Author: Qinghe, President of Chibensha

South Korea became independent from Syngman Rhee and developed from Park Chung-hee.

In 1961, Park Chung-hee, who was a soldier, launched a coup and overthrew the regime established by Syngman Rhee. Under the pressure of US President Kennedy, Park Chung-hee ended military rule and became the third president of South Korea. He was subsequently re-elected for five terms and ruled the Blue House for 18 years.

The South Korea that Park Chung-hee took over was much poorer and weaker than North Korea at that time. Fortunately, Park Chung-hee was not a martial artist. He was good at assessing the situation, worked hard to rejuvenate the country, and created the "Miracle on the Han River."

Park Chung-hee absorbed the aid dividends from the United States under the overall situation of the United States and the Soviet Union competing for hegemony, and at the same time, he had both sides in the Japan-U.S. trade war.

In 1965, with the help of the United States, Japan and South Korea finally normalized their diplomacy after seven rounds of negotiations. Japan and South Korea signed the "Japan-South Korea Claims Agreement." According to this agreement, Japan provided $500 million in economic assistance to South Korea.

After Nixon came to power, the United States showed its weakness in the Vietnam War. On July 5, 1969, Nixon, who was good at diplomacy, proposed a new US policy in East Asia in Guam, which was called the "Nixon Doctrine" (Guam Doctrine). Nixon hoped to ease the situation in East Asia, form a "partnership" with Japan, bring South Korea with him, win over the Soviet Union, and jointly check and balance the Soviet Union.

In this way, South Korea and Vietnam are now in an extremely favorable international situation.

This article uses the chaebol economy as an entry point to analyze South Korea’s modernization path and consider the East Asian paradigm behind it.

Logic of this article:

1. The Miracle on the Han River and the Chaebol Economy

2. The Collapse of the Military and the Historical Transition

3. The Democratic President and the Chaebol

01 Miracle on the Han River and Chaebol Economy

On January 12, 1973, Park Chung-hee issued the "Declaration of Heavy Industrialization" at the New Year's press conference, claiming that South Korea's per capita Earnings will reach $1,000.

On the 31st of the same month, Park Chung-hee listened to a report by Wu Yuanzhe, the second chief secretary of the economy. The report pointed out that it is necessary to transform the industrial structure and expand the industrial base; develop the chemical industry, shipbuilding, machinery industry, including sensitive atomic energy and other defense industries; introduce new technologies, build large-scale factories, and catch up with North Korea.

The meeting lasted for four hours, and Park Chung-hee gave the final instruction: "We must introduce necessary foreign capital!"

This was a meeting that changed the destiny of South Korea.

Park Chung-hee inherited Zhang Mian’s strategy of depreciating the Korean won, restricting foreign investment, and establishing a science and technology research institute to improve the competitiveness of export manufacturing.

Park Chung-hee’s secretary-general Kim Jung-ryun and head of the heavy and chemical industry planning team Oh Won-cheol proposed to select one or two private companies in each field to provide full support in terms of site selection, roads, funds, etc. Park Chung-hee holds regular export meetings with entrepreneurs every month to clear obstacles for export manufacturing.

This was the beginning of South Korea’s chaebol economy.

The biggest feature of today’s South Korean economy, the chaebol economy, originated during the Japanese occupation and emerged during the Park Chung-hee era.

On July 3, 1973, the Pohang Steel Plant in South Korea was completed and put into operation. When the first molten iron flowed out, its general manager Park Tae-jun shouted long live and burst into tears.

In 1978, Pohang Steel's output reached 5.5 million tons, which increased to 8.5 million tons in 1981. This benchmark enterprise supported by South Korea has now become one of the largest steel groups in the world. The output of its subsidiary Gwangyang Steel Plant and Pohang Steel Plant ranks first and second in the world respectively.

This steel plant founded in 1968 is the beginning of South Korea's heavy chemical industry, a symbol of South Korea's industrial economy, and one of the top ten chaebols in South Korea.

At that time, Park Chung-hee got off to a bad start. He had just started industrialization when he encountered the first oil crisis, and the export industry was in danger.

In October 1974, Samsung and Daewoo proposed establishing a comprehensive trading company based on Japan and submitted a Korean comprehensive trading company cultivation plan to the Korean Ministry of Commerce and Industry. Park Chung-hee's approval of comprehensive trading companies is equivalent to establishing the chaebol system and directly pushing the Korean economy into a chaebol economy.

