‘American capital’ is a 'constant' in South Korea, not a 'variable'. Which would be a greater threat to South Korea: the withdrawal of American capital or the withdrawal of American troops? This article is not intended to promote servility but to find 'future industrial opportunities' for South Korea from a geopolitical perspective by contemplating the flow of international capital as a patent attorney.
Part 1. The Relationship between the United States and Japan, and the Growth of South Korea
1. The Sweet and Savage Relationship between the United States and Japan
The United States was attacked by Japan twice: once during the Pearl Harbor bombing and again during Japan's economic boom in the 1980s. Japan seized opportunities for national growth twice with American support but eventually defied American expectations both times. The Meiji Restoration (1868) was Japan's modernization reform, occurring belatedly after the Opium Wars (1840, 1856). This was only 42 years before the Japan-Korea Annexation Treaty in 1910. Despite the innovations of the Meiji Restoration, it was too short a time for Japan to defeat China in the First Sino-Japanese War (1894) and Russia in the Russo-Japanese War (1904) without significant external financial support.
Could Japan have achieved rapid advancements in science, technology, and weaponry and proceeded with its colonial expansions in East Asia without the approval of 'American capital'? Instead of the costly 'direct colonial operation' like the British Empire, might 'American capital' have invested in Japan to create a larger market, managing other countries' markets through corporations rather than direct control? By building railways in the Korean Peninsula, buying resources cheaply, and selling new goods to the increasing population, costs could be reduced compared to direct colonial operations. It is well-known that the United States prefers 'controllable markets' to expand its economic influence and protect the power of the dollar. However, Japan, which had grown rapidly for nearly 70 years from the Meiji Restoration (1868) until 1940, bombed Pearl Harbor, an attack that America did not anticipate at all.
2. Japan's Remarkable Growth and American Control
The second betrayal was Japan's economic growth. The term 'bubble economy' used by the Korean media belittles Japan's economic growth. It was not a 'bubble.' Japan, the first country to suffer an atomic bomb, became America's forward base and experienced significant growth for nearly 30 years, taking advantage of the Korean War. In the 1950s, 'American capital' once again chose the 'Japan growth' project, experienced once in the 1870s. The bomb created by Oppenheimer's team was terrifying, and the philosophical movement that changed the world in the early 20th century, 'communism,' was forming an enormous force centered on the Soviet Union. Japan seized the perfect opportunity to be selected by 'American capital' again due to the intertwined geopolitical, philosophical, capitalistic, and technological factors on the Korean Peninsula.
The economic boom in Japan is detailed in the series "Shima Kosaku."
In the 1930s, bamboo from Damyang during the colonial period was exploited to make filaments for light bulbs by American Edison, and ships manufactured in Busan's Yeongdo 'Kangkangee Village' were used as Japanese merchant and military ships. Even after liberation in the 1950s, Japan was a base camp for 'American capital' to make South Korea an anti-communist state. South Korea, with its explosive population growth, presented potential as a 'decent market' with cheap labor (similar to Vietnam today). In the 1960s, Korean companies played subcontractor roles for Japanese companies, and the final export destination of the products was ultimately the United States. The 'age of consumption' enjoyed by America at the time is still famous. The power of the dollar, a currency beloved worldwide, remains strong today. You, reading this, likely prefer the dollar too. Even North Korea, known for its dislike of America, likes the dollar.
In the late 1970s, as Japan grew in almost all fields such as electronics, semiconductors, computers, automobiles, and shipbuilding, America's manufacturing supply chain began to collapse. As recently mentioned on Shuka World, America today struggles to properly build merchant ships. Manufacturing, laden with environmental pollution, labor costs, and union issues, led America to turn to the burgeoning software and pharmaceutical industries. Japan managed the Asian supply chain well, supplying sexy, compact consumer goods like the 'Walkman' to America. West Germany played a similar role. The companies we call 'war criminal enterprises' were valuable for their production experience, providing cheap and good-quality cars and electronics to America. However, the dollar's flow concentrating on one side caused issues.
