Korean Errlines

The Korean Air - Asiana Airlines merger would face severe antitrust backlash anywhere, but Korea doesn't seem ready to welcome a foreign full-service carrier, and this is 2020. Yes, the new giant will lose many international routes, since Asiana competed with KAL on almost half of its overseas destinations, but it will also become a big player among Asia's low cost carriers after combining Jin Air, Air Seoul, and Air Busan (probably under the Asiana Airlines brand). Skyteam scores a major win against Star Alliance, and even slightly diluted as a KAL shareholder, Delta Airlines reinforces a key position in the region.

Needless to say, the pandemic spiced up this Korean drama where both Asiana suitors flew away: 

• the preferred consortium (Hyundai Development Company - Mirae Asset - Daewoo) looked for every possible loophole to take off between the engagement and the wedding, 
• Aekyung landed on a much smaller prey, beefing up its Jeju Air with Eastar Jet
• in the end, Kumho Asiana will have to lead their daughter to their main rival

The Hanjin KAL holding company will be able to advance the funds thanks to KDB, who will get a bit more than 10% of the merged carrier. So indirectly, the government foots the bill. In spite of the chaebol family scandals (from the nutrage to its many sequels), the Cho must go on...

Earlier this year, Korean Air fared much better than its global rivals, mainly thanks to freight traffic. And these days, the most popular domestic route in the World happens to be between Seoul and Jeju, the nation's preferred holiday destination benefiting from the lack of overseas alternatives. 

(source "These Are the World’s Busiest Airline Routes During Covid Times" - Bloomberg 20201117)

After inventing flights to nowhere (take off and landing in the same airport), Korea opened its skies to international fly-over travels. So there's always a quick fix if you miss international travels. Even for those who miss Jin Air's inflight meals (this is 2020, you are entitled to miss anything), there's a solution - low cost, of course:

'Travel withdrawal syndrome? Jin Air proposes inflight meals at home (today's KJD). For this plastic frenzy to make perfect sense, they should add a hundred gallons of kerozene to burn in your living room' (@theseoulvillage - 20201024)

But for cheap and easy escapes, nothing beats a travel book:

'Lonely Planet' indeed (they forgot 'Glamping on the balcony') (@theseoulvillage - 20201023)

Hep, taxi!

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China Dependence

If XI Jinping doesn't eat himself to death, he'll be leading China well into the next decade. And as he hosted the APEC meeting, he already tried to pose as a new breed of World leader, some kind of a super-blob absorbing every disturbance:
- Airpocalypse? Suspended for the occasion. It came back with a vengeance afterwards, and Seoul got a mean whiff of it for Suneung.
- Democracy? Distant umbrella clicking sounds muffled by thick red padded walls. Even the World's supposedly ultimate Democratic leader came bruised up (a red-painted America for Obama's last Midterm Elections).
- TPP? Sorry to hear about your China-free Trans-Pacific Partnership struggle. Here's our China-led Free Trade Area of the Asia Pacific (FTAAP). And Vladimir? I'm not forgetting our Shanghai Cooperation Organisation, we'll invite Modi and India soon. Meanwhile, here's another big contract for you...
- Shinzo Abe? The Imperial Japan revivalist thought their handshake would mark a diplomatic victory for him, Xi turned it into a public humiliation (a red face as visible as the dot on the flag for Abe, once again shaming the nation).

Meanwhile, South Korea and Park Geun-hye confirmed their honeymoon with China and Xi Jinping by concluding their FTA deal, a few days after the official launch of clearinghouse services by China’s Bank of Communications branch in Seoul (November 6).

I need a pull

We got a deal

Do you think Vlad the Impaler is coming our way?

Asia Pacific leaders beamed down to the size of blue cells.

If you remember the survey recently led by the Asan Institute on "South Korean Attitudes on China" (20140703) and "South Korean Attitudes on the Korea-US Alliance and Northeast Asia" (20140424), Koreans seem to consider their growing dependence on China as ineluctable, and they don't feel so comfortable about it.

