Korea JoongAng Daily - Daily News from Korea

Chinese President Xi Jinping begins a two-day state visit to North Korea Monday, coinciding with the 65th anniversary of the Sino-North Korean friendship treaty. The summit is expected to focus on restoring bilateral ties and expanding economic and security cooperation.

Ahead of the visit, North Korea has intensified its display of nuclear capabilities. After inspecting nuclear material production facilities, North Korean leader Kim Jong-un continued a series of public appearances highlighting the country's nuclear and missile programs. On Sunday, his sister, Kim Yo-jong, declared that North Korea's status as a nuclear weapons state was "an irreversible red line."

She also rejected reports that Beijing and Washington had reaffirmed their support for the denuclearization of the Korean Peninsula during last month's U.S.-China summit, calling them "fabricated" and "groundless." The message appeared aimed not only at the United States but also at China, signaling that denuclearization is no longer open for discussion.

The situation differs markedly from Xi's previous visit to Pyongyang in 2019. Even after the collapse of the Hanoi summit between North Korea and the United States, Pyongyang did not entirely reject the framework of denuclearization negotiations. Today, however, the North's position is that the issue should not even be raised.

Since the outbreak of the war in Ukraine, North Korea has expanded its strategic room for maneuver through closer ties with Russia. Emboldened by that relationship, Pyongyang is pressing not only Washington but also Beijing to accept the reality of its nuclear arsenal.

China, for its part, has strong incentives to keep North Korea within its sphere of influence. Xi's visit could accelerate discussions on economic cooperation, logistics projects and port development. The concern is that the longstanding principle of denuclearization may receive less attention while new security uncertainties emerge in Northeast Asia and the East Sea region.

If China focuses primarily on managing relations with Pyongyang while effectively tolerating North Korea's nuclear development, prospects for resolving the nuclear issue will grow even dimmer. A shift from pursuing denuclearization to merely managing or freezing the North's nuclear program could amount to de facto recognition of its nuclear status.

The Korean government should closely analyze the outcome of the summit and actively engage diplomatic channels with Beijing. At the same time, it must maintain the Korea-U. S. alliance and trilateral security cooperation among Korea, the United States and Japan.

As North Korea continues to advance its nuclear and missile capabilities while cooperation among North Korea, China and Russia deepens, strong alliances and international coordination remain the most realistic foundation for safeguarding Korea's security. Xi's trip to Pyongyang must not become an occasion that legitimizes North Korea's pursuit of permanent nuclear weapons status.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

A teenager who discovers BTS today may grow up to book trips to Seoul, buy Korean products and carry a favorable image of Korea well into adulthood.

That is the long-term bet behind a recent analyst report from NH Investment & Securities, which argued that young BTS fans could eventually translate their fandom into lasting economic gains for Korea, enough to buoy the country's GDP decades from now.

There is a precedent nearby, which may at first sound ambitious. Japan spent decades turning anime, manga, games and characters into soft power, as generations raised on Nintendo, Pokémon and Studio Ghibli grew into adults who feel Japan is familiar and culturally close to them.

Now, Korea is facing a similar moment, but one question remains: Can BTS — and K-pop, more broadly — build the kind of generational longevity that Japanese pop culture has enjoyed so far?

'K-imprinted' generation

The NH Investment & Securities report, released May 24, projected that BTS's global fandom, collectively known as ARMY, could boost Korea's annual GDP by 0.1 to 0.35 percentage points through increased tourism by 2040. The estimate is based partly on the demographic composition of the fandom, as a 2022 fan-conducted census cited by the report found that 84 percent of global ARMY members were under 29, suggesting that many are still years away from their prime earning and spending years.

The argument is primarily built on the premise of the cohort effect — the idea that cultural preferences formed in youth can shape spending behavior later in life.

