Summary of Key Points
South Korean President Lee Jae-myeong’s approval ratings have hit a new low (45.9%), with dissatisfaction exceeding 50% for the first time. However, the support rate for his party, the Democratic Party, has increased, indicating that the public has not turned to the conservative opposition parties. The main reasons include the recent sharp decline in the stock market (leverage ETFs have amplified risks, causing significant losses for individual investors), dissatisfaction with real estate regulations, and unresolved cases of fraud in local elections. In the future, Lee will also need to address long-term challenges such as semiconductor geopolitics, the balance between conglomerates and public welfare, and an aging population.
1. Personal Support Rates Drop, but Party Support Rises: The Reason Behind This Contradiction
Lee Jae-myeong’s personal support ratings have declined for three consecutive months, while the Democratic Party’s support rating has increased by 3.8 percentage points (to 45.1%). The largest opposition party, the National Power Party, has seen its support rating drop by 2.9 percentage points (to 37.7%). This suggests that the public is not disappointed with the “progressive” ideology but rather holds Lee Jae-myeong personally accountable for failing to manage key livelihood issues such as the stock market and real estate. Nevertheless, the overall stance of the Democratic Party (for example, its opposition to conservatives) still aligns with the majority’s expectations, so voters have not switched parties. In other words, people are criticizing the president but remain loyal to their party.
2. The Stock Market “Carnival” Harms Retail Investors, and Lee Jae-myeong Becomes the Scapegoat
During his campaign, Lee promised to boost the stock market from around 2000 points to 5000 points; chip stocks later drove the KOSPI index to nearly 9000 points, boosting his approval ratings to near 70%. However, the market plummeted in June, and since July, the market value has evaporated by 2116 trillion Korean won (roughly equivalent to last year’s GDP), representing a 30% drop from its peak. The key factor was the introduction of “leverage ETFs” at the end of May, which allowed retail investors to borrow twice their capital to trade stocks, leading to both substantial gains and losses. Many people mortgaged their homes or borrowed money to invest, only for more than 300,000 accounts to be forcibly liquidated during the crash (resulting in losses that forced them to sell stocks to repay debts). The public blames the government: “If we knew leverage was so risky, why wasn’t it regulated earlier? The remedial measures came too late!” Lee Jae-myeong’s previous promises about a booming stock market have now been shattered, making him the target of public anger.
3. Real Estate Regulations Backfire: Tax Increases Offend Everyone
Housing has always been a sensitive issue for Korean governments. When the stock market was rising this year, many people used their profits from trading to buy property, driving up housing prices in Seoul even further. The Lee Jae-myeong administration proposed raising the “property holding tax” to curb price increases, but this move has angered various groups:
- Young people: With already high housing costs, will the tax be passed on to tenants?
- Homeowners: Most of their wealth is tied to their homes; higher taxes mean a direct financial hit.
- People with multiple properties: They oppose the tax even more, fearing increased costs.
This failed attempt to control housing prices has led to a significant drop in support ratings.
4. Unresolved Local Election Fraud Cases Add to Pressure on the Government
Earlier this year, fraud involving missing ballots was discovered in conservative-controlled areas during local elections. Although the head of the election committee resigned and Lee Jae-myeong ordered a thorough investigation, the opposition parties are still demanding the establishment of a special prosecutor’s team. The public believes the government is failing to ensure electoral fairness, which has further eroded his credibility.
5. A Host of Future Challenges: Semiconductors, Conglomerates, and Aging – None Are Easy to Handle
Short-term problems (stock market and real estate) remain unresolved, and medium-term challenges are even more daunting:
- Semiconductor geopolitics: Korean chip companies (Samsung, SK Hynix) are caught between the U.S. and China; they need to maintain markets in both countries without offending China.
- The balance between conglomerates and public welfare: Conglomerates profit heavily, but ordinary citizens do not benefit; how can this imbalance be addressed?
- Long-term issues: Severe aging (decreasing labor force), a single-dominated economy (over-reliance on chips), and political polarization (constant conflicts between progressives and conservatives) are all pressing challenges during Lee Jae-myeong’s tenure.
In summary, Lee Jae-myeong’s “honeymoon period” ended with the stock market boom, and he now faces both domestic and external pressures. Domestic issues (stock market and real estate) have sparked public dissatisfaction, while externally, he must navigate complex geopolitical tensions. To stabilize his support ratings, he needs to first sort out these immediate crises.