(OT) Performance of East Asian Stock Markets in 2013

Maybe this is one of the reasons Japan's Abe decided to go visit the war shrine, thinking his "Abenomics" has won...

From January 4 to December 30, 2013:

• Japan's Nikkei: up over 50%

• Hong Kong's Hang Seng Index: flat

• Shanghai's Composit Index: down 8%

• South Korea's Kospi: flat

(Chart created at stockcharts.com)

Of course the depreciating currency of Japan has helped a great deal.

Japanese yen, from November 2012 to December 2013:

The Japanese government and the South Korean government have reduced the size of the currency swaps since October 2012 to an insignificant level ($10 billion). Though the South Korean government has since expanded the currency swaps with China, it now has less ammo to cheapen its own currency.

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North Korea Threatens South Korea with "Final Destruction" in the UN Disarmament Conference, US Ambassador Tweets "Offensive"

North Korea has been doing its best to get the attention of the US, and the US just yawns.

The US Ambassador to the Conference on Disarmament Laura Kennedy tweeted the threat was "offensive".

From Reuters (2/19/2013; emphasis is mine):

North Korea threatens South with "final destruction"

(Reuters) - North Korea threatened South Korea with "final destruction" during a debate at the United Nations Conference on Disarmament on Tuesday, saying it could take further steps after a nuclear test last week.

"As the saying goes, a new-born puppy knows no fear of a tiger. South Korea's erratic behavior would only herald its final destruction," North Korean diplomat Jon Yong Ryong told the meeting.

Jon's comments drew quick criticism from other nations, including South Korea, France, Germany and Britain, whose ambassador Joanne Adamson said such language was "completely inappropriate" and the discussion with North Korea was heading in the wrong direction.

"It cannot be allowed that we have expressions which refer to the possible destruction of U.N. member states," she said.

Spanish Ambassador Javier Gil Catalina said the comment left him stupefied and appeared to be a breach of international law.

"In the 30 years of my career I've never heard anything like it and it seems to me that we are not speaking about something that is even admissible, we are speaking about a threat of the use of force that is prohibited by Article 2.4 of the United Nations charter," Catalina said.

Since the North tested a nuclear bomb last week in defiance of U.N. resolutions, its southern neighbor has warned it could strike the isolated state if it believed an attack was imminent.

Pyongyang said the aim of the test was to bolster its defenses given the hostility of the United States, which has led a push to impose sanctions on North Korea.

"Our current nuclear test is the primary countermeasure taken by the DPRK in which it exercised its maximum self-restraint," said the North Korean diplomat Jon.

"If the U.S. takes a hostile approach toward the DPRK to the last, rendering the situation complicated, it (North Korea) will be left with no option but to take the second and third stronger steps in succession," he said, without indicating what that might entail.

North Korea has already told key ally China that it is prepared to stage one or two more tests this year to force the United States into diplomatic talks, a source with direct knowledge of the message told Reuters last week.

"OFFENSIVE"

U.S. Ambassador Laura Kennedy said she found North Korea's threat on Tuesday profoundly disturbing and later tweeted that it was "offensive".

Poland's representative suggested North Korea's participation in the U.N. forum should be limited.

Impoverished and malnourished North Korea is one of the most heavily sanctioned states in the world.

It is still technically at war with South Korea after a 1950-53 civil war ended in a mere truce.

Washington and its allies are believed to be pushing to tighten the noose around North Korea's financial transactions in a bid to starve its leadership of funding.

Jon said last week's test was an act of self-defense against nuclear blackmail by the United States, which wanted to block North Korea's economic development and its fundamental rights.

"It is the disposition and firm will of the army and people of the DPRK to counter high-handed policy with tough-fist policy and to react to pressure and sanctions with an all-out counter-action," he said.

Jon said the United States had conducted most of the nuclear tests and satellite launches in history, and he described its pursuit of U.N. Security Council resolutions against North Korea as "a breach of international law and the height of double standards".

Neither Russia nor China, which are veto-wielding members of the U.N. Security Council, spoke at Tuesday's meeting in Geneva.

Before its nuclear test, North Korea was already facing growing diplomatic pressure at the United Nations.

The U.N. Human Rights Council is widely expected to order an inquiry next month into its leaders' responsibilities for crimes against humanity.

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South Koreans Choose Daughter of Dictator as New President

Ms. Park Geun Hye is the daughter of the nation's longest-serving dictator Park Chung-hee.

