[2022 election] On energy, markets and IT, devil for candidates is in the details
The two main presidential candidates — Lee Jae-myung from the ruling Democratic Party and Yoon Suk-yeol of the People Power Party — are in many ways the same but ultimately quite different.
They agree on the need to lower carbon emissions, with Lee being more aggressive.
On nuclear energy, Lee has eased up on his push for the complete phasing out of nuclear energy, while PPP's Yoon wants the plan pushed by the Moon government to be completely scrapped.
The DP candidate plans to continue with his predecessor's energy policy of achieving carbon neutrality through renewable energy and hydrogen while phasing out nuclear energy, but has moved up the Moon Jae-in government's target from 2050 to 2040.
He plans to cut carbon emissions by 50 percent of those emitted in 2018 by 2030. Moon's government road map targets a 40 percent cut.
Lee proposes creating an energy highway.
In December last year, Lee likened the energy highway to past government achievements that boosted Korea's economy, including Park Chung Hee's completion of the country's first expressway, between Seoul and Busan, and Kim Dae-jung's setting the stage for Korea's rapid IT development by installing high-speed internet cables throughout the country.
Lee said creating a smart-energy grid powered by renewable energy, including solar, wind and biomass, will speed up Korea's achievement of carbon neutrality but also allow those in rural areas to profit from the power generated through renewable energy generators installed in their backyards.
He also plans a carbon tax.
The PPP candidate agrees on the need for renewable energy, but raised the need to expand nuclear energy and plans to overturn the Moon administration's nuclear energy policy.
Yoon warns that the aggressive increase in renewable energy will only increase costs for Korean companies, and therefore cheap and clean nuclear energy and hydrogen should be maximized.
The candidate plans to further strengthen Korea's nuclear energy industry by reinforcing ties with the United States while creating an alliance for the building of nuclear reactors overseas.
Yoon plans to win a minimum of 10 nuclear reactor orders jointly with the United States in Eastern Europe and the Middle East by 2030. The PPP camp estimates the orders will help create 100,000 jobs.
The candidates agree that two nuclear reactors halted under the Moon administration should be completed.
On nuclear energy Lee, who was a strong supporter of Moon's policy of phasing out nuclear energy earlier, has taken a step back.
In December, he said his plan is not a complete scrapping of the power source but rather a cutback.
The DP candidate said reactors currently operating will continue to be utilized through their usable lives.
Though he still warns against the danger of nuclear power plants, saying it is more than simple fear related to Chernobly and Fukushima, he has opened the possibility of completing the construction of two new nuclear power plants — Shin-Hanul 1 and 2 — that have been halted under the Moon phaseout policy.
"Situation changes and policies and administrations have to respect the will of the people," Lee said addressing the issue in December.
Yoon is strongly pushing for restarting the construction of the two Shin-Hanul reactors, but he has no plans to construct additional nuclear power plants in Korea.
On Friday, during the second televised debate, Lee tried to question Yoon on his plan to build additional nuclear plants, which would be highly unpopular.
"I only said I would finish the nuclear plants that were to be constructed," Yoon said.
When Lee asked if he has previously announced the adding of four new nuclear reactors, Yoon denied ever saying so.
The two candidates are almost identical when it comes to promising to boost the equity and virtual asset markets.
This is especially so as both candidates are hoping to win the votes of young people, especially those in their 20s and 30s, which are considered as swing voters.
Since the pandemic, many young people have aggressively invested in stocks and cryptocurrencies with money plentiful and rates low.
The two are different in their approaches to boosting the stock market.
The ruling party champions plans to raise the prices of Korean stocks from being undervalued by tightening regulations against stock manipulation, while the opposition party candidate is aiming to lower taxes to draw in more retail investors.
Lee promised to raise the Kospi to 5,000 by improving the equity market so that Korean companies, which he claims are underappreciated, could receive the respect they deserve.
Citing his own experience in the stock market, Lee argues that illegal activities such as price manipulation have led to the undervaluing of Korean stocks. Large shareholders and management will be held accountable.
Cracking down and implementing stronger penalties will also increase tax revenue.
He plans to add tax benefits for those that hold onto their stocks for an extended period.
Lee argues that improving transparency and fairness in the equity market will automatically lead to the Kospi breaking 5,000.
He is also planning to strongly push to get Korean stocks included in the MSCI Developed Markets Indexes, which would boost Korea's profile among global investors.
PPP candidate Yoon promised to invigorate the equity market so that one out of every five Koreans will be investing in local stocks.
While Yoon like his opponent has promised to crack down on illegal stock manipulation, the PPP candidate strongly promotes eliminating the capital gains tax on stocks.
The capital gains tax only applies to shareholders owning more than 1 billion won of a single stock or 1 percent of a company.
Under the tax rules that go into effect starting 2023, a 20 percent capital gains tax will be charged on stock sales greater than 50 million won. For sales above 300 million, 25 percent will be charged.
On virtual assets, the two candidates are almost identical.
Lee proposed suspending taxes on cryptocurrency gains for a year and ultimately exempting taxation on up to 50 million won in gains.
While cautious, he is in favor of initial coin offerings that allow start-ups to raise money.
Yoon also proposes exempting taxes on up to 50 million won in gains while gradual approving initial coin offerings.
“Both candidates acknowledge virtual assets while opposing excessive taxation and promise to foster the industry soundly by strengthening the legal system,” said Lee Chang-young, Yuanta Securities analyst. "It is hard to deny virtual assets as an investment target considering that Upbit has 8.9 million investors."
Innovation and industries
The two candidates stress the need for innovation especially in the age of digital transformation.
While Lee wants to promote the digital industry with 135 trillion won of support, split between the national and local governments and private investors, the PPP candidate wants the private sector to lead.
Yoon emphasizes a limited government role so that companies would have the freedom to maximize their creativity and efficiency.
He also plans to invest heavily in training and hopes to develop 1 million digital experts.
"The industrial strategy needs to be reorganized to help our economy make a new leap and overcome low growth," Yoon said on Feb. 7 during an event at the Korea Chamber of Commerce and Industry.
"Free and innovative education and research as well as business management activities should be guaranteed," Yoon added.
While both candidates offer support for mobility and semiconductor businesses, neither has a grand plan for achieving their promises.
BY LEE HO-JEONG [email@example.com]