Politics in North Asia

Republic of Korea President Lee Jae Myung may have won the election, but he is already proposing a change to the constitution to allow him to run for the top job up to four times (20 years).

Lee is offering to cancel the debt of self-employed people under six core line items from COVID19 to bad debt accumulation. Local sources tell me that over 1.1 million Koreans will be eligible to have A$50,000 of debt wiped clean off their slate.

In Japan, Tokyo Governor Koike has won a larger mandate in the Tokyo Metropolitan Assembly. She still has a coalition to get to that majority but support in local elections support her policy positions.

Japanese PM Ishiba has not been able to strike a deal with the US to get tariffs on autos lowered but expect that commitments to new LNG projects in Louisiana, Texas and Alaska to change this.

Politics in NSW

The NSW Government has established the Investment Delivery Authority (IDA). While it is important to prioritise large scale projects to expedite processes, the most important mark of success is which department will be originating the business for the IDA to execute.

For NSW to attract more business to the Hunter, they should be working with their commonwealth colleagues to turn it into a free economic zone. The Hunter is one of the few areas in Australia that can attract large investors to transact. Too often, special activation precincts (SAPs) are in areas which don’t carry enough commercially viable impact to be successful. In the Hunter, it is a no brainer. The assets are good to go. This is a narrative that would help Japanese and Koreans commit serious capital. Once the investment has been made, they will be committed for decades.

Thematics

AI is all the rage. Like most sectors with euphoria, the wheat will be sorted from the chaff. There are 70,000 AI companies in existence. Most will not make it. Like currencies, there are around 200 in existence. Yet only 6 trade in any real volume – USD, GBP, EUR, AUD, JPY, CND and CHF. Try get a good rate out of your Travelex booth for Malaysian ringgit. There is not enough liquidity to offer a tight spread. Crypto is the same. There are 3000+ cryptocurrencies, but only 3 trade any volume – bitcoin, Ethereum or Tether (Stablecoin). So AI will be dominated by a few with a lot of wannabes who will invariably get artificially boosted with the tide but be left unable to deliver to the market.

Japan and Korea are keen to use nuclear power to be part of the marketplace.

Japan

A visit to Kyushu Electric this month showed the company is keen to explore SMR technology. It believes that Japanese companies have an ability to play in the supply chain.

The MoU between NSW Government & Urban Renaissance (UR) was signed on the recent trade mission. The details are yet to be ironed out but UR is looking to expand its operations outside of any partnerships on social housing.

Japanese companies continue to seek opportunities abroad to offset the declining birth rate. Note that Horiba, a leader in emissions testing equipment, will be visiting the Hunter in July to explore partnerships and collaboration opportunities.

Korea

Korean market is still assessing which way President Lee will go. Note he has a pending court case on June 28th which, if he loses, Korea will be back to the polls in another 60 days.

Hyundai Engineering (HEC) is looking to set up in NSW (probably North Sydney) during the year. The focus is on getting involved with renewables project. Note that HEC is not Hyundai E&C (HDEC) which is already here and involved in the same space. Same group but playing in the same sandpit as competitors.