The Cabinet meeting convened on Monday morning resembled a house of mourning.
Before anyone knew it, they were in their first year in power.
The Kim Sangcheol administration, which had set sail with an overwhelming number of seats and immense confidence, had been reduced to such a shabby state that the president’s face seemed to have aged ten years in a single year. If the opposition party had ended its three-year mourning period for the former president just a little sooner, even his seat might have been in danger.
“...”
“...”
The reason the faces of the Cabinet members were so dark was because the issue of public utility fees had become a hot topic among the people.
After a long silence, Kim Sangcheol opened his mouth.
“What a fine agenda. Korea Electric Power has suggested a very fine agenda for our society.”
Unlike his gentle tone, the president’s face was filled with murderous intent.
Chairman Park Bongsu. If only there were no eyes watching, he felt like dragging the man off somewhere quiet and sending him to heaven.
Because of the tiered pricing system that bastard had floated, public sentiment in the metropolitan area was already turning ominous.
The bastard had repeatedly emphasized “transmission costs” while taking aim at the capital region, and considering that half of Korea’s population lived in the metropolitan area, it was fair to see this as simply an electricity rate hike.
“Everyone, speak freely. How do you all see it?”
No sooner had he finished speaking than the Ministry of Health and Welfare raised its hand.
“Mr. President... it is impossible. The common people are already groaning under skyrocketing prices. The recently tallied closure rate among the self-employed is at a level even more serious than during the IMF crisis. If we add the burden of electricity bills on top of that, how much harder will people’s livelihoods become?”
“Then, Minister of Welfare, you are opposed?”
“Yes. Now is not the time to raise electricity rates, but to distribute energy vouchers to the people. Raising public utility fees is also extremely bad for the consumption-inducing effect.”
Consumption-inducing effect.
This was the economic term most beloved by Korean economic experts in the 21st century.
To explain it accurately would require going all the way back to Keynes, but to put it simply, it seemed to mean that the more you lazed around and consumed, the more profitable it was(?).
A representative example, according to economists, was that temporary public holidays were an extremely good thing. If a day off suddenly appeared, productivity did not fall; rather, the people’s leisure time increased, which meant productivity in leisure-related industries rose, and as a result, the domestic market improved. That was the effect of “inducing consumption.”
Empowered by this logic, every administration in history had clamped down on public utility fees.
If public transportation fares were lowered, people would move around more, and if electricity rates were lowered, people would spend that money buying other goods, so everything was supposedly good for the consumption-inducing effect.
But now, roughly twenty years later.
According to the economists’ explanations, economic effects worth tens of trillions of won should certainly have occurred, but strangely enough, only Korea Electric Power’s deficit had grown into the hundreds of trillions.
“Mr. President, I think differently. We must raise them.”
No sooner had the Minister of Welfare finished speaking than the Ministry of Environment raised its hand.
“With all due respect, the deadline is already approaching. The 2030 carbon reduction deadline. We must succeed in reducing emissions by 40% compared to 2018, but our coal-powered electricity generation still accounts for around 30%.”
The Ministry of Environment raised its voice.
Korea currently had two tasks before it. One was to reduce carbon emissions by a staggering 40% by 2030, and the other was to reduce them even further by 2035.
But just as electric vehicles lagged far behind internal-combustion vehicles in price competitiveness, carbon reduction too was full of inefficient elements. To meet the reduction amount allocated by the NDC, there was no choice but for the government to provide massive subsidies, just as with electric vehicles.
“To be frank, wasn’t the reason we scrapped anti-nuclear policy and restarted nuclear power plants entirely because of practical realities? We must follow reality this time as well. Not only must we raise electricity rates, we also need massive R&D investment related to this.”
When the Ministry of Environment’s impassioned speech ended, the president asked him.
“...You are saying we need to invest in R&D as well?”
“That is correct. At present, the entire global supply chain is concentrated in China, and that is not at all good for Korea’s energy security. The United States has already imposed an 800% tariff on Chinese solar panels. We too must secure our own independent technology in the long term.”
Kim Sangcheol felt as though tears of blood would flow.
As if raising electricity rates were not enough, now they needed a massive R&D budget as well... Then where on earth were they supposed to collect those taxes from? Was the National Assembly next year supposed to start discussing supplementary budgets from January?
“...Science Ministry. Minister of Science, what do you think?”
The Minister of Science and ICT spoke calmly.
“The Minister of Environment is correct. At present, Korea’s renewable energy ratio is below the OECD average. Even most of the components for that renewable energy are Chinese-made. To secure domestic technological capabilities, a great deal of R&D will be necessary.”
“...Even so, we cannot solve every problem with taxes. Are there no private companies willing to develop this kind of technology?”
“With all due respect, many have gone bankrupt.”
“Bankrupt?”
“Domestic companies have gone bankrupt in large numbers, pushed out by China’s low-price offensive and technological competitiveness. China’s global dominance is so unparalleled that even the companies that had been investing in this field are gradually decreasing.”
There was only one type of renewable energy domestic companies possessed. Ambiguous though it was, nuclear power...? But if they tried to build more of those, it was obvious just how fiercely the people would protest.
When the two men finished speaking, the conference room fell silent.
“I see. I understand. Let us think it over a little more and make a decision.”
After ending the Cabinet meeting like that.
