South Korean Leader Gets Much-Needed Boost With New Party Boss

(Bloomberg) -- South Korea’s ruling party elected as its new leader a candidate backed by President Yoon Suk Yeol, who is trying to implement a historic deal to mend ties with Japan and win concessions from the US over export curbs that could hurt his country’s chipmakers.

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The conservative People Power Party selected Kim Gi-hyeon, a four-term lawmaker, as its new leader in a vote late Wednesday. Kim was considered Yoon’s preferred candidate. The move could help the president, a prosecutor-turned-politician, better control the party he only joined a few months before the launch of his run for the country’s top office.

Yoon became president in May 2022 and is heading for one of the most crucial junctures of his single, five-year term, with tests coming on the domestic and diplomatic fronts.

Yoon’s office said he will visit Japan on March 16 and 17. The trip would be the first to the neighbor by a South Korean president since 2019 and he’s expected to discuss a deal backed by his administration to settle a feud stemming from Japan’s 1910-1945 colonial rule over the Korean Peninsula that has disrupted issues including trade and security.

Next month, the South Korean leader will visit President Joe Biden at the White House where talks are expected to discuss sweeping US export controls unveiled in October that prevent chipmakers from sending advanced equipment to facilities in China.

Without a license extension, it is unclear how South Korean giants Samsung Electronics Co. and SK Hynix Inc. would proceed in the world’s No. 2 economy. Both firms depend on China as a key market and a manufacturing site for their memory chips.

Yoon stumbled early in his presidency, but has seen his support numbers pick up in recent months to 36% last Friday in a weekly tracking poll from Gallup Korea. The support rate will be closely watched as the PPP tries to win back control of parliament in elections next year, with a number above 40% considered a safe level and a slip below 30% considered dangerous.

“Maintaining the president’s approval rating is a crucial responsibility for both the presidential office and the ruling PPP, particularly with the upcoming general election next year,” said Shin Yul, a political science professor at Myongji University in Seoul.

Shin added that the new PPP leadership is also likely to focus on “collaborating with Yoon’s office to influence public opinion regarding his efforts to adjust the US Chips Act, which will ultimately have an impact on his approval rating.”

The legislation approved last year dedicates about $50 billion to expand America’s semiconductor industry. It includes incentives for foreign chipmakers to set up factories within the US, causing concern in South Korea.

Other South Korean leaders have seen their support rate plummet after trying to repair ties with Japan. While the progressive bloc is facing its own internal struggles, the dominant Democratic Party has been using the deal Yoon struck with Tokyo as a cudgel, labeling it a “day of shame” and accusing Yoon of “subservience to Japan.”

Under Yoon’s plan, South Korean companies, rather than Japanese ones, would finance a foundation to pay Koreans who were conscripted to work in the mines and factories that powered Japan during colonial rule.

Those tapped to pay would include firms that benefited from funds transferred under a 1965 treaty intended to resolve forced labor issues and wartime disputes between Japan and South Korea, such as Posco Holdings Inc.

The deal drew praise from Biden as he seeks to convince the two US allies to help counter growing Chinese influence in Asia and present a united front to deter North Korea as it advances its nuclear arms program.

The new PPP leader welcomed the praise that the deal with Japan has received in Washington.

“We cannot change the past, but we can change the future,” Kim told reporters Thursday. “Although Japan’s apologies and its self-reflection on the pain and suffering that it caused us is not enough, we must write a new chapter in our future South Korea-Japan relations for future generations.”

--With assistance from Francesca Stevens.

(Updates with Yoon’s visit to Japan.)

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