South Korea

Chosun Ilbo | English | News | Jan. 2, 2026 | UndeterminedInvestor Sentiment

Professor Jack Jang of the University of Kansas warns that the AI investment boom driving U.S. growth may cool down in 2026, potentially leading to an economic recession. He highlights that overheated AI investment, combined with increased protectionism since the second Trump administration, is exerting downward pressure on the global economy. Jang points out that the effective U.S. tariff rate of around 20%, much higher than in previous decades, has contributed significantly to inflation, with 87% of U.S. companies experiencing supply price increases and over 70% passing these costs to consumers.

Jang forecasts that while AI investments and data center construction have sustained U.S. GDP growth recently, the bursting of the AI bubble—marked by waning investor optimism—could arrive this year. He agrees that certain tech stocks appear overvalued. Globally, economic growth faces headwinds from weakening demand in Europe and China, rising right-wing populism, economic bloc formation, and tensions between trade and industrial policies. He also raises concerns about rising government debt, noting that accumulating debt amid uncertain growth prospects poses long-term fiscal risks, especially as high interest rates and low growth erode policy flexibility.

Regarding labor markets, Jang observes increased uncertainty amplified by AI adoption, even without direct job replacement, and warns that fiscal stimulus measures considered by the Trump administration may risk reigniting inflation. On U.S.-China relations, Jang describes the situation as unpredictable but notes a current trade truce maintained by President Trump, expected to hold until a planned state visit in April. He believes the global trade system is eroding gradually due to tariffs, retaliation, and unilateral industrial policies, though it has not collapsed entirely.

Jang anticipates that security-justified managed trade and carve-outs will increase, risking long-term damage to global trade stability. He assesses South Korea as managing its geopolitical and economic balance better than Japan through pragmatic hedging and supply chain diversification.

Hankyoreh - E | English | News | Jan. 2, 2026 | North Korea

North Korean media recently published photos showing Kim Ju-ae walking in front of her father, Kim Jong-un, during a site visit to newly completed factories in several North Korean counties. This visit was part of a series of ribbon-cutting ceremonies for 20 county-level factories scheduled to be built this year. Kim Jong-un was accompanied by his daughter Kim Ju-ae and his wife Ri Sol-ju, marking Ri's first public appearance in six months.

These images have reignited discussions about Kim Ju-ae’s potential status as Kim Jong-un's successor. South Korea’s National Intelligence Service indicated that Kim Jong-un is “in the process of finalizing a succession narrative” and has constructed a revolutionary narrative supporting her as the presumptive heir. Some observers view recent photos of Kim Ju-ae engaging publicly, including one where she shakes hands with fighter pilots and the latest one of her leading her father, as signals reinforcing her candidacy.

However, other analysts caution against reading too much into these photographs. Similar images showing Kim Ju-ae positioned ahead of or alongside Kim Jong-un have been published before, and experts note that a true successor usually does not stand in front of the supreme leader in such displays. Officials describe the photographs as more familial than indicative of a successor, suggesting no concrete evidence of an official succession plan has emerged from the visual cues so far.

During the factory openings, Kim Jong-un emphasized the importance of advancing provincial development and delivering benefits to the people, aligning with his 20×10 Regional Development Policy. The events reiterate the regime’s focus on economic and regional progress amid broader political continuity concerns.

Yonhap | English | News | Jan. 2, 2026 | Geopolitical Conflict and Disputes

South Korea's defense ministry announced that operational control of the 1st and 2nd Marine divisions, currently under the Army, will be restored to the Marine Corps for the first time in 50 years. The 1st Marine Division’s control will revert to the Marine Corps by the end of 2026, followed by the 2nd Marine Division by 2028. Presently, the 1st Division is under the Army’s 2nd Operation Command and the 2nd Division is controlled by the Army’s Capital Corps.

The Marine Corps will remain under the Navy, but its independence will be reinforced by granting its commander command and oversight authority equivalent to the chiefs of staff of other military branches. The defense minister also indicated plans to consider promoting Marines to four-star general ranks, as the current Marine Corps commander holds a three-star general position. Additionally, there will be a review of establishing an independent operations command and equipping the Marine Corps with a command structure and weapon systems comparable to other armed forces.

These changes are part of President Lee Jae Myung’s efforts to restructure South Korea’s military, composed of the Army, Navy, and Air Force, to strengthen the Marine Corps’ autonomy within the national defense framework.