Park Chung-hee hopes to form a large group to resist the crisis and rise rapidly. South Korea provides preferential export loans to general trading companies to support their acquisition of small and medium-sized enterprises. Samsung C&T was registered as the No. 1 general trading company, followed by Daewoo, Ssangyong, Samwha, Kumho Industrial, Hyundai, etc., one by one, and quickly developed into a cross-border chaebol.

At that time, the loans obtained by financial institutions such as Hyundai, Samsung, LG, SK and other large chaebols once exceeded 70% of South Korea's total credit. From 1970 to 1975, the growth rates of Hyundai, Daewoo and Ssangyong reached 33%, 35% and 34% respectively. 【1】

A typical case is Hyundai Group. At that time, Hyundai Group's president Chung Ju-yong tried to abandon the shipbuilding plan considering the severe situation of the oil crisis.

But Park Chung-hee pushed hard and said to Zheng Juyong: "How can this be done? Is the person sitting in front of me the same person who built the Gyeongbu Expressway?"

At that time, Hyundai Group's core business was infrastructure facilities, building the Gyeongbu Expressway, the Patani Narasiwa Expressway in Thailand, and a port in Vietnam. Park Chung-hee asked Hyundai Group to disburse a loan to support its shipbuilding business.

In 1975, the modern shipyard was completed, but the international shipping market was in a downturn. Therefore, Park Chung-hee ordered Congress to enact a law to provide special preferences to companies that use Korean cruise ships to transport oil to South Korea. Hyundai Group took this opportunity to further expand its international shipping business and gradually became a large group integrating shipbuilding and shipping. Today, South Korea has become a global shipbuilding power.

Hyundai Group has another ambitious plan: building cars.

In 1967, Hyundai Motor cooperated with the Ford Motor Company of the United States and introduced Ford technology to produce "Gotila" brand cars. In 1974, Hyundai Motor firstThe first mass-produced independent model "Pony" was launched and exported to foreign countries for the first time. The core technology of the first modern automobile and the first assembly line was provided by the American Ford Motor Company.

"Pony" is the second independently developed model in Asia after Japan. Its advent marked South Korea's entry into the automobile industry.

Benefiting from the U.S.-Japan trade war, Hyundai Motor first cooperated with Toyota and then formed an alliance with Mitsubishi Motors to produce Pony cars and export them to the United States. In the first year (1986) when Hyundai Motor entered the U.S. market, it achieved a sales miracle of 160,000 units, establishing Hyundai Motor's international status in one fell swoop. Today, Hyundai Motor is South Korea's largest car brand, one of the world's top 20 automakers, and one of South Korea's top ten chaebols.

However, what really brings prosperity to South Korea should be the electronics industry.

In the 1970s, Japan's color TV sets completely caught up with the United States. At its peak, exports to the United States accounted for 90% of color TV exports and captured 30% of the U.S. market share. In the 1980s, Japan's semiconductor and electronics industry had a huge impact on the United States.

The United States launched trade wars against Japan’s color TVs, semiconductors and electronics industries respectively, restricting the export quantity of Japanese color TVs, launching a Section 301 investigation into Japanese chips and related products exported to the United States, levying anti-dumping duties, and setting a Indicator of daily share.

In 1987, the Japanese company Toshiba sold prohibited machine tool products to the Soviet Union. The United States imposed sanctions on Toshiba and banned the export of its products to the United States for three years.

In this way, Japan's home appliances, semiconductor and electronics industries gradually declined until they declined; while South Korea's electronics industry rose rapidly and became the leading industry.

Amidst the trade friction between the United States and Japan, South Korea used the chaebol model to seize this historic opportunity for industrial transfer and trade substitution.

South Korea’s four major chaebols, Samsung, LG, Hyundai and Daewoo, first actively absorbed and imitated Japanese and American technology, and then strengthened their investment in equipment and talents, thereby establishing a competitive advantage in technology.

With the help of the United States, the Korea Institute of Science and Technology (KIST) was established in May 1965. South Korea has promoted advanced direct investment in Europe and the United States through the establishment of joint ventures. Komi, Fairchild Semiconductor, Signetics, and Motorola have successively invested in South Korea, and South Korea's semiconductor packaging and testing equipment business has risen rapidly.

