relationship may begin this time.
For that purpose, second and third rounds of regulations are still necessary.
Abiru
The government has already prepared one hundred sanction options, and depending on how the export controls are operated, they can be strengthened or weakened.
If South Korea becomes meek, Japan can loosen them; if it becomes brazen like a thief, Japan can tighten them; the Japanese government is handling this with a range of options.
The other day, when I spoke with a senior official of the Ministry of Foreign Affairs, he said the following.
“In any case, the Moon Jae-in administration cannot solve the problem.
As far as we are concerned, that causes us no trouble.
Even if Japan–South Korea relations remain cold for the next ten or twenty years, Japan will not be troubled at all.”
That is the current atmosphere in the Japanese government 兔体.
Kadota
If pro-Korean factions in the LDP, such as the Kochikai and Heisei Ken, are held down and the export controls proceed as they are, the Korean economy will suffer major damage.
Because South Korea raised the minimum wage, its youth perceived unemployment rate—calculated by treating those preparing for employment or in incomplete employment conditions also as unemployed—has reached 24%, the highest figure in history.
These export controls directly hit semiconductor manufacturing, which is a core industry.
A Korean currency crisis is right before our eyes.
Sakurai
As an additional measure, there are even voices discussing the cancellation of credit guarantees.
For Korean companies, including Samsung, Korean banks provide credit guarantees.
However, because Korean banks alone have low international credibility, unless banks from countries with high credibility provide guarantees, they cannot satisfactorily issue letters of credit accompanying trade—payment guarantees issued by banks as a means of facilitating trade settlement.
Therefore, Japanese banks are guaranteeing their credit in order to support Korea.
If Japan were to stop guaranteeing the letters of credit accompanying Korean trade, other countries might follow Japan’s lead, and the impact on the Korean economy would be incalculable.
Japan has no intention of driving South Korea that far into a corner, but such things also need to be used as cards in negotiations.
This essay continues.

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