In fandom economies, the report argues, demand created by specific artists can extend well beyond albums and concerts, altering a fan's broader consumer path. It divided fandom consumption into four stages: imprinting, fandom activation, peak consumption and legacy consumption, with each stage roughly a decade apart.

For BTS, the report argued, the imprinting stage took place through the early and mid-2020s, while the fandom activation stage is now beginning. If that trajectory holds, BTS-related consumption could peak in the 2030s, when these fans will have greater purchasing power.

"Because the K-fandom age group is still concentrated among teens and people in their 20s, with relatively low income levels, the degree to which fandom consumption may affect GDP remains limited," noted Jung Yeo-kyung, a researcher at NH Investment & Securities and the report's primary author. "In the 2030s, when the K-imprinted generation gains purchasing power and returns to Korea, the impact of the K-fandom economy on GDP is expected to become more visible."

'Cool Japan' strategy

One of the clearest examples of pop culture shaping a generation's perception of a country is Japan, whose global image has long been defined partly by its pop culture including anime, manga, games and character franchises.

Japanese pop culture established its commercial presence overseas in the 1980s and 1990s through cult anime such as "Dragon Ball" (1986) and "Akira" (1988), as well as video games from Nintendo, including its first major home console game, "Super Mario Bros.," launched in 1984, and "The Legend of Zelda" in 1986. The momentum continued into the 2000s with enduring intellectual property (IP) including Pokémon.

Japan later incorporated this cultural impact into its "Cool Japan" strategy in the 2000s, after decades of anime, manga and games made the country feel familiar to global audiences. That soft power pulled in economic value as well, as spending by foreign visitors quadrupled over the past decade through 2024 — also partly fueled by a weak yen — making tourism the country's second-largest export category after cars.

"Countries with export-oriented industrial structures have been making efforts not only to build their national images but also to commercialize their nations alongside their products," wrote Kang Sung-woo, a research professor of foreign affairs at Chung-Ang University, in his 2016 paper "'Cool Japan' as Ja...

This article is by Park Eun-jee, Lee Jae-lim and read by an artificial voice.

Huang's extended visit to Korea underscores the country's evolving status within Nvidia's ecosystem — no longer just a supplier of memory chips, but an increasingly important customer for Nvidia's advanced AI processors.

His latest visit, running from Friday through Monday, centered on key demand centers ranging from gaming outlets and internet firm Naver to companies that have adopted a focus on robotics such as Hyundai Motor, Doosan and LG.

An unexpected player on the roster was Doosan, an industrial conglomerate spanning machinery and construction, but the company has become not only a supplier of a key material used in AI accelerators but a client for Nvidia platforms for developing and training robots.

In a celebratory gesture, Huang threw the ceremonial first pitch at a Doosan Bears home game at Jamsil Baseball Stadium in southern Seoul alongside Chairman Park Jeong-won.

"Business is booming, and Korea is doing very well. My partners here in Korea are very important to me," Huang told reporters on the sidelines of a Friday dinner with SK Chairman Chey Tae-won, LG's Koo Kwang-mo and Naver's Lee Hae-jin.

His final day itinerary on Monday is expected to include a meeting with Hyundai Motor Executive Chair Euisun Chung, followed by separate stops at the LG Electronics and Naver offices.

Although no specific deal had been announced as of press time on Sunday, nearly every stop on Huang's itinerary involved companies viewed as key customers or partners for Nvidia's newest AI platforms.

"Jetson Thor is widely expected to power Atlas, the humanoid robot developed by Hyundai Motor Group's affiliate Boston Dynamics," Kim Doo-un, an analyst at Hana Securities said. Jetson Thor is Nvidia's robot-focused AI processor designed to serve as the onboard computing platform for humanoids.

"RTX Spark could find applications in high-performance PCs and on-device AI systems. The result is that Korean companies are becoming increasingly intertwined with Nvidia's next wave of growth businesses, from next-generation AI accelerators and physical AI to AI PCs," Kim said, speaking about Nvidia's Arm-based system on chip and computing platform.