In August 1967, Columbia University electronics professor Kim Wan-Hee visited South Korea and suggested that South Korea pay attention to the development of the electronics industry and called on Korean companies to join the global electronics industry development strategy.

This is a transcendent suggestion.

South Korea quickly positioned electronic products as one of the six strategic export industries; and passed the "Electronics Industry Promotion Act" in January 1969, providing a series of real money subsidies and export incentives.

At this time, Samsung founder Lee Byung-cheol capturedThis opportunity changed the destiny of South Korea. Samsung Electronics was established and it immediately announced its entry into the electronics industry. LG's predecessor, GoldStar, was a pioneer in South Korea's electronics industry, and Samsung was the master.

When Samsung only had 137 employees, Lee Byung-cheol sent many people to Japan to learn television and vacuum tube production technology. In the second year after the founding of Samsung, with the help of Japanese partners, Samsung Electronics designed and produced the first vacuum tube and the first 12-inch black and white television.

What really allowed Samsung to establish its dominant advantage in the semiconductor field was Hankook Semiconductor. Just when Samsung Electronics was established, Dr. Kang, a former Korean engineer from Motorola (one of the largest discrete transistor companies in the world at the time), his classmate Harry Cho, and Professor Kim, a famous radio network operation guru, established a The company is called Integrated Circuit International, or ICII.

The chips designed by ICII are extremely successful, and even supply exceeds demand. In order to solve the problem of insufficient production capacity, the three decided to transfer chip manufacturing to South Korea and established a new company called Hankook Semiconductor.

However, when preparations were underway to build Hankook Semiconductor's wafer fab, the world oil crisis broke out, and Hankook Semiconductor was short of funds.

At this time, Lee Byung-cheol and his son Lee Kun-hee observed the company's technical strength, bypassed the hesitant Samsung leadership, rushed to support Hankook Semiconductor in the name of the family, and completely took over Hankook Semiconductor in 1977. Thailand and changed its name to Samsung Semiconductor. A few years later, Samsung Electronics integrated Samsung Semiconductor.

In 1979, South Korea tried to build a huge chaebol system around the VLSI fab that produced 16K DRAM, including Samsung, Daewoo, GoldStar and Hyundai.

In order to obtain advanced technical support, Samsung set up a branch in California, USA, to specifically seek licenses for DRAM technology. However, Motorola, Hitachi, Toshiba, and Texas Instruments all rejected Samsung. Fortunately, Micron Technology opened the door to Samsung and agreed to license its 64K DRAM design to Samsung.

This is a key step for Samsung to become the world's largest chip manufacturer.

Today, Samsung has surpassed Intel to become the world's largest semiconductor company. South Korea has 22% of the global semiconductor market share, second only to the United States as a major semiconductor manufacturing country.

During the Park Chung-hee era, South Korea’s economic boom was deeply tied to chaebols. In 1979, South Korea's GDP jumped from 101st to 49th in the world in 1962; GDP per capita jumped from 108 US dollars in 1965 (10 US dollars more) to 1,783 US dollars (10 times closer); TVs, refrigerators, washing machines It is extremely common in urban families in Korea.

In 1980, the revenue of the top ten chaebols in South Korea accounted for 48.1% of GDP. The chaebols were deeply rooted and luxuriant, and they were as rich as the country.

In 1979, when South Korea’s economy was booming, Park Chung-hee was attacked by his confidants and ChineseKim Jae-kyu, the head of the Central Intelligence Agency, was shot to death.

After the death of Park Chung-hee, South Korean military security commander and Army Lieutenant General Chun Doo-hwan launched a coup to seize power. Chun Doo-hwan and Roh Tae-woo took charge of South Korea successively. Both of these men were once Park Chung-hee's bodyguards. After taking power, they still followed Park Chung-hee's economic ideas.

02 The fall of the military and the political transition and the historical leap

During the era of the security guard, South Korea’s economy and chaebols continued to advance rapidly, creating the “Miracle on the Han River” that shocked the world. South Korea's per capita GDP increased from US$1,715 in 1980 to US$5,817 in 1989, and residents' disposable income in 1992 was nine times that of 1963.

How to evaluate the Miracle of Han River?

The victory of strongmen and plutocratic economics, or the result of the free market?