But Koreans are not so comfortable with their economic situation and gloomy demographics either, and many are ready to make a quick buck, whatever the long term consequences. 

Jeju illustrates perfectly the double-edged sword of Korea's growing dependence on China. Local authorities opened Pandora's box in February 2010 by offering F-2 visas to anyone who invests at least KRW 500 m in real estate, and the Chinese jumped in. Mind you: not just as political risk management tools or evasion tactics. As of June 2014, they owned 5.92 million sqm of land worth KRW 580.7 bn, up from 20,000 sqm worth KRW 0.4 bn in 2009. Over the same period, US citizens gained only 4% more land, and Japanese citizens even lost 2% of their total.*

This year, Jeju will welcome over 5M visitors from China. But beyond the construction of hotels and resorts, China doesn't boost local jobs or consumption**. And at this pace, the island could become a Costa del Sol - style environmental + real estate mess. Local authorities are starting to realize the unsoundness of the equation, but Korea opens other regions to similar schemes, to the risk of creating bubbles, and of sucking much needed steam out of nearby projects that are already struggling.

Otherwise, for places like Songdo, bringing China in the equation helps fill existing towers. And speaking of Incheon: look how the city revived its Chinese heritage over the past decades, from one extreme (a community below the radar) to another (a brand new, colorful Chinatown).

In Seoul, Yeonnam-dong (the southern half of Yeonhui-dong until it joined Mapo-gu) enjoys a long history with China too, and it still shows in the architecture, even if you have to dig deeper and deeper to find one of these 'fusion hanok':

Yeonnam-dong hanok tended to have higher ceilings. Fusion architecture for people from Taiwan. (@theseoulvillage 20140815) - twitter.com/theseoulvillage/status/500156842874380288

Restaurant-wise, there are still a few great Chinese institutions in the neighborhood, but for how long? If flocks of Chinese tourists have recently started pouring in, that's to visit the new duty free shops operated by their compatriots in closed touristic circuits that obviously generate a lot of business, but not much for the local economy. Seoulites won't keep coming if they see Yeonnam-dong's charming streets packed with jay-parked tourist buses. Next thing you know, these closed circuits will include big buffets that will further degrade the neighborhood.

Don't get me wrong: of course China is a chance for Korea at all levels, I'm really happy to see two countries I love develop friendly and fruitful relations, and that's perfectly normal that a big chunk of China's touristic bonanza ends up in Chinese hands. 

I'm just worried about the pace and reach of change, and its impacts on Korea's economy, society, and politics.

Not because China's influence is bad in itself, but because massive and rapid changes could trigger anti-Chinese reactions which could not only damage the relations between both nations, but the multicultural fabric of Korea itself.

Likewise, when I mention political issues, that's not only at the national level (typically: okay for outsourcing part of  North Korea control, not okay to subscribe to the Northeast Project's 'Hanschluss' agenda): who and what will certain local authorities ultimately run for?

We're probably not at that stage yet, but I believe that Korean leaders should keep these risks in mind to work on a sustainable partnership. And that since this partnership cannot be balanced, to strengthen other partnerships in parallel.

*

See also:

• all posts related to China.
• my piece "Is Korea really the younger, smarter brother of China?" (The Korea Herald - 20111127)

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* "Chinese snap up real estate on Jeju" (Korea JoongAng Daily - 20141103), "Surge in Chinese investors in South Korea’s Jeju Island since 2009 may be to secure residency" (South China Morning Post - 20140903), "Chinese investment is taking over Jeju Island" (The Hankyoreh - 20141004)
** "Chinese Investment in Jeju Not Bringing Consumption, Employment to Region" (Business Korea - 20140829)

Once upon a time in the East

So Vladimir Putin eventually passed by Seoul yesterday. His truncated meeting with PARK Geun-hye culminated in a MOU where a South Korean consortium (Hyundai Merchant Marine, POSCO, Korail) shall take almost half of Russia's 70% stake in RasonKonTrans. 