PC bangs on the rise

PC bangs, Korea's signature gaming cafes, emerged as recurring venues as well, serving as the first stop for the CEOs meeting with esports legend Faker on Friday and later hosting a separate gathering with Krafton Chairman Chang Byung-gyu and NC CEO Kim Taek-jin Sunday.

There, Huang pitched the upcoming RTX Spark chip that will be integrated directly into into laptops to deliver far more powerful on-device AI capabilities.

Developed through partnership with Krafton, an upcoming "co-playable character" powered by Nvidia ACE technology and optimized for the new RTX Spark laptops was demoed by Huang. The voice-activated AI acts as an interactive, real-time squad mate that can chat and strategize directly inside PUBG: Battlegrounds.

NC is also pushing its boundaries into physical AI through its subsidiary NC AI. The gaming company is developing AI systems capable of controlling robots and factory operations, while also working on models that enable robots to understand and interact with physical environments autonomously.

Memory still counts

As memory capacity remains vital to powering Nvidia's architecture, Huang pressed Korean suppliers to ramp up production of high bandwidth memory chips (HBM).

When he sat down for the star-studded dinner at a samgyeopsal (pork belly) restaurant in Mapo District, western Seoul, he noted that Nvidia's new products — such as Vera Rubin, Vera and RTX Spark — will require more memory, including high bandwidth memory and low-power double data rate, or LPDDR, memory.

Huang also acknowledged that three memory makers — Samsung, SK hynix and Micron — passed Nvidia's quality test for their HBM4, which will be fitted into the Vera Rubin platform.

The Nvidia chief had another round o...

Dipping green chili peppers into ssamjang — a thick, spicy-sweet paste — and piling grilled pork, scallions and kimchi onto a perilla leaf before wrapping it into a hefty bite is a familiar ritual at boozy Korean dinners, especially among middle-aged men, or ajeossi.

And Nvidia CEO Jensen Huang, alongside his companions SK Chairman Chey Tae-won, LG Chairman Koo Kwang-mo and Naver founder Lee Hae-jin, was at the heart of this particular, closely followed dinner in Seoul's youthful Hongik University neighborhood.

The tech titans gathered at around 7 p.m. on Friday, following Huang's arrival in the country at 1:30 p.m. the same day.

This time, the venue was the Korean barbecue restaurant Hyeongnim Jeoyo, which translates to "Brother, it's me," a name in line with last year's setting at a Kkanbu Chicken store. "Kkanbu" is Korean slang referring to a close friend or trusted companion

All four executives are undoubtedly billionaires, but it was Naver's Lee who picked up the tab, paying with the internet firm's payment service, Naver Pay.

After dinner, the four executives engaged with reporters and people who had gathered outside the restaurant for a glimpse of the high-profile meeting.

They handed out desserts, including bottles of banana milk, a popular Korean dairy drink, and bungeoppang, a fish-shaped pastry traditionally filled with sweet red bean paste.

BY PARK EUN-JEE [[email protected]]

This article is by Kim Min-young and read by an artificial voice.

PAJU, Gyeonggi — The heat hit first, then the dust. Cranes swung overhead against a hazy sky as concrete pump trucks idled below, and inside the half-built shell of Building 1, the air was thick with the grit of a site that is only about 20 percent finished.

Workers in hard hats threaded between bare concrete columns that climb five stories, past pipe racks already roughly 70 percent installed, while reporters in borrowed safety vests picked their way along a marked corridor. This raw, unfinished floor, a first-floor machine room still open to the elements, is where LG U+, the country's telco provider, on Friday chose to make its pitch.

The Paju AI Data Center, rising upon a 22,000-pyeong (72,727 square-meters) lot in Wollong-myeon, Gyeonggi, is the centerpiece of a strategy the carrier unveiled on-site to win 5 trillion won ($3.3 billion) in cumulative AI data center orders by 2030 and remake itself into what it calls an "AI Factory Operator."