East Asians love political dynasties, despite their lip service to the otherwise. With the election of Shinzo Abe, Japan is after all a proud member of East Asia.

From Bloomberg News (12/19/2012):

Park Geun Hye was elected president of South Korea, becoming the first woman to lead Asia’s fourth- biggest economy more than 30 years after her father’s reign as dictator ended with his assassination.

Park, 60, of the ruling New Frontier Party, led main opposition nominee Moon Jae In, 51.7 percent to 47.9 percent with 94.2 percent of the vote counted, the National Election Commission said on its website as of 12:55 a.m. local time. Moon, 59, conceded defeat, saying he was sorry he couldn’t fulfill the expectations of his supporters.

The never-married daughter of the nation’s longest-serving dictator will lead a country with one of the world’s most entrenched gender gaps. She must confront a slowing economy, widening income disparity and re-engagement with North Korea after the totalitarian state’s rocket launch last week.

“Park’s victory is historically symbolic,” said Lee Nae Young, a political science professor at Korea University in Seoul. “Voters decided she will offer the most stable leadership to navigate the country through a global recession, and mounting internal and external uncertainties, especially in foreign affairs and national security.”

Park will take office on Feb. 25, when President Lee Myung Bak’s single five-year term ends.

“This is your victory,” she told a crowd in Seoul. “You’ve opened a new era and I will carry your trust deeply in my heart.”

(Full article at the link)

This is your victory. This is a new era. Hmmm. Where have I seen these words before?

What's historical about her victory escapes me, other than the fact that she is a woman. I suppose that's enough as "historical".

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Further Trouble at South Korea's Yeonggwang Nuclear Power Plant: Cracks in Control Rod Tunnels

(UPDATE 11/10/2012 from Yomiuri) It was Reactor 3 that was found with cracks in control rod tunnels. If this reactor cannot come back online within this year, and with Reactors 5 and 6 stopped in order to replace parts with forged certificates, South Korea may have zero spare capacity in January.

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Yeonggwang Nuclear Power Plant has 6 pressurized water reactors. It is the fourth largest nuclear power plant in the world in terms of capacity. Two of its reactors were shut down in just recently to replace parts, as over 5,000 parts used in the five reactors were found with improper (forged) certification.

Now, one of the reactors was found with cracks in 6 of the control rod tunnels. No indication on which reactor.

(The world number one is TEPCO's Kashiwazaki Kariwa Nuclear Power Plant, by the way.)

From CNBC quoting Reuters (11/9/2012; emphasis is mine):

South Korea finds cracks in control rod tunnels at nuclear plant

SEOUL (Reuters) - South Korean nuclear regulators have found microscopic cracks in tunnels that guide control rods at a nuclear plant under maintenance, government officials said on Friday, raising new concerns over the country's nuclear power sector.

The discovery of the cracks at the reactor comes just days after two reactors at the same plant in Yeonggwang county, in the southwest of the country, were shut down to replace parts that had been provided with forged certificates.

South Korea is investigating how thousands of parts for its nuclear reactors were supplied using forged safety documents, with regulators set to inspect all 23 of the country's facilities - a move that could test public support for the industry and threaten billions of dollars worth of exports.

"There are cracks in six tunnels. The reactor has been halted since October 18 for regular maintenance and now the process has been extended by a further 47 days for repair of the cracks," said a spokeswoman for the presidential Korea Nuclear Safety and Security Commission.

She said it was the first time cracks of this type had been found in South Korea's nuclear sector, but added the safety risk was not serious enough to require public disclosure.

The reactor affected by the cracks has a capacity of 1,000 megawatts, and a government official said the extended shutdown could complicate efforts to ensure steady supply of power through the peak winter season after the two other reactors had been stopped until the end of this year.

Asia's fourth-largest economy generates 30 percent of its electricity from 23 nuclear reactors at state-owned plants, and the government has warned of the potential for unprecedented power shortages due to the shutdowns as demand peaks in winter.

"This could affect power supplies, but we are preparing contingency plans," said a senior economy ministry official, who declined to be named as he is not authorized to speak to the media.

South Korea's state-run nuclear power utility said it was investigating the cause of the cracks, but said they had not caused any leaks.

"There are no penetrating cracks or leaks," Korea Hydro & Nuclear Power, a subsidiary of state utility Korea Electric Power Corp (KEPCO), said in a statement. It operates all of the country's nuclear power plants.

The country's power utility and nuclear regulators have come under heavy criticism this week after the disclosure that eight firms had used forged safety documents to supply parts to nuclear plants raising concern of broader potential problems in the large and growing nuclear programme.