POSCO and Hyundai eye the port activities, Korail the DPRK-Russia railway between Rason/Rajin and Khasan, just across Tumangang, where the Chinese enclave along the Tumen River stops, an entry point to the Russian network and Vladivostok. This move could boost the projects, but at the same time synchronize them with the Kaesong clock, as a mainly intra-Korean affair. So from a Chinese point of view, more threats and opportunities... But if Russia manages to maintain the line with both Koreas on this one, hats off!

What suprises me most here is the fact that Russia could sell its stakes in a JV with North Korea. Didn't they need their consent, or was the initial DPRK-Russia agreement signed under the influence of vodka-soju poktanju? Or was the abandon of 5.24 measures the prerequisite?

"What, me worry?" - XXth Century Autocrats

Note that Russia and the ROK also signed an agreement on visas, which won't be needed for short term visits between both nations. Excellent for tourism (and certainly a boost for the future Incheon Vegas - see "Paradise City v. Sin City"), and all forms of business (mob-wise, Russia has some catching up to do with China). Expect more menus in Russian and Chinese in the Korean Riviera - Jeju.

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Climate Change in Korea

After a two day break, monsoon is back. But the monsoon season is supposed to be over, and those record breaking downpours that are drowning Korea and killing dozens raise again the issue of climate change.

In this country, everything moves 빨리 빨리. Even the weather. Korea has already experienced dramatic changes over the past 100 years : average temperatures have gained 1.8 degrees celcius, winters are 2 to 3 weeks shorter and summers 2 to 3 weeks longer, Jeju-do has become a semi-tropical island, and extreme years have multiplied since 1991.

Over the past 20 years, I did experience extreme episodes firsthand, mostly typhoons or flash floods transforming streets into rapids*, or the staircases of a downtown subway station into mini-Niagara falls. But I never saw the Hangang completely frozen, except on pictures from the 50s. And I've had my share of fantastic years with mild winters and pleasant summers.

We already knew Korea was at some kind of frontier, and thus more likely to major changes : if Vladivostock is not far away, its harbor is often caught in ice during the winter, unlike those of the whole peninsula (even if the North, more mountainous, usually faces tougher winters than the South). That's one of the reasons why the federation invested in the Rajin-Sonbong Economic Special Zone in North Korea (Rason / Raseon logistic hub).

Ironically, as they pressed for more food relief, Pyeongyang propagandists forged just a few days ago a photo showing floods that didn't exist... Photoshop doesn't seem that necessary now. Images from the South are also hard to believe, but they are unfortunately true : the tragic landslides in Chuncheon or Umyeongsan**, cars crushed or drowned like toys...

Water's power of destruction showed no mercy for such wealthy areas as Daechi-dong (Gangnam-gu) or Bangbae-dong (Seocho-gu), but miraculously spared Seoul's fragile "moon villages" (generally close to mountain tops). Among the Umyeong-dong victims of the landslide, the wife of Shinsegae's chairman died in her own cellar. And another mudslide hit Ihwajang, the former home of President Syngman Rhee in Hyehwa-dong. Mobile networks went down at the heart of Gangnam, home to the new Samsung HQs and Teheran-ro start ups.

The powers that be have all been humbled and forced to reconsider their scenarii, up to the plans they had updated last year. Seoul and Korea will adapt once more, and one can hope today's tragedies will foster positive changes in urbanism and environment.

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* like last Chuseok (see "Chusoaked"), or my wet dog moment in 2008 (see "open air pool")
** Seoul Arts Center was hit, but Cezanne & co ("Musee d'Orsay in Seoul") are safe, but there too, many people died.

Seoul-Incheon canal

Since his reelection (see "OH Se-hoon V2.0"), the Mayor of Seoul has been constantly struggling with an opposition-dominated city council*.

The mother of all battles ? School meals : the DP voted to make them free for all elementary school students regardless of familial revenues, but OH wanted a fairer welfare system redistributing more to the poor. Note that in France, political parties opposing free meals for all are generally left leaning, but Korea is obviously a different story. Anyway, to undo the change, the Mayor collected 800,000 signatures from Seoul citizens, well over the 400,000 or so needed. Still, he's now ready to jeopardize his political future in a referendum on the issue.