With a confirmed 200-megawatt power supply, it will be the only hyperscale-class facility of its size in the greater Seoul area, capable of powering the entire capital region's generative AI services at once.

The clearest sign of demand was delivered even before the cement had dried. Building 1, due for completion next June, is already sold out. The 50-megawatt structure, carrying about 30 megawatts of actual IT load, has been fully contracted to what the company would only describe as a large customer.

LG U+ expects more than 1 trillion won in annual orders through 2030 and projects average annual revenue growth of 15 to 20 percent for the business.

Standing on the concrete floor of the unfinished building, executives sketched out a site that will eventually hold five buildings across roughly 152,000 square meters (1.64 million square feet), more than 20 football pitches of floor space.

"The competitiveness of an AI data center now depends not on the scale of the facility but on how stably you can operate the entire infrastructure," said Ahn Hyurng-gyoon, vice president of LG U+'s Enterprise AI Business Group, his keynote address competing with the ambient clatter of the site.

Ahn pointed to a surge in demand as the industry shifts from training AI models to running them, noting that monthly token-processing volumes have climbed roughly 67-fold over the past year.

Ahn organized the company's case around power, cooling, construction speed and operational stability. The power comes from a 345-kilovolt substation across the road, visible past the rebar and scaffolding, with a 154-kilovolt line as backup.

Both run underground at a depth of about nine meters, which the company said eliminates the electromagnetic field concerns that often draw complaints near data centers. Officials said the supply was locked in after a formal power-impact assessment last August, and that opposition has been muted because the site sits inside a former LG Display industrial complex.

Cooling is where the building's bones have been shaped most deliberately. Paju is being built as Korea's first hyperscale center to run both air and liquid cooling in a hybrid structure, with floor loads, waterproofing and piping engineered for liquid from the design stage. Pointing to the columns flanking the machine room, field-team official Kim Jong-jin explained that every pipe is laid so a tenant can switch to liquid the moment its servers demand it.

The primary method, direct-to-chip cooling developed with LG Electronics, attaches a cold plate to the chip and circulates coolant to pull heat away at the source, improving energy efficiency by about 24 percent over air cooling in the company's tests. All three computing floors of Building 1, floors three through five, are designed for it.

The company has spent the past year validating liquid cooling in a proof-of-concept room at its Pyeongchon center, including both direct-to-chip and immersion methods, an...

Boy band TWS will release "Dream With Us," an anthem for Korea's national football team, on Thursday, according to its agency Pledis Entertainment on Friday.

The song was written to cheer on the national team as it prepares for the 2026 FIFA World Cup in North and Central America.

Built around the message "if we believe in miracles together, then miracles begin," the track celebrates the passion of young people who rally behind a shared dream.

"Dream With Us" had its world premiere at Korea's final pretournament friendly against El Salvador in Salt Lake City on Wednesday. A promotional video posted the same day on JTBC's official social media channels shows the members dressed in red shirts, waving Korean flags and chanting "Korea, fighting!" The clip also features a preview of the song.

TWS was appointed as an ambassador for the Korea Football Association last October and has since served as a bridge between the national squad and its fans.

"We are truly happy to be able to support the national football team through music," the band said in a statement. "We will cheer with all our hearts so that the players, who have worked so hard to prepare for this World Cup, can put on a wonderful performance."

The sextet — Shinyu, Dohoon, Youngjae, Hanjin, Jihoon and Kyungmin — debuted in 2024 with the EP "Sparkling Blue" and has since released "Plot Twist" (2024), "If I'm S, Can You Be My N?" (2024) and "Countdown!" (2025).

BY LEE JIAN [[email protected]]

If Korea hopes to build a more inclusive financial system, empowering individuals to control and utilize their own data must become a central policy priority.

Kang Kyeong-hoon

The author is a professor of Business Administration at Dongguk University.