To solve the 'silver concentration' problem, America couldn’t start another 'Opium War' like Britain. Since the dollar is paper, it could be resolved cleverly. On September 22, 1985, at the Plaza Hotel in New York, finance ministers and central bank governors from the United States, Japan, West Germany, France, and the United Kingdom gathered, leading to a nearly 50% drop in the dollar's value against the yen. Japan’s exports dwindled, plunging it into a 30-year-long recession. It was an internationally agreed measure, and there was no alternative.
For more details, refer to the article at Weekly Chosun. https://weekly.chosun.com/news/articleView.html?idxno=8962
3. The Beginning of the Chip War – Why Did We Become Prosperous?
Following the Plaza Accord in 1985, the Semiconductor Agreement between the United States and Japan in 1986 severely impacted Japan. It was ultimately America's strategy to position 'non-memory' semiconductors in Taiwan and 'memory' semiconductors in South Korea. Equipment companies like Tokyo Electron (TEL), Tokyo Canon, and Nikon, as well as chemical companies like Sumitomo, survived, but major semiconductor product companies like NEC, Toshiba, and Hitachi, which were the world’s top three in 1990, were completely pushed out of the rankings by 2020. The semiconductor agreement between the United States and Japan in 1986 resulted in South Korea's Samsung Electronics and Hyundai Electronics becoming memory giants. Semiconductor equipment companies like Jusung Engineering, Hanmi Semiconductor, SEMES, and Wonik IPS became the jewels of the Korean stock market, enabling the upward trajectory of the Korean economy. South Korea's per capita income, which was $3,467 in 1987, grew fourfold to $13,077 by 1996. In 2017, we surpassed $30,000 in per capita income, allowing us to carry 'Hermes' bags. Imagine the unease in the Japanese government after the successful hosting of the 1988 Olympics.
Japanese companies faded, leaving two Korean memory chip companies and one Taiwanese non-memory company. American fabless companies, which design chips, dominate the market.
Samsung Electronics and Hynix have been the pillars of the IT industry since the 1990s. The technology accumulated in semiconductors influenced IT industries like display, electronics, medical devices, and secondary batteries. IT venture companies emerged and entrepreneurship thrived in the late 1990s. Semiconductors accounted for about 25% of Korea's exports, creating numerous jobs. However, there are signs of an impending end, a significant concern. The Yoon Seok-yeol administration announced the 'K-Semiconductor Strategy,' but there are whispers overseas that the lifespan of South Korea's semiconductor and IT industries is limited.
A senior in Taiwan mentioned that South Korea might become an 'island of Galapagos.' With a declining population and high average wages, South Korea may no longer be attractive to 'American capital' as a market or source of labor. Money has a 'tendency to move.' It doesn't go to places with low returns. The dollar has evolved far from its gold-exchange era, and the Federal Reserve contemplates various ways to maintain its value. If you were 'American capital,' why would you come to South Korea? What choices should be made to sustain long-term national growth? This will be discussed in Part 3.
BLT columns are written by BLT partner patent attorneys and published weekly through newsletters.
Subscribe to the newsletter.
For more details, please contact BLT Patent & Law Firm.
Phone: 02-514-0104
Email: info@BLT.kr
Website: www.BLT.kr
Author Introduction
Eom Jeong-han, a patent attorney, graduated from the Department of Chemical and Biological Engineering at Seoul National University and passed the patent attorney exam in 2006 (43rd exam).
He co-founded 'BLT Patent & Law Firm' with patent attorney Yoo Cheol-hyun in 2013, discovering and investing directly in startups, and operating the accelerator 'Company B' and 'Company B Private Investment Association.'
He conducts lectures on corporate diagnostics, patent strategies, brand strategies, investment attraction strategies, and startup marketing, and participates in angel investments and startups (planning, marketing, strategy, IP).
Phone: 02-514-0104
Email: shawn@BLT.kr
Website: www.UHM.kr
BLT Patent & Law Firm: When someone creates a patent, BLT ensures the success of your business. The Only Firm for Your Success!