But officially, OH Se-hoon is less interested in the road to Cheong Wa Dae than in the Seoul-Incheon canal, a new battlefield for which he is even willing to end his boycott of city council meetings.

Officially called Gyeongin Canal, the project connects Incheon with Gimpo, but OH wants boats to continue all the way to Yeouido, where he plans to build a port (bridges also have to be renovated in the process). In his words : the government already set the table, Seoul just has to put its own dishes to enjoy the meal.

What's on the menu ? Among other delicacies, cruise ships loaded with Chinese tourists. Increasingly hopping from hub to hub across the whole region (Incheon, Busan, Fukuoka...), they don't pay hotel rooms, but can be taxed for each night... Freight also represents a big business, and road traffic between the Port of Incheon and the Capital could be considerably reduced.

Incheon (then Jemulpo) was chosen for good reasons : it's the perfect landing spot, and not just for McArthur. If you take a map, the Han river reaches the Yellow Sea near Ganghwa island following a trickier path and furthermore, it is now the frontier with North Korea (these days, you never know who's shooting whom in this area).

You've probably already seen the Gyeongin Canal on the way from or to Incheon Airport : that's the huge construction site parallel to the highway (North). The project was stalled for years but has been revived about two years ago, when the Four Great Rivers project gained momentum. And like with the whole Sa Dae Gang project, the environmental debate is far from over.

But even if this project happens to fold, you can always ride a boat for just KRW 4,000 per hour in the recently inaugurated Seoul Marina. Or join Mangwon Hangang Park by ferry with your bike for just KRW 1,000.

Hey, Hangang Renaissance is not just hype after all.

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* not always for the worse - I'm glad some of his pet projects were axed : see "The fastuous and the furious : trimming down Seoul city's most embarrassing projects"

Chuseok dreams : tunnels between Korea, China, and Japan

I remember, before the construction of the Channel Tunnel between France and England, how images of earlier projects would resurface, including those from Napoleon era (early 1800s), where horse coaches would travel on paved road under the sea, tall brick chimneys reaching for the surface every mile or so to help people and animals breathe... The 50.45 km long "Chunnel" is now a reality, changing forever the face of European transports, London becoming almost a suburb of Paris*.

On this Chuseok day, the Chosun Ilbo mentions* 3 undersea railway projects under investigation between Korea and its neighbors. It's not the first time we hear about them, but things seem to be getting more serious.

The shortest project is 3 times longer than the Chunnel : it would connect Jeju-do with the mainland at Mokpo, putting Jeju only 2:26 hours away from Seoul by KTX. Sounds great but a bit disproportionate : I like Jeju very much, but the island only boasts half a million inhabitants. Even boosting the traffic (already millions of tourists every year) wouldn't make the concept viable.

Linking Korea with Japan makes much more sense, Busan-Fukuoka remaining the most likely axis (1 hour and 222.6 km according to the plan). But the connection should then continue across the archipelago far beyond Kyushu, and I wonder if it could be seismically sustainable.

What to say of the third project, a 341 km / 95 mn link between Incheon and Weihai (Shandong), with an artificial island in the middle ? A very ambitious project, but the shortest way if you put North Korea out of the equation, which is precisely the aim of the game : China would easily control major entry points to the peninsula for people and freight, and make reunification less a necessity.
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* those darn Brits would turn the sentence around - after all, they dared chose Waterloo, the symbol of Napoleon's fall, as their main station for the Eurostar bullet train ! Mercifully, the new St Pancras Station is less an embarrassment for French visitors.

** see "개통땐 서울~제주 KTX로 2시간 26분… 국토해양부 "타당성 조사중"

congdu (Seoul)

This restaurant used to be in Samcheong-dong but moved to Shinmunro, the market for upscale modern Korean food ("neo Korean cuisine" in congdu's own words) being probably bigger with all those big company headquarters around.