Kim Sangcheol put a cigarette in his mouth and looked out the window.
“Prime Minister. What is your opinion? Is it right to replace the chairman of Korea Electric Power, or is it right to raise electricity rates?”
“I am someone who will follow whatever decision you make, Mr. President.”
“I won’t resent you, so speak honestly. What do you think, Prime Minister?”
Lee Chanho pondered for a moment, then spoke.
“The Ministry of Environment and the Ministry of Science do not appear to be wrong... It would be best to prepare a large budget.”
Kim Sangcheol looked up at the sky and smiled bitterly.
“This is truly nothing short of hell. We opened the rice market and lost all the Honam votes, and now we must turn even the metropolitan area into our enemy.”
“My apologies... Even so, history will recognize it.”
“What good is history recognizing it? When a president leaves office with a single-digit approval rating, everyone ends up in prison.”
“...”
“Prime Minister, speak frankly. Looking at our current dependence on coal energy, will we need additional nuclear power plants as well?”
Lee Chanho could not readily answer.
It was a question that depended on the people. Would our people think Chinese-made parts were better, or would they think building more nuclear power plants was better?
The sight of him hesitating was already answer enough. With an unbearably bitter expression, Kim Sangcheol stubbed out his cigarette.
“Why on earth... is nuclear power the only renewable-energy-related technology we have? Is energy independence impossible through solar and wind power?”
*
An age when anything you bought went up, an age when holding cash made you a fool... It was truly dazzling.
When the KOSPI, which had been hovering around 4,000, broke through 4,200, the pension fund’s risk management meeting was no longer a risk meeting.
“At this rate, I might as well just get rid of the risk management department. Only the assets we hedged are all losing money.”
“Hahaha.”
The Monday morning risk meeting bloomed with laughter at Manager Oh’s joke.
It was truly an era of peace and prosperity. Only the assets hedged for risk management purposes were showing blue, while everything else was in a blazing bull market.
“Domestic team, you report first.”
At Manager Oh’s instruction, the head of domestic investment rose from his seat.
“Yes. The third-quarter return tallied so far is roughly 30%. The most prominent sector is semiconductors. Thanks to the supercycle, not only the leading stocks but even the subcontractors supplying semiconductors have all risen. If classified by sector, semiconductors posted a return of roughly 80%, driving our returns the most.”
“What is the outlook going forward?”
“Based on the combined opinions of global rating agencies, this trend is expected to continue. Among overseas semiconductor companies, none appear capable of threatening our memory technology. In particular, by being selected as a core partner of OpenAI, we expect memory semiconductor supply volume to increase even further.”
“What is our internal opinion, aside from the global rating agencies?”
“Ours is not much different. According to our own survey, we forecast that Hoam·Seonggyeong Group’s sales next year will be an earnings surprise. However, even that figure does not include the supply volume for Stargate. We do not know how many orders OpenAI will place for our semiconductors, but when we synthesize various indicators, we estimate it will be a volume capable of driving sales up by as much as 50%.”
“Good. Next, overseas team.”
Amid the domestic team’s announcement of strong performance, the head of the overseas team stood up.
Well, even without listening, one could know the overseas team’s return. Wasn’t the trickle-down effect currently being enjoyed by the KOSPI only at the level of mist felt a hundred meters away from a waterfall?
The performance figures of the United States, which was directly making AI, were numbers far beyond reach, and many global rating agencies were already saying that market domination was nearing completion.
“...There is just one thing. Teslan has been bothering me lately.”
“Teslan? Why, did it fall?”
“It hasn’t fallen, but the future outlook. At present, BYD is continuing to enter markets aggressively, and Teslan’s position in electric vehicles is under considerable threat.”
“Hmm...”
“Opinions on this are divided even among global rating agencies. First, in terms of price, Teslan absolutely cannot beat BYD. Then the only thing left is overwhelming technological superiority... but questions are being raised as to whether Teslan can open up a technological gap large enough to match the price gap.”
“How do the other rating agencies see it?”
“For now, the prevailing outlook is still that Teslan will have the upper hand, but personally, I see it as fifty-fifty.”
Manager Oh raised his eyebrows.
“Why do you see it as fifty-fifty?”
“Twenty years ago, ten years ago, and now. The atmosphere surrounding the two companies has kept changing. Twenty years ago, they were not even subjects of comparison, and ten years ago people thought, ‘Surely not,’ but these days the mood is more like, ‘Wait a second?’ In particular, the atmosphere changed a great deal after the European market was overturned.”
Manager Oh looked at the report, then continued speaking.
“For now, let’s judge conservatively. Of course, Chinese electric vehicles do have a global market share in the 60% range, but it is hard to take that at face value. Isn’t most of the demand from the domestic market?”
“That is true. If you go by numbers alone, there are more people who speak Chinese than people who speak English.”
“Still, it is a good opinion. In any case, BYD will continue to threaten Teslan’s electric vehicle position based on its enormous domestic market, so let’s keep watching it.”
“Yes, understood.”
Manager Oh closed the documents and spoke.
“In the end, the key is the climate agreement. If Europe truly stops production of internal-combustion vehicles in 2035, it seems the electric vehicle market will be decided as well. What does everyone think? Besides that, are there any promising eco-friendly related businesses?”