‘American capital’ is a 'constant' in South Korea, not a 'variable'. Which would be a greater threat to South Korea: the withdrawal of American capital or the withdrawal of American troops? This article is not intended to promote servility but to find 'future industrial opportunities' for South Korea from a geopolitical perspective by contemplating the flow of international capital as a patent attorney.
Part 1. The Relationship between the United States and Japan, and the Growth of South Korea
1. The Sweet and Savage Relationship between the United States and Japan
The United States was attacked by Japan twice: once during the Pearl Harbor bombing and again during Japan's economic boom in the 1980s. Japan seized opportunities for national growth twice with American support but eventually defied American expectations both times. The Meiji Restoration (1868) was Japan's modernization reform, occurring belatedly after the Opium Wars (1840, 1856). This was only 42 years before the Japan-Korea Annexation Treaty in 1910. Despite the innovations of the Meiji Restoration, it was too short a time for Japan to defeat China in the First Sino-Japanese War (1894) and Russia in the Russo-Japanese War (1904) without significant external financial support.
Could Japan have achieved rapid advancements in science, technology, and weaponry and proceeded with its colonial expansions in East Asia without the approval of 'American capital'? Instead of the costly 'direct colonial operation' like the British Empire, might 'American capital' have invested in Japan to create a larger market, managing other countries' markets through corporations rather than direct control? By building railways in the Korean Peninsula, buying resources cheaply, and selling new goods to the increasing population, costs could be reduced compared to direct colonial operations. It is well-known that the United States prefers 'controllable markets' to expand its economic influence and protect the power of the dollar. However, Japan, which had grown rapidly for nearly 70 years from the Meiji Restoration (1868) until 1940, bombed Pearl Harbor, an attack that America did not anticipate at all.
2. Japan's Remarkable Growth and American Control
The second betrayal was Japan's economic growth. The term 'bubble economy' used by the Korean media belittles Japan's economic growth. It was not a 'bubble.' Japan, the first country to suffer an atomic bomb, became America's forward base and experienced significant growth for nearly 30 years, taking advantage of the Korean War. In the 1950s, 'American capital' once again chose the 'Japan growth' project, experienced once in the 1870s. The bomb created by Oppenheimer's team was terrifying, and the philosophical movement that changed the world in the early 20th century, 'communism,' was forming an enormous force centered on the Soviet Union. Japan seized the perfect opportunity to be selected by 'American capital' again due to the intertwined geopolitical, philosophical, capitalistic, and technological factors on the Korean Peninsula.
The economic boom in Japan is detailed in the series "Shima Kosaku."
In the 1930s, bamboo from Damyang during the colonial period was exploited to make filaments for light bulbs by American Edison, and ships manufactured in Busan's Yeongdo 'Kangkangee Village' were used as Japanese merchant and military ships. Even after liberation in the 1950s, Japan was a base camp for 'American capital' to make South Korea an anti-communist state. South Korea, with its explosive population growth, presented potential as a 'decent market' with cheap labor (similar to Vietnam today). In the 1960s, Korean companies played subcontractor roles for Japanese companies, and the final export destination of the products was ultimately the United States. The 'age of consumption' enjoyed by America at the time is still famous. The power of the dollar, a currency beloved worldwide, remains strong today. You, reading this, likely prefer the dollar too. Even North Korea, known for its dislike of America, likes the dollar.
In the late 1970s, as Japan grew in almost all fields such as electronics, semiconductors, computers, automobiles, and shipbuilding, America's manufacturing supply chain began to collapse. As recently mentioned on Shuka World, America today struggles to properly build merchant ships. Manufacturing, laden with environmental pollution, labor costs, and union issues, led America to turn to the burgeoning software and pharmaceutical industries. Japan managed the Asian supply chain well, supplying sexy, compact consumer goods like the 'Walkman' to America. West Germany played a similar role. The companies we call 'war criminal enterprises' were valuable for their production experience, providing cheap and good-quality cars and electronics to America. However, the dollar's flow concentrating on one side caused issues.