Park Chung-hee and the Korean chaebols are important forces in the launch of South Korea's market economy. But the inner driving force of the Han River Miracle comes from the transfer of international technology and capital.

Under the general pattern of the struggle for hegemony between the United States and the Soviet Union and the trade war between the United States and Japan, Asia's industrial economy has shown a "flying goose industrial development pattern" (Japanese economist Kaname Akamatsu). Park Chung-hee understands how to survive as a small country and has gained support from the United States. A large amount of ready-made technology and international capital transferred from Japan.

However, the background of the Han River Miracle is still capitalism supported by the military. After the fall of the strongman, the contradiction between South Korea's reform system and the free market intensified. This is a hurdle that any traditional development of a free market will eventually face.

In 1972, Park Chung-hee announced the reform constitution, banned all political parties and all political activities, implemented press censorship, and implemented the reform system.

After the promulgation of the Restoration Constitution, demonstrations broke out among students at Korea University. Park Chung-hee signed the "Emergency Measures No. 7" order, sending troops to occupy Korea University, banning student demonstrations, arresting rebellious students, and directly sentencing them to prison terms of not less than three years but not more than ten years without going to court.

After Park Chung-hee was assassinated, Choi Kyu-ha became the acting president, and the Korean separatist movement rose, leading to the "Seoul Spring". However, more than a month later, Quan Dou-hwan successfully seized power by launching a military coup. Kim Dae-jung and Kim Young-sam led the democrats to issue the "Declaration on Promoting Democracy", triggering large-scale demonstrations and demanding Chun Doo-hwan's resignation.

In May 1980, Chun Dou-hwan declared emergency martial law, banned all activities, arrested Kim Dae-jung, Kim Young-sam and others, causing more than 4,000 casualties. This is the famous Gwangju incident.

Despite continued economic growth, both Park Chung-hee and Chun Doo-hwan face challenges to their regime's legitimacy. In order to strengthen the sense of identity and glory and cover the issue of regime legitimacy, Chun Douhuan successfully applied for the 1988 Seoul Olympics. However, what Ling Quan did not expect was that the Seoul Olympics would give Korea a golden opportunity to seize the country.

In June 1987, due to the torture to death of Seoul University student Park Jong-cheol, South Korea set off a climax of the democratization movement. The international media paid close attention to Quan Dou-hwan and put great pressure on him. The International Olympic Committee issued a warning to South Korea to cancel South Korea’s right to host the Olympics.

At this time, Chun Dou-hwan had to retreat behind the scenes and recommended Roh Tae-woo to come forward to calm the incident and run for the next president.

On June 29, Roh Tae-woo, who had no choice but to retreat, announced a series of compromise measures to reporters. These include amending the constitution and implementing a direct election system for the president; pardoning Kim Dae-jung; protecting civil rights; and advocating freedom of speech. This is the Eight-Point Declaration on Democracy (June 29 Special Declaration).

This Olympic Games has changed South Korea’s national fortunes.

The 1988 Seoul Olympics was held as scheduled. This year, the Korean Constitution was revised to provide for economic liberalization and democratization. This poses a challenge to the chaebol economy.

1988 was the most important year in the history of South Korea. It can be said to be "a major change unseen in a thousand years." In human history, the evolution of all countries has faced a historic leap, that is, from a natural country to a country ruled by law. Around 1990, the international situation was turbulent, and many companies faced this opportunity. But currently, most have not accomplished this feat. South Korea is lucky, they changed history with the help of the Olympic Games.

The South Korean army faces the same experience as the Pahlavi dynasty of Iran, that is, the paradox of authoritarian modernization reform.

American sociologist Davis proposed the "Davis J Curve" in 1962 about "when revolution will break out." Davis believed that poverty alone was not enough to spark a revolution. Those most prone to revolution are not those who are closed or open, but those who are in the process of modernization.

I have pointed out before that the modernization path of a dictatorial monarch is a process of self-destruction. The autocratic monarchy under reform is only a temporary system in the process of modernization. 【2】

With the reform and opening up, social stability decreases and the economy continues to grow. Once the economy stalls, it may lead to an imbalance between reality and expectations. This kind of psychological frustration and low tolerance for unfairness after opening up are the soil that breeds revolution.