Kim Yong-beom, the presidential chief policy secretary, recently drew attention with a social media post highlighting problems in Korea's credit evaluation system. His remarks touched on a longstanding issue in finance: Traditional credit scoring often disadvantages low- and middle-credit borrowers and younger consumers.

Most credit assessment systems rely heavily on past financial records. Critics argue that this approach structurally excludes many borrowers and weakens the market for mid-interest-rate loans, creating what some describe as a "donut economy" in which the middle tier is underserved.

Alternative credit scoring has emerged as a promising solution. Governments can expand policy guarantees or policy-based lending, but such measures inevitably increase fiscal burdens. Alternative credit assessment, which focuses on current economic activity and cash flow rather than past delinquencies, can help restore financial mobility while minimizing public spending.

The idea also aligns with the current administration's push to promote AI. Data is often described as the oil of the AI era. Yet data differs from oil in an important respect. Oil is depleted when consumed, while data can be used repeatedly by multiple parties at the same time. Its value often grows when combined with other datasets.

This characteristic was highlighted in the 2020 paper "Nonrivalry and the Economics of Data" by Stanford University professors Charles Jones and Christopher Tonetti. The paper compares two ownership models.

When companies own data, they tend to restrict access to protect competitive advantages and economic rents. The result is fragmentation, reduced data utilization and lower social welfare.

When consumers own their data, however, they can share it with multiple institutions, including banks and fintech firms. Individuals benefit from broader financial opportunities while contributing to economic growth. At the same time, they can weigh privacy concerns against the benefits of sharing information and make their own decisions.

Efforts to establish data sovereignty around the world reflect these findings. The principle is straightforward: Individuals should have meaningful control over their personal data.

Examples already exist. In the United States, cash flow underwriting evaluates borrowers using real-time sales records and bank account activity rather than relying solely on credit scores or collateral. This allows small-business owners, young borrowers and financially vulnerable groups to demonstrate their creditworthiness through actual economic behavior.

Britain introduced open banking even earlier. Under the system, banks must, with customer consent, provide financial data to authorized third parties such as fintech companies. Information that was once locked inside banks can be used to obtain better products and services. Open banking is a practical example of data sovereignty in action.

Korea has moved quickly to adopt similar systems. The country launched open banking in 2019, introduced financial MyData services in 2022 and is now expanding MyData across industries. The government-led standardized application programming interface framework has produced high levels of security, stability and data quality. In theory, Korea has already built a strong foundation for alternative credit evaluation and inclusive finance.

Yet despite this infrastructure, alternative credit scoring and cash flow underwriting remain underdeveloped. The reason is that Korea's open banking and MyData systems still focus largely on payment convenience and information retrieval rather than genuine data sovereignty.

Open banking has improved user experience through services such as simple transfers and in...

This article is by Lee Jian and read by an artificial voice.

Korea and Canada announced a broad economic partnership spanning energy, critical minerals, hydrogen and defense, with Korean defense conglomerate Hanwha at the center of numerous proposals that could reshape both countries' industrial landscapes.

The announcement followed a meeting on Tuesday in Ottawa between Canada's Minister of Energy and Natural Resources Tim Hodgson and Korea's Chief of Staff to the President and Special Envoy for Strategic Economic Cooperation Kang Hoon-sik. The meeting coincided with the Korea-Canada Energy and Resource Supply Chain Cooperation Forum, which brought together senior government officials, industry leaders and investors from Canada's energy, mining, infrastructure and technology sectors.

The partnership reflects the growing weight of bilateral trade. In 2025, energy products became Canada's largest export category to Korea, valued at approximately 2.2 billion Canadian dollars ($1.6 billion), and metal ores and nonmetallic minerals ranked second at approximately 1.5 billion Canadian dollars.

Korea has already invested approximately 1.6 billion Canadian dollars in the LNG Canada project and is expected to double that to 3.2 billion Canadian dollars as future phases advance. Korea has also recently scrapped its 3 percent tariff on Canadian crude oil imports and is expected to import approximately 16 million barrels of Canadian crude this year, rising to 20 million barrels next year.