A task force has been established with government and private sector experts to inspect all reactors to ensure their parts are properly certified. It will also inspect five reactors under construction to see if troubled parts with forged certificates have been provided.

(Additional reporting by Meeyoung Cho; Editing by Jack Kim, Ed Davies and Ian Geoghegan)

There are people in Japan ridiculing the Koreans for the forged certification issue and the shutdown of the reactors, no doubt partially fanned by the territorial row with South Korea over Takeshima Island.

I guess they've forgotten that Japan is downwind.

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Fish Imported from Japan Found with Radioactive Cesium in South Korea

From TBS News (3/9/2012):

韓国、日本産水産物 セシウム検出増える

South Korea finding more marine products from Japan with radioactive cesium

韓国に輸入された日本産の水産物から、放射性物質が検出されるケースが増加していることが分かりました。ただ、いずれも基準値以下のため、市場に流通しています。

It has been revealed that an increasing number of marine products from Japan imported to South Korea have been found with radioactive materials. Since the levels are below the safety limits, they are being sold in the marketplace.

　韓国の農林水産食品省は８日、輸入された日本産の水産物から、放射性物質のセシウムが検出されるケースが増加していると発表しました。

South Korea's Ministry of Agriculture, Forestry, Fisheries and Food announced on March 8 that an increasing number of marine products imported to South Korea from Japan have been found with radioactive cesium.

　日本から輸入された水産物について、韓国政府は出荷する際に日本で行われる放射能検査とは別に、独自に検査を行っています。

The South Korean government conducts its own test of marine products imported from Japan, aside from the radiation test in Japan [by the Japanese authorities] at the time of shipment.

　セシウムが検出されたのは、サバやスケトウダラなどで、去年４月から１１月までの８か月間は１３件でしたが、去年１２月以降急増し、２月までの３か月間だけで４０件に上っています。

Radioactive cesium was found in mackerels and Alaska pollock. There were 13 cases of cesium detection in 8 months from April to November last year, but the number significantly increased from December onward. There are 40 cases of cesium detection in 3 months from December to February this year.

　ほとんどが１キロあたり７ベクレル以下でしたが、最大９７．９ベクレル検出されたケースもありました。ただ、いずれも韓国の安全基準値を下回る数値だったことから、市場に流通しています。

In most cases, the radioactive density was 7 becquerels/kg or less. The maximum was 97.9 becquerels/kg. Since they are all below the safety limit of South Korea, they have been sold in the market.

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The Japanese Government's Handling of Dumping Contaminated Water: "Ugly, Ugly Japanese"

I am really ashamed to be Japanese.

South Koreans are upset, so are the Russians, over TEPCO dumping contaminated water, no matter they say it's safe.

They are upset, partly because Japan didn't bother to notify them.

Did Japan notify them, or didn't? Chief Cabinet Secretary Edano said his government most assuredly did, but qualified it by saying since it involved multiple countries his government had notified the IAEA [so that the IAEA would in turn notified the countries involved].

Huh?

That Edano's bureaucratic position was confirmed by Minister of Foreign Affairs Takeaki Matsumoto in the press conference on April 5.

According to Yomiuri (in Japanese, link added on the UN Convention of the Law of the Sea; 1:09AM JST 4/6/2011):

　東京電力福島第一原子力発電所の事故を巡り、低濃度の放射性物質を含む汚染水を海に放出したことに韓国やロシアが懸念を表明している問題で、松本外相は５日の記者会見で「健康に有意な影響はない。国際法上の義務との関係で直ちに問題とならない」と述べた。

Asked about South Korea and Russia's concern over the release of low radioactive water in to the ocean during the press conference on April 5, Foreign Minister Matsumoto said that there was "no significant effect on health, and not a problem with Japan's obligation under the international treaty".

　「国際原子力機関（ＩＡＥＡ）に通報し、外交団向けに説明し、ファクスでも連絡している」とも強調、対応に問題はなかったとの立場を示した。

Matsumoto clarified the government position that there was nothing wrong or amiss in the Japanese government's handling, emphasizing that "the Japanese government notified the International Atomic Energy Agency (IAEA), explained to the diplomatic corps, and sent [them] faxes [to notify and explain?]"

　外務省によると、４日午後４時から同省内で外交団向けの説明を行った。

According to Ministry of Foreign Affairs, the explanation to the diplomatic corps was done at the Ministry from 4:00PM on April 4. held an [That's exactly when the TEPCO held an un-televised press conference and told the journalists in the room that it was dumping contaminated water into the sea.]