However, the South Korean army and South Korea’s national destiny are completely different from the Pahlavi dynasty and Iran. Roh Tae-woo chose to revolutionize himself, while Pahlavi was revolutionized. One is moving towards the rule of law, while the other is regressing to the rule of theocracy.

This difference is worth pondering. Analyzing it from an economic perspective only, the capitalism promoted by Park Chung-hee, although its connotation is the chaebol economy, is also an export-oriented economy, and its economic benefits benefit a wider range. The oil economy developed by the Pahlavi dynasty has little to do with the interests of the Islamic people. Most Iranian people do not make a living in the international market. In comparison, South Korea's trend toward an open economy is difficult to reverse.

In 1990, Roh Tae-woo tried to curb the chaebol economy to ease the pressure. However, the chaebol forces fiercely resisted. On January 8, 1992, Hyundai Group’s Jung Joo-young announced that since Park Chung-hee, Hyundai Group has paid billions of won to the authorities every year. This scandal severely damaged Roh Tae-yu's prestige. Two days later, Zheng Juyong announced the establishment of the Korean Party and personally participated in the Korean Party.National election.

In the 1992 general election, Zheng Juyong was defeated and Kim Young-sam was elected president.

This election is of landmark significance. Kim Young-sam was South Korea's first non-military president and a victory for the democratization movement. However, South Korea has just lost its military president and ushered in direct competition from chaebol parties. Chung Ju-young is the first chaebol in South Korea to run for president. Chung Joo-young's participation in the party's candidacy signifies that South Korea's chaebols are directly involved in the struggle for supreme power through legal means.

Since then, South Korea's civilian forces and chaebol forces have faced off nakedly on the presidential stage, fighting bloody battles, and staged the "Blue House Curse" again and again.

The openness of public opinion has made chaebols passive. Chaebol scandals and sex scandals have been exposed and even made into movies and TV series. After Kim Young-sam came to power, he thoroughly investigated the financial problems of Chun Dou-hwan and Roh Tae-woo, and put Chun and Roh in prison.

At the same time, Kim Young-sam promoted South Korea's economic globalization, gradually opened up its financial market, and joined the Organization for Economic Co-operation and Development (OECD); he abolished the "economic plan" and promoted capitalism to shift to an international free economy.

03 Democratic President and Chaebol

In 1997, the Asian financial crisis broke out, severely damaging the Korean economy.

The following year, South Korea’s economic growth plummeted to -5.13%. You know, during the Jianghan Miracle Era, South Korea's economic growth rate exceeded 8% in most years.

This crisis almost bankrupted South Korea. In 1998, the leverage ratio of South Korea's non-financial corporate sector reached a historical high of 110%, and the average corporate debt ratio exceeded 400%. The number of defaulted companies in South Korea is as high as 22,828. Debt risks have been transmitted to the banking system, and bank non-performing loan ratios have risen rapidly. 【3】

When the crisis broke out, South Korea’s foreign exchange reserves were only US$5 billion, while its short-term foreign debt was as high as US$58.37 billion. The exchange rate market was in danger.

South Korea urgently sought assistance from the International Monetary Fund (IMF). The latter provided South Korea with a package of loans worth US$57 billion, bringing South Korea back from the brink of bankruptcy.

However, the conditions of the International Monetary Fund are to reform the chaebol system, rectify the financial system, and open up foreign investment.

At that time, public opinion in South Korea sparked a fierce debate. Some people believed that economic opening up could use external forces to end the monopoly of chaebols and eliminate stubborn economic diseases; others believed that this was a cooperation that was powerless and humiliating to the country.

South Korea’s cooperation with the International Monetary Fund has seriously damaged vested interests, the chaebols, who tried to use the stick of doctrine to resist reforms and vigorously attacked Kim Young-sam’s liberal reforms.

This financial crisis is a spillover risk. The reason why South Korea has been hit hard is not a problem of open economy and free market, but the root cause of the chaebol economy and its debt-based economy.

The relationship between Korean commercial banks and chaebols is complicated. They provide large-scale loans to chaebol companies, and the prevention and control system is extremely fragile. In 1997, among South Korea’s top 30 wealthyValve’s debt-to-equity ratio is as high as 518%, and five of them even exceed 1,000%.

The International Monetary Fund requires South Korea to close commercial banks that provide benefits to chaebols and cut off the root cause of the chaebol economic crisis. The International Monetary Fund requires South Korea to raise interest rates to 30%. Foreign banks took the opportunity to enter, and chaebol companies were hit.

