Geopolitics

After Stabbing At Sea, Old Animosities Surface Between China And South Korea

Analysis: When a Chinese fisherman was accused of the fatal stabbing of a South Korean coast guard officer public outrage came quickly from both countries. The incident shows the fragility of all the new talk of regional cooperation when ancient mistrust

A fishing boat near Shangai (Bruce Tuten)
A fishing boat near Shangai (Bruce Tuten)
Wang Xiaoxia

BEIJING - It began two weeks ago, when a South Korean Coast Guard officer was stabbed to death by a Chinese fisherman.

In both countries, public reaction to the incident was swift and virulent. South Koreans took to the streets to burn Chinese flags and lay siege to the Chinese embassy. In China, anti-Korean sentiment was also stoked. Even Japan was alarmed.

On the diplomatic front, a Chinese Foreign Ministry spokesman expressed the standard regrets, while South Korean authorities announced major new plans for "an integrated approach to eradicate illegal fishing by Chinese boats." South Korea also vowed to invest 932 billion won ($806 million) over the next four years for combating illegal fishing, as well as increasing the punishments for illegal fishing.

But perhaps the strongest reaction was Seoul's decision that its coast guards will from now on carry guns and are authorized to fire if necessary when dealing with illegal fishing activities.

It is not uncommon internationally for marine police to use force to intimidate or enforce expulsion. In most cases, the maritime law enforcement officers open fire when the perpetrators try to escape or the vessel does not accept examination.

In a 2006 incident a Japanese fishing boat ignored a warning and tried to escape from a Russian patrol ship. The Russian border guards fatally shot one of the Japanese crew.

Force is often necessary because civilian vessels or fishing boats are often used in smuggling, drug trafficking, or even for military intelligence purposes.

During the Cold War, all sorts of ocean fishing vessels and tugs from the Soviet Union used to trail behind American aircraft carriers. Chinese naval maneuvers often encounter many "foreign observers."

What one should ponder is why a simple criminal case can touch so many people's nerves, and in particular, provoke such over-reaction from South Koreans?

We have already seen in the past how minor civil disputes have too often turned into major Sino-South Korea, Sino-Japan or Japan-South Korea diplomatic events.

The leaders of these three countries are seeking to promote regional economic integration. Their academics are discussing a "Non-Western style East Asia Cultural Circle." But we should seriously consider whether or not, under the current mutual mistrust of their people, such an alliance can actually be carried out.

The South Korean coast guards will now be carrying guns when enforcing their duty. So what?

Read the original article in Chinese

Photo - Bruce Tuten

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Society

Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum

-Analysis-

SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.


It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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