Beyond energy, Kang outlined an ambitious industrial initiative dubbed "Project Beaver" in an interview with CTV News. The proposal is tied to Hanwha Ocean's bid to build submarines for the Canadian military — known as the Canadian Patrol Submarine Project, or CPSP — and would pair that defense contract with broader economic investment.

Under the plan, Hanwha Ocean said it would invest more than 3.1 billion Canadian dollars and create approximately 9,000 jobs, with a focus on building out a hydrogen transportation ecosystem in Canada. That would include a hydrogen liquefaction facility in British Columbia, a network of hydrogen refueling stations across British Columbia and Alberta and a factory in Ontario to manufacture hydrogen-powered commercial vehicles.

The company's CPSP proposal, submitted in late April, is the centerpiece of its Canadian ambitions. Independent analysis estimates the proposal could generate 96.3 billion Canadian dollars in GDP impact and support more than 433,000 Canadian jobs over the initial acquisition period from 2026 to 2044.

Flavio Volpe, president of the Automotive Parts Manufacturers' Association (APMA), said after signing a memorandum of understanding with Algoma and Hanwha on June 1 that the partnership could create 30,000 direct and indirect jobs in Ontario alone.

Hanwha Ocean said it has committed to delivering the first four submarines under the CPSP by 2035, with all 12 submarines deliverable by 2043 — offering Canada an accelerated path to recapitalizing its submarine fleet.

The Kospi is now approaching 9,000. Yet only a minority seem truly content. Whether they have made money or not, many retail investors remain anxious.

Park Su-ryon

The author is the deputy editor of Content Division Three and the head of corporate research at the JoongAng Ilbo.

News of Nvidia CEO Jensen Huang's visit to Korea sent the stock market swinging wildly over the past week.

Shares of companies scheduled to meet Huang surged, with some reaching daily price limits or record highs, only to fall a day or two later as investors rushed to take profits.

The most striking example came when rumors spread that Huang would throw out the ceremonial first pitch at a baseball game wearing a Doosan uniform. Shares of listed Doosan Group companies jumped across the board on the speculation. Ironically, some of those stocks fell on Thursday, when the pitching appearance was officially announced.

Even shares of LG Electronics and Naver, which had shown little reaction to the AI boom, climbed sharply on reports that Huang would attend a dinner gathering with company executives. Retail investors embraced a simple narrative: A meeting with Jensen Huang meant a company would benefit from AI. Day traders seeking quick profits amplified the volatility. What dominated the market was less faith in artificial intelligence than the pursuit of money.

Some may argue that such enthusiasm is inevitable in a country that is home to Samsung Electronics and SK hynix, two of the world's leading AI-related chipmakers. Others may note that similar speculative behavior exists in U.S. markets.

Yet for many retail investors, especially those investing with borrowed money, the reality is far less appealing. What appears to some as a market full of opportunities can be a dangerous environment for individuals exposed to heavy losses.

The government has also contributed to the fever. At the end of last month, Korea introduced its first exchange-traded funds (ETF) designed to deliver twice the daily return of a single stock, namely Samsung Electronics or SK hynix. The move was intended in part to prevent funds from flowing into similar products listed in Hong Kong.

The result has been even greater concentration in semiconductor-related investments. These leveraged ETFs change hands frequently and have added to market volatility. It is fair to ask whether this truly creates better opportunities for ordinary investors.

The enthusiasm of Korean retail investors cannot be explained by semiconductor optimism alone. Since the launch of the Lee Jae Myung administration, policymakers have pursued measures aimed at drawing money out of real estate and into equities. Two revisions to the Commercial Act and tighter real estate lending regulations have played a role. In addition, the National Pension Service decided to postpone portfolio rebalancing and increase its domestic investment allocation, reinforcing expectations of continued support for the market.