This crisis has led to the bankruptcy of a large number of chaebol companies. Half of the top 30 chaebols have been liquidated, merged and acquired. Among them, the second largest chaebol, Daewoo Group, collapsed, ending the history of chaebols being “too big to fail.”

Jang Ha-sung, a Korean economist and current ambassador to China, wrote a book called "Korean Capitalism." Regarding the controversy caused by this crisis, Ambassador Zhang pointed out in the book: "If the problems of developed countries in the West are the product of market standardism, then the problems of South Korea are caused by the failure to correctly establish market economic norms." [4]

He believes that Korean-style capitalism is similar to what Max Weber called "pariah capitalism", manifested in nepotism, nepotism, small groupism, local protectionism, Characteristics such as corruption and bribery.

Ambassador Zhang believes that the Korean economy needs to be more open and free, and cannot miss or return to the "Park Chung-hee era" that was highly involved in economic production and dominated everything.

After Kim Young-sam stepped down, Kim Dae-jung came to power. Both "two golds" were civilian presidents, continuing liberalization and international reforms. Kim Dae-jung revised the financial bill, cleaned up and rectified 600 financial institutions, and closed 11 banks with a capital ratio of less than 8%; prohibited chaebol companies from providing loan guarantees to each other; injected public funds to help detoxify the financial system; cut off control Credit intervention by commercial banks; opening up financial markets and implementing liberalization of foreign exchange transactions.

In 1999, South Korea's economy rebounded strongly, with economic growth reaching 11.47%, and maintained at 9.06% in 2000. Bankruptcy was avoided, and the economy emerged from the haze of crisis.

Foreign capital has entered the banking system, and U.S. capital has successively acquired Korea First Bank and Korea Foreign Exchange Bank, limiting the control of chaebol forces over banks and improving banks' risk control levels. In 2001, the non-performing loan ratio of South Korea's financial system dropped to about 3%.

In 2003, another civilian president came to power, and he was Roh Moo-hyun.

This year, South Korea’s economy began to bid farewell to high growth and dropped to a medium-speed growth platform. President Roh inherited the sunshine of Kim Dae-jung and promoted social democratization and economic liberalization.

However, Roh Moo-hyun encountered the global financial crisis in 2008, and the foreign exchange and stock markets plummeted. This crisis has provided chaebol forces with a good opportunity to turn defeat into victory and vigorously criticize the liberalism promoted by Kim Dae-jung and Roh Moo-hyun.

In this year’s general election, Lee Myung-bak successfully entered the Blue House. Lee Myung-bak joined Zheng Juyong's Hyundai Group in 1965; he served as the CEO of Hyundai Construction at the age of 36 and has served Hyundai Construction for a long time.Up to 27 years. Chung Ju-young failed to run for president that year, and 16 years later Lee Myung-bak helped the chaebol forces regain power. Lee Myung-bak's important task is to rescue the market, and a bailout based on easing is most beneficial to the chaebol forces.

Roh Moo-hyun was investigated after he stepped down, and Roh Moo-hyun admitted some bribery charges. In May 2009, Roh Moo-hyun committed suicide by jumping off a cliff at Owl Rock, a hill behind his private residence.

The "Blue House Curse" escalated. After Lee Myung-bak resigned, conservative Park Geun-hye took over. Park Geun-hye is the daughter of Park Chung-hee and the first female president in South Korean history. Park Geun-hye changed the name of the party in an attempt to get rid of Lee Myung-bak's "pro-chaebol" image and promoted the banner of "economic democratization and welfarism." After 2008, South Korea's economy continued to be sluggish, and some people expected Park Geun-hye to lead South Korea to restore the "Jianghan Miracle."

However, in 2016, Park Geun-hye was impeached by Congress due to her best friend’s political interference.

In the 2017 general election, civilian President Moon Jae-in won the election, and the pro-democracy movement regained power again. Moon Jae-in was thrown into jail by Park Chung-hee when he was in college and was therefore expelled from the school. Moon Jae-in is also an ally of Roh Moo-hyun and hates conservatives.

