S. Korea’s new economic playbook: Stimulus, strategy, and global stakes

Welcome to Within The Frame, where we bring the most pressing issues across the globe into focus. I'm Kim Mok-yeon.

The inauguration of President Lee Jae-myung marks a sharp pivot in Korea's economic direction.

With the economy stalled by weak consumption, global uncertainty, and looming tariff deadlines with the Trump administration, Lee has made household recovery his top priority, launching an emergency task force and fast-tracking a 35 trillion won stimulus to revive local demand.

But this isn't just stopgap spending.

His strategy signals a long-term shift to government-led growth, with heavy investment in semiconductors, 반도체, AI, green energy, and defense—paired with sweeping labor reforms. All this, as the clock ticks toward a July 8th deadline to renegotiate U.S. tariffs.

The next few months will test whether urgency, ambition, and execution can align.

For more on this, we connect to Song Soo-young, Professor of Business and Economics at Chung-Ang University. Welcome.

Also joining us is Chai Sangmi, Professor of Business Administration at Ewha Womans University. Good to see you.

(SONG) 1. Let's start with the stimulus, Prof. Song. Is this 35 trillion won supplementary budget enough—and well-targeted—for immediate recovery?

(CHAI) 2. Assuming the spending moves quickly, Prof. Chai, what are the fiscal or inflationary risks policymakers should be watching?

(SONG) 3. President Lee's vision shifts away from the previous administration's market-driven growth to state-led investment. Prof. Song, is that pivot viable in Korea's current economic structure?

(CHAI) 4. Under Lee's policies, public money is to be funneled into strategic sectors like semiconductors and AI. Can this narrow targeting really drive broad-based growth, Prof. Chai?

(SONG) 5. The administration is pairing investment with labor-friendly reforms—stronger unions, shorter hours, and extended retirement. Prof. Song, will this help enhance or hinder productivity?

(CHAI) 6. Some say the government is prioritizing equity over efficiency. Prof. Chai, what are your thoughts? How do we weigh fairness against competitiveness in a low-growth era?

(SONG) 7. One of the most anticipated tasks left for the Lee administration is tariff negotiations with the Trump administration. Prof. Song, at this point, how much leverage does Korea actually have in this compressed timeline?

(CHAI) 8. Staying with trade, balancing U.S. trade demands with domestic politics—especially over beef, GMOs, and data exports—seems precarious. What could be a smart middle ground, Prof. Chai?

(CHAI) 9. Professor, let's also touch upon President Lee's 335 vision: 3% growth, AI leadership, G5 entry—how realistic is this? And what factors will make or break it?

(SONG) 10. Finally, we're expecting a Cabinet shift with the new government. Prof. Song, what would you prioritize if you were advising the new economic team?