To solve the 'silver concentration' problem, America couldn’t start another 'Opium War' like Britain. Since the dollar is paper, it could be resolved cleverly. On September 22, 1985, at the Plaza Hotel in New York, finance ministers and central bank governors from the United States, Japan, West Germany, France, and the United Kingdom gathered, leading to a nearly 50% drop in the dollar's value against the yen. Japan’s exports dwindled, plunging it into a 30-year-long recession. It was an internationally agreed measure, and there was no alternative.
3. The Beginning of the Chip War – Why Did We Become Prosperous?
Following the Plaza Accord in 1985, the Semiconductor Agreement between the United States and Japan in 1986 severely impacted Japan. It was ultimately America's strategy to position 'non-memory' semiconductors in Taiwan and 'memory' semiconductors in South Korea. Equipment companies like Tokyo Electron (TEL), Tokyo Canon, and Nikon, as well as chemical companies like Sumitomo, survived, but major semiconductor product companies like NEC, Toshiba, and Hitachi, which were the world’s top three in 1990, were completely pushed out of the rankings by 2020. The semiconductor agreement between the United States and Japan in 1986 resulted in South Korea's Samsung Electronics and Hyundai Electronics becoming memory giants. Semiconductor equipment companies like Jusung Engineering, Hanmi Semiconductor, SEMES, and Wonik IPS became the jewels of the Korean stock market, enabling the upward trajectory of the Korean economy. South Korea's per capita income, which was $3,467 in 1987, grew fourfold to $13,077 by 1996. In 2017, we surpassed $30,000 in per capita income, allowing us to carry 'Hermes' bags. Imagine the unease in the Japanese government after the successful hosting of the 1988 Olympics.
Japanese companies faded, leaving two Korean memory chip companies and one Taiwanese non-memory company. American fabless companies, which design chips, dominate the market.
Samsung Electronics and Hynix have been the pillars of the IT industry since the 1990s. The technology accumulated in semiconductors influenced IT industries like display, electronics, medical devices, and secondary batteries. IT venture companies emerged and entrepreneurship thrived in the late 1990s. Semiconductors accounted for about 25% of Korea's exports, creating numerous jobs. However, there are signs of an impending end, a significant concern. The Yoon Seok-yeol administration announced the 'K-Semiconductor Strategy,' but there are whispers overseas that the lifespan of South Korea's semiconductor and IT industries is limited.
A senior in Taiwan mentioned that South Korea might become an 'island of Galapagos.' With a declining population and high average wages, South Korea may no longer be attractive to 'American capital' as a market or source of labor. Money has a 'tendency to move.' It doesn't go to places with low returns. The dollar has evolved far from its gold-exchange era, and the Federal Reserve contemplates various ways to maintain its value. If you were 'American capital,' why would you come to South Korea? What choices should be made to sustain long-term national growth? This will be discussed in Part 3.
BLT columns are written by BLT partner patent attorneys and published weekly through newsletters.
Subscribe to the newsletter.
For more details, please contact BLT Patent & Law Firm.
Phone: 02-514-0104
Email: info@BLT.kr
Website: www.BLT.kr
Author Introduction
Eom Jeong-han, a patent attorney, graduated from the Department of Chemical and Biological Engineering at Seoul National University and passed the patent attorney exam in 2006 (43rd exam).
He co-founded 'BLT Patent & Law Firm' with patent attorney Yoo Cheol-hyun in 2013, discovering and investing directly in startups, and operating the accelerator 'Company B' and 'Company B Private Investment Association.'
He conducts lectures on corporate diagnostics, patent strategies, brand strategies, investment attraction strategies, and startup marketing, and participates in angel investments and startups (planning, marketing, strategy, IP).
Phone: 02-514-0104
Email: shawn@BLT.kr
Website: www.UHM.kr
BLT Patent & Law Firm: When someone creates a patent, BLT ensures the success of your business. The Only Firm for Your Success!