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Intelligence for Better Decision Making
| Domain | Causal Chain | Possible Outcome |
|---|---|---|
| Macroeconomics & Growth | (Semiconductor export boom ↑ → Terms-of-trade index ↑ → Current-account balance (% GDP) ↑ → Potential GDP growth revision ↑ → Real GDP growth ↑) | The enhanced terms of trade and external surpluses will underpin upward revisions to potential output and drive stronger real GDP growth. |
| Macroeconomics & Growth | (Memory chip price surge ↑ → Import-price pass-through ↑ → Headline CPI/Core CPI ↑ → Inflation volatility ↑ → Inflation-targeting credibility ↓) | Rising import-price pass-through and inflation volatility may erode confidence in the central bank’s ability to keep inflation near its 2 percent target. |
| Competitiveness | (Semiconductor export boom ↑ → Trade-openness & preferential access ↑ → Real export market-share change ↑ → High-value-added export share ↑ → Total-factor productivity level vs frontier ↑) | Greater preferential access and high-value trade gains will accelerate productivity convergence toward the global frontier. |
| Macroeconomics & Growth | (DRAM price surge–driven profits ↑ → Capital-formation rate ↑ → Business fixed-investment growth deviation ↑ → Private fixed-investment growth ↑ → Potential GDP growth revision ↑) | Surging profits will finance elevated business investment, prompting analysts to hike potential GDP growth estimates. |
| Macroeconomics & Growth | (Memory chip price surge ↑ → Global-value-chain reconfiguration velocity ↑ → FDI net inflow (% GDP) ↑ → Foreign-owned green-field project count ↑) | Accelerated value-chain shifts will draw substantial FDI and increase foreign-owned greenfield semiconductor projects. |
| Firms | (South Korean PPI inflation ↑ → Supply-chain restructuring cadence ↑ → Supplier-delivery-times index ↓ → End-to-end supply-chain lead-time deviation ↓ → Capacity-utilisation in manufacturing ↑) | Faster supply-chain restructuring and reduced lead-time variability will boost manufacturing capacity utilization. |
| Technology & Innovation | (Strategic-sector export risk ↑ → Dual-use export-control restrictiveness ↑ → Semiconductor fab utilisation rate ↓ → AI inference cost index shift ↑ → AI adoption GDP uplift ↓) | Tighter export controls will reduce fab utilization, raise AI inference costs, and dampen AI-driven GDP gains. |
Erudite Risk takes an all risks approach to intelligence reporting. We categorize key intelligence into one of 40 different risk intelligence categories.
The goal is to provide intelligence that allows decision makers to avoid being blindsided by what they may have missed, while informing them to make better decisions as well.
Erudite Risk also includes operations categories so you can monitor the environment for better decision making. Everything is tied together--what happens in risk affects operations and what happens in the market impacts risk profiles.
We categorize key intelligence into one of 30 different operations intelligence categories.
Different roles and functions within the organization can monitor different key issue areas. HR may monitor employment, wages, regulations, labor and management relations, etc., while P&L leaders may monitor overall developing trends.
U.S. expert proposes S. Korea, U.S., others form 'collective economic deterrence' pact against Chinese pressure
Yonhap | English | News | Jan. 23, 2026 | Shifting Geopolitical Alliances
Victor Cha, a U.S. expert and president of the Geopolitics and Foreign Policy Department at CSIS, proposed the creation of a "collective economic deterrence" pact involving South Korea, the United States, Japan, and other countries to counter China's economic pressure. This proposal comes amid concerns of possible Chinese retaliation toward South Korea following its nuclear-powered submarine project, which the U.S. has approved. The pact aims to collectively respond to any economic coercion by China, similar to the collective security principle of NATO’s Article 5, thereby deterring Chinese economic aggression rather than initiating a trade war.
Cha described China as an unreliable partner for South Korea, accusing Beijing of failing to curb North Korea's nuclear activities and ignoring UN sanctions. He emphasized that no single country in the region can effectively counter China alone, but collectively the countries possess enough leverage. The pact would treat coercion against one member as coercion against all, triggering automatic retaliation, which could impose real costs on Beijing and make it reconsider its pressure tactics.