"congdu" means bean, so I was not surprised to get a refreshing cup of makgeolli with black bean and red ginseng, followed by an equally cool white bean gazpacho delicately enhanced with white ginseng. The summer program consists of 3 colorful* set menus with a Jeju flavor : many ingredients come from the Southern island, like those black pig feet cooked for 36 hours and served with (what else) beans, and the terrace room (view on the back of the museum, a quiet garden rearranged last year) hosts a temporary photo exhibition about a Jeju-do less sunny than usual but all the more beautiful.

By the way, you're in a museum, and one I'm visiting quite often, and not only because I live almost next door. So why not enjoy the collections before or after a nice tofu steak ? But call them first : the other day, I tried to combine a dinner at congdu with the "1950 Seoul - 6.25 60th Anniversary Special Exhibition" and its sidekick ("A portrait of London", a photo exhibition co-organized with the Museum of London), but the central information desk was not aware that the whole restaurant had been reserved for the evening.

Don't expect this kind of mistake from congdu's staff : the service is really fine and adds to the very pleasant experience.

congdu f&c / congdu food & cuisine (restaurant)
Seoul Museum of History 1F, 50 Saemunan-gil, 2-1 Shinmunro-2-ga, Jongno-gu, Seoul, ROK 110-230
Tel +82.2.722.7002

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* the dishes as well as the menus (green, orange, and white)

Tour de Korea

Last stage* for the 2010 "Tour de Corée" : tomorrow in Seoul, starting with a 5.1 km parade between Olympic Park and Mongchontoseong Station (between 9:50 and 9:59 AM).

A 49.2 km race will follow, with a finish planned at 11:04 at Sejongno Sageori, where the barnum shall pass 8 mn earlier for a loop around Gyeongbokgung and Jongmyo via Cheonghwadae, Samcheong-dong, and Jongro. Don't even think about driving your car in the area : come by subway and enjoy the show.

For the 10th edition, this finish on Sejongno mirrors Tour de France finishes on the Champs Elysees (even if in Paris, there's much more than one loop). Last year's winner came from Switzerland (Roger Beuchat).
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* 10 stages overall :
- Jeju (177 km + 1 km parade)
- Gangjin-Yeosu (138.6 km + 4)
- Yeosu-Gunsan (219 km + 6)
- Gunsan-Dangjin (149.7 km + 1.4)
- Dangjin-Cheongju (162.2 km + 9.7)
- Cheongju-Gumi (198 km + 7.5)
- Gumi-Yeongju (144 km + 9.9)
- Yeongju-Yangyang (225.2 km + 9.5)
- Yangyang-Chuncheon (145.5 km + 9)
- Seoul (49.2 km + 5.1)

7 zones

LEE Myung-bak's government is facing big hurdles these days but at least something seems relevant : grouping provinces and big cities around 7 economic zones, and accelerating bullet train projects at the national level. I hope this won't alter the "cluster" approach but boost each region.

The 5 major zones will be :

- Central metro : Seoul + Incheon + Gyeonggi-do - major : finance & hi tech
- South East : Busan + Ulsan + Gyeongsangnam-do - major : heavy industries
- Daegu / Gyeongbuk : Daegu + Gyeongsangbuk-do - major : electronics, textile, energy
- Chungcheong : Daejeon + Chungcheongnam-do + Chungcheongbuk-do - major : science, R&D, education
- Gwangju / Jeolla : Gwangju + Jeollabuk-do + Jeollanam-do - major : tourism

Two provinces remain on their own :

- North East : Gangwon-do - major : tourism and medical
- Jeju : Jeju-do - major : tourism

Not a dramatic change for Jeju but some hope for Gangwon, now a segment of one potentially more advertized overseas. Splitting Gyeongsang is an even smarter move. Jeolla remains untouched and focused on tourism, but a "Sun Belt" Economic Zone is also planned from Mokpo to Busan along the South Coast in order to rival Seoul and accelerate the demographic and economic development of Mokpo area. Top chaebols will be invited to open vice-national HQs in the new zone. Preferably not in the Busan area, already a major hub by itself.

If new administrative levels could limit the intranational competition between self proclaimed Asian hubs, they are not necessarily good news - poorly handled they would even destroy value everywhere. I also suspect some potential cannibalization / coopetition with Korea's existing cluster strategy.