　国連海洋法条約では、海洋環境の保護や汚染防止のほか、汚染による損害で危険が及ぶ国への通報を求めている。枝野官房長官は５日の記者会見で 「（同条約で）海洋汚染防止の一般的義務を日本も負うが、直ちに差し迫った汚染の影響を周辺各国に及ぼすものではない。近隣国をはじめ関心が高いので、外 交ルートを通じて適切な説明を徹底したい」と語った。

The United Nations Convention on the Law of the Sea requires [the signatories] protect the marine environment from pollution, and notify the countries who would be affected by the pollution. Chief Cabinet Secretary Edano said in the press conference on April 5 that "Japan has a general obligation (under the treaty), but [dumping the contaminated water in the ocean] does not immediately pose a threat of pollution to the neighboring countries. But since the countries, including the neighboring countries, have a lot of interest [in the dumping of contaminated water], we will make sure the appropriate explanation is conveyed through the diplomatic channel."

What arrogance from a group of elementary school boys with wrinkles and gray hairs (or black hairs that are dyed).

Both South Korea and Russia have sent (or tried to send) material and monetary assistance to the relief effort in Japan after the earthquake and tsunami. South Koreans raised a huge amount of money, sent foods and blankets to Tohoku (I'm afraid they are still sitting at the official depots undelivered to people who needed them). Russia has offered help from experts with detailed knowledge of Chernobyl reactor accident (the Japanese government delayed issuing visas for fear that the presence of Chernobyl experts might signal to the world that the Fukushima situation was dire).

They are the closest neighbors of Japan. And what did the Japanese government do? It told the IAEA to notify them. Oh but we sent the fax to their embassies in Tokyo, wasn't that good enough? And we called their diplomats to the Ministry and told them about it at the same time we instructed TEPCO to tell the journalists so that they could write about it for the Japanese people later.

Well, wrinkled elementary school boys of Japan who inhabit the government, let me tell you what you should have done:

1. It was apparent that TEPCO would run out of space to store contaminated water at the plant for quite some time. Instead of telling the foreign diplomats 3 hours before you would start dumping the contaminated water, you would contact them several days before April 4. Maybe a week before. You would send high level Foreign Ministry officials, yes bureaucrats but they know more about proper international protocols than you politicians, to the embassies of the countries that could possibly be affected - Russia, South Korea, China, Taiwan, for a start.

2. These high level officials would meet the ambassadors, and explain the situation. Ask the ambassadors to immediately convey the message to their respective head of state back home.

3. Prime Minister Kan would personally place a call to the ambassadors and then the heads of the states in these countries, asking for their understanding of the dire situation.

4. The government would contact the IAEA at the same time, and solicit their help in convincing and placating the affected countries by making them understand the situation better.

5. At the same time, you would tell the municipalities along the coast, up and down from the plant, that you were planning to release the contaminated water. They would naturally object, but you could have at least explained the situation to them beforehand, instead of what you did, which was to take them by total surprise after the fact.
   

6. After the countries were fully notified and informed of the situation and gave their reluctant consent, Prime Minister Kan would appear on TV, and announce that he instructed TEPCO to release the contaminated water into the ocean, and HE apologize to everyone - fishermen, Japanese, Russians, Koreans, the world, instead of a poor TEPCO manager having to announce, who was choking with tears. (h/t threeggg for vid)
   

Instead, you hid behind a middle manager at TEPCO, hid behind a fax machine.

And TEPCO management hid behind their middle manager, whose looks tell me (I could be wrong) he is actually an engineer in a position that requires hands-on work. If TEPCO had to announce, it should have been announced by the chairman of the company who is responsible for the company. Instead, the top management made this middle manager do it.

I guess it is too late for you to grow up, so why don't you all move out and let adults handle the problems?

If there is any adult left in Japan, it is assuredly not in the government at any level.

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Koreans Are Pissed at Radioactive Water Dumping by TEPCO

Yomiuri's Seoul Correspondent reports (in Japanese; 11:19AM JST 4/5/2011):

(Seoul: Takashi Nakagawa) Regarding the release of radiation contaminated water into the ocean from Fukushima I Nuclear Power Plant, the South Korean government conveyed its worries to Japan's Foreign Ministry through its Embassy in Japan at night of April 4 [when TEPCO started dumping], that "this may cause problems in international law."

The South Korean government is not pleased that there was no prior, formal notice from the Japanese government concerning the release of the contaminated water.