The government also appears unwilling to reconsider taxation on stock trading gains. While labor income remains taxed, investment gains continue to enjoy favorable treatment. For an administration that presents itself as progressive, the contrast is difficult to ignore.

Against this backdrop, the Kospi is now approaching 9,000. Yet only a minority seem truly content. Whether they have made money or not, many retail investors remain anxious. Warning signs are accumulating: Samsung Electronics and SK hynix account for roughly half of total market capitalization, margin trading has reached a record 38 trillion won ($26.2 billion) and short-selling balances have climbed to 22 trillion won.

Recently, President Lee expressed displeasure with a news article citing a securities firm's report that argued the Kospi would stand at only 4,100 without semiconductor stocks. On his X account, Lee remarked that the figure should instead be viewed positively because the market would still be at 4,100 even without semiconductors.

Yet...

The task of our time is not merely to redistribute power. It is to build a distinctly Korean system of governance — transparent, legitimate and dynamic — with institutions capable of meeting the demands of a new era.

Cho Yoon-je

The author is a special appointment professor at the Graduate School of Economics at Yonsei University.

There is a saying that for every complex question, there is almost always a simple, neat and plausible answer that is wrong. The idea of Korea's "imperial presidency" often strikes me as one such answer.

Whenever constitutional reform is discussed, the same diagnosis appears: The concentration of presidential power is blamed for the failures of Korean politics, and power-sharing is presented as the solution. The history of Korea's presidents is indeed extraordinary. In one of the most successful postwar development stories in the world, it is difficult to find a president of the country who has not faced exile, assassination, imprisonment, impeachment, suicide or criminal investigation.

But is this simply the result of excessive presidential power? If Korean presidents truly possessed such authority, why were they unable to use it effectively and legitimately? Why did so many leave office under public criticism or legal punishment?

Novelist John Updike, a two-time Pulitzer Prize winner, once wrote in "The New Yorker" that the American presidency is merely a stop on the way to the blessed condition of becoming a former president. Even during U.S. President Donald Trump's first term, former President Barack Obama and his wife earned substantial income through speeches, books and consulting work while continuing to enjoy broad public respect. Former President Bill Clinton followed a similar path. Earlier American presidents also moved on to productive postpresidential lives. George Washington established a whiskey distillery, William Howard Taft became chief justice of the United States and Herbert Hoover pursued his passion for fishing.

During my years working in Britain and the United States, I observed that prime ministers and presidents there exercised authority comparable to, and sometimes greater than, that of Korean presidents.

The Republic of Korea was founded by rapidly adopting institutions that had evolved over centuries in Western democracies. This created a significant gap between formal institutions and social realities. Korea's first Constitution, modeled largely on that of the Weimar Republic, was drafted and adopted within little more than a month.

For thousands of years, the Korean Peninsula had never experienced a system based on the separation of powers. Nor had it undergone the intellectual movements that shaped modern democratic institutions in the West. As a result, a disconnect emerged between legal institutions and social behavior.

Korea's rapid economic rise was not achieved solely through strict adherence to formal rules. Much of its success came from bridging the gap between institutions and reality through informal practices. Viewed favorably, this was flexibility. Viewed critically, it often involved corruption or legal shortcuts.

This pattern extended beyond government. The history of Korea's economic development is also a history of arrests and presidential pardons involving business leaders. Family-controlled conglomerates dominate the economy, yet Korean commercial law contains no formal definition of a chaebol. As conglomerates expanded, practices such as accounting manipulation, preferential transactions among affiliates, cross-support and lobbying became common. In such a structure, controlling shareholders could easily become entangled in allegations of breach of trust, tax evasion or embezzlement.

The same reality affected ordinary citizens. Powerful investigative agencies emerged in a society where few individuals or companies could claim perfect compliance with every rule. Korean politics, society and the economy operated under that shadow for decades, and t...