South Korean President Lee Jae Myung has sought balanced relations with both China and the U.S., exemplified by his recent summit with Chinese President Xi Jinping. However, Cha believes this amicable approach is unlikely to withstand the fallout from the submarine deal, as China has historically retaliated against South Korea economically in response to geopolitical disputes. He called for stronger trilateral cooperation between South Korea, the U.S., and Japan, highlighting their substantial trade with China and leverage over key Chinese imports worth over $23 billion.
Cha urged the Trump administration, which holds the G7 presidency in 2027, to lead efforts in forming this economic deterrence pact and to avoid measures like tariffs on allies. He recommended that Trump explicitly oppose China's economic pressure tactics during his upcoming visit to Beijing in April to deter further coercion against allies, particularly South Korea, following the submarine project agreement.
(2nd LD) Homes, offices of 3 civilian suspects raided over alleged drone flights to N. Korea
Yonhap | English | News | Jan. 23, 2026 | North Korea
A joint team of police and military investigators in South Korea raided the homes and offices of three civilian suspects suspected of flying drones into North Korea, in violation of the Aviation Safety Act. The searches began at 8 a.m. on January 21, 2026, as part of an ongoing investigation into drone incursions reported by North Korea in September 2025 and January 4, 2026. South Korea's military denies involvement, stating it does not operate the drone models in question.
One suspect, a graduate student surnamed Oh in his 30s, publicly admitted to flying the drones in a media interview last Friday. He and another suspect, both alumni of the same Seoul university, previously worked at the presidential office under former President Yoon Suk Yeol and co-founded a drone manufacturing startup in 2024 with university support. Oh also operated two online news outlets focused on North Korea, which were shut down amid accusations that they served as fronts for military intelligence operations.
During the raid, investigators searched the university-based startup but did not search the news outlets' offices. The investigation remains ongoing, with authorities keeping all possibilities open. Meanwhile, North Korea claims to have forced one of the drones to fall using electronic means near its border city of Kaesong in late September 2025, escalating tensions between the two countries.
Cold Wave Peaks Today With -19°C Perceived
Chosun Ilbo | English | News | Jan. 23, 2026 | Extreme Weather Events
On January 22, the cold wave in South Korea is expected to peak, marking the coldest day of the winter so far, with Seoul experiencing a morning temperature of minus 13 degrees Celsius and a perceived temperature of minus 19 degrees Celsius. The Korea Meteorological Administration attributes this to a cut-off low-pressure system—a mass of Arctic cold air at minus 35 degrees Celsius—moving southward. Morning temperatures are forecasted between minus 19 and minus 5 degrees Celsius, with daytime highs ranging from minus 7 to 2 degrees Celsius. Strong winds will cause perceived temperatures to be 5 to 10 degrees lower than actual measurements.
Since January, cold waves with temperatures below minus 10 degrees Celsius have become more frequent in Seoul. On the 21st, the city's lowest temperature reached minus 12.2 degrees Celsius, with a perceived temperature of minus 17.9 degrees Celsius. Seoul has had five days this month with temperatures below minus 10 degrees Celsius, and the forecast predicts at least four more such days by the end of January, totaling nine days—roughly one cold wave every three days. Nationwide impacts include frozen seawater observed at Dadaepo Beach in Busan.
Despite global warming leading to milder winters over the past five years, this January has seen an intensification of cold waves due to frequent cut-off low-pressure systems. The weakening jet stream, influenced by global warming, allows Arctic cold air to escape more often. Unlike typical winters dominated by Siberian high-pressure systems at around minus 15 degrees Celsius, this winter has seen more frequent exposure to colder air masses near minus 35 degrees Celsius. Additionally, an unusual persistent high-pressure system east of Korea since January 20 has sustained cold northwesterly winds, prolonging the cold wave. This high-pressure "wall" is expected to maintain the cold conditions for about six days until the weekend.
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