After Moon Jae-in came to power, he quickly launched a judicial investigation into Park Geun-hye. The case was confusing, and the prosecutor's office prosecuted Park for bribery and abuse of power. The court sentenced Park Geun-hye to 25 years in prison in the second trial, but a few days later the final trial revoked the second-instance verdict. In July 2020, Park Geun-hye was finally sentenced to 20 years in prison.

While investigating Park Geun-hye, Moon Jae-in also successfully got rid of former President Lee Myung-bak. Lee Myung-bak's family and close associates were involved in a series of corruption cases, and Lee Myung-bak believed that he was being retaliated against. In February 2020, Lee Myung-bak was sentenced to 17 years in prison.

Moon Jae-in shows his image of eliminating harm for the people. He ordered investigations into the Jang Ja-yeon case, the Li Shengli nightclub incident, etc. He stressed: "We cannot talk about a just society without finding out the truth about these incidents that happened to the privileged classes of society."

The Park Geun-hye and Lee Myung-bak cases have involved a large number of chaebols. Nine major chaebols, including Samsung, Hyundai Motor, SK, LG, Lotte, and Hanwha, have been collectively investigated. Lee Jae-yong of the Samsung family was sentenced to five years in prison for bribery. However, the second trial was changed to two and a half years, suspended for four years, and released in court.

Behind the "Cheong Wa Dae Curse" is the game between plutocratic forces and civilian forces, and the struggle between conservatives and democratic movements.

Since Kim Young-sam, South Korea has embarked on the road of democratization and economic liberalization. Chaebol forces are also constantly adapting to challenges from China and internationalization. In 2017, the total revenue of South Korea's six largest chaebols was approximately US$942 billion, accounting for more than 60% of South Korea's annual GDP. Among them, the annual revenue of Samsung Group alone accounted for more than 20% of South Korea's GDP. 【5】

Consistent with global trends, the gap between the rich and the poor in South Korea is widening day by day, and the growth rate of residents’ real disposable income and real wages are both lower than the growth rate of per capita GDP.

Korean people have an ambivalent attitude toward chaebols. They are eager to enter chaebol companies and gain benefits.to obtain higher incomes and at the same time hope to break the control of the chaebol over the economy.

Will South Korea decline?

Economist Mancur Olson believes in "The Rise and Decline of" that the existence of a large number of profit-sharing alliances (interest groups that lobby and intervene) may become a necessary and sufficient condition for the decline of a country, but it does not The existence of a large number of profit-sharing alliances does not seem to be a sufficient condition for prosperity. At best, it can only be a necessary condition. 【6】

However, although the "Blue House Curse" is naked, Korean society is progressive. South Korea has achieved a historic leap and obtained a ticket to development. This is an outstanding representative in the East Asian cultural circle.

Is South Korea a typical path for East Asia’s modernization?

Japan follows the British conservative line, South Korea’s development is obviously more in line with East Asian culture, and Iran and India have no roots in East Asian culture.

South Korea’s modernization is driven by East Asia’s “promising” drive. It starts with economic reform, uses support for economic forces, and absorbs foreign capital and technology. Then there is a conflict between an open economy and conservatism, and under external pressure, public opinion is promoted. Liberalization and democratization achieve a historic leap (most cannot complete it); finally, the vested forces and the democratic movement forces launch a protracted struggle.

South Korea (Park Chung-hee), Singapore (Lee Kuan Yew) and Taiwan (Chiang Ching-kuo) have similar modernization paths, but the degree of plutocratic power and vested power is different. In addition, will Vietnam, whose economy and economy are making rapid progress, break this East Asian paradigm?

Last week, Seoul Mayor Park Won-soon, who was considered the best candidate for the next president, committed suicide. Moon Jae-in and the pro-democracy movement lost a key figure. The "Cheong Wa Dae Curse" will continue. But South Korea is still lucky. When it becomes involuted in the middle of the journey, that is the real cruelty.

References

[1] The iron-clad chaebols, the smooth president: South Korea’s chaebols’ impact on the economy Enlightenment, Mu Feng, poker investor;

[2] Iran, why is it here, Zhibenshe;

[3] How did South Korea deal with debt default in 1997, Zhao Wei’s team , Changjiang Hong View;

[4] Korean capitalism, Zhang Xiacheng, CITIC Publishing House;

[5] The foggy and shady Korean political scene, Ah Hui, Xinmin Weekly;

【6】 The Rise and Fall of , Mancur Olson, Shanghai People's Publishing House.