【ソウル＝仲川高志】韓国政府は４日夜、福島第一原発で汚染水が海に放出された問題で、在日韓国大使館を通じ、日本外務省に「国際法的問題を引き起こす可能性がある」との懸念を伝えた。

　韓国政府は、日本政府から汚染水の放出について、事前に正式な通告がなかったことを問題視している。

The response to that from the Japanese government? Here's what the government's mouthpiece Chief Cabinet Secretary Edano said in the morning presser on April 5 (from Asahi):

Question: This (dumping contaminated water) may be in violation of the international treaty to prevent pollution of the ocean. Have you explained [the situation] to the countries that would be affected?

Edano: The government has notified according to the treaty. However, the affected countries are on the Pacific Ocean, so the government has reported to an international organization [he doesn't say which international organization] instead of each individual countries.

――国際法の海洋汚染防止条約に違反するのではないかと思うが、周辺国には説明をしているのか。

　「条約に基づいての通報はしている。ただこの場合、周辺国というのが太平洋側なので、直接に個別の国というよりも国際機関の方に報告している」

Hmmmm. South Korea is on the Japan Sea side, and it is already been affected by the radioactive materials falling on their country.

(I'd better take a closer look at the French paper on radiation effect on marine environment. It has a simulation on how the radioactive water may travel. It's in French, though, and that's my problem...)

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South Korea's Ongoing Bank Run

"Unrest" of a different kind is found in South Korea, where there is an on-going bank run.

The latest from Korea Times (2/22/2011):

One more savings bank shut down

The nation’s financial regulator said Tuesday that it has suspended one more savings bank reeling from massive construction financing loans defaults.

The Financial Services Commission (FSC) announced it had suspended Domin Savings Bank, based in Chuncheon, Gangwon Province, for six months. The lender closed its six branches there voluntarily earlier in the day for fear of a bank run.

Domin is one of five savings banks that have failed to meet the government’s recommendation of a 5-percent capital adequacy ratio. It saw a total of 18.8 billion won withdrawn, Monday.

Since new FSC Chairman Kim Seok-dong took the helm of the regulator last month, eight savings banks have been ordered to halt operations.

An FSC official said that Domin’s bank for international settlement (BIS) ratio had fallen below 1 percent, forcing the regulator to suspend its business.

Other than the suspension of Domin, the FSC chairman’s all-out efforts to stifle lingering jitters over possible shutdowns of distressed savings banks through mass withdrawals are working, as the chances of bank runs appear to have abated.

Kim visited Mokpo, South Jeolla Province, where the suspended Bohae Savings Bank is based, Tuesday, and continued to prevent an exodus among depositors of the secondary banks, who were alarmed by the financial regulator’s suspension of business of six similar lenders last week.

What is the world coming to?

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50,000-Won Bank Note Debuts in South Korea

50,000-won Banknotes Debut Today (6/22/09 Korea Times)

"South Koreans will not have to carry a fat wallet full of 10,000-won notes anymore, with a new 50,000 won, the highest denomination bill, going into circulation from today.This is the first issuance of high-valued notes in 36 years since 1973 when the 10,000 won note was first introduced. Until now, 10,000 won notes were the highest-denominated bills, followed by 5,000 won and 1,000 won."

50,000 won sounds like a lot of money, but it is about US$39. Bank of Korea shelved the plan to introduce 100,000-won bill for now. The highest denomination for the Japanese currency is 10,000 yen, about US$104.

Korea Times seems to think the bill with large denomination is a good thing.

"The 50,000-won banknote is expected to have a positive impact on the economy and people's daily lives. The higher-valued bills are expected to encourage private spending, stimulating the local economy. In addition, the notes may substitute for 100,000-won checks. Banks currently spend a total of 280 billion won a year to issue checks."

So their thinking is that South Koreans will feel rich holding a large bill and spend more. To their credit, they do mention inflation in their article:

"In contrast, there are concerns that the higher-valued notes may stoke inflationary pressure and make bribery easier."

Considering Korea's economic growth in the past 36 years, the introduction of the new note may be way overdue.

"The introduction of the 50,000-won notes came on growing demand for higher-valued notes to reduce unnecessary economic costs and minimize people’s inconvenience. The 10,000-won note has been the highest-denominated bill for the past 36 years. During that period, prices and national income jumped 12-fold and 150-fold, respectively."

I would worry inflation, when Bank of Korea decides to go ahead with 100,000-won bill.

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