TITLE: Chapter 379
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After Professor Petrov's research team successfully conducted the TWR experiment, Russia actively promoted it, drawing in partner nations. Their ulterior motive was to dominate the future nuclear power and energy markets using TWR as a weapon. Japan was the nation that responded most enthusiastically.
After the Fukushima disaster, Japan had shut down all its operating nuclear power plants and pursued a nuclear phase-out. However, since Prime Minister Okazaki took office, the country reversed its stance, restarting plants and planning new constructions. While this was framed as a pragmatic necessity, the Japanese public's fear and anxiety regarding nuclear power persisted, and public opposition remained substantial. In this context, if they could build safer and more efficient nuclear plants than existing ones, there was no reason to refuse.
Japan quickly joined the TWR camp, calculating that even if they had to purchase the core technology, Japanese companies would handle the construction and operation of the plants. Given Japan's advanced nuclear technology, Russia readily welcomed them as a key partner. However, Russia suddenly and unilaterally informed Japan that it would sever ties with Japanese nuclear companies.
Japanese officials protested vehemently.
“This is a breach of contract!”
Trusova, the president of Rosatom, blamed it all on Kang Jin-hoo.
“Since CEO Kang Jin-hoo is against it, there's nothing we can do.”
“But doesn't OTK Company only hold a 36 percent stake? You said all decisions are made by the Russian government and Rosatom, didn't you?”
“I'm not sure about that. We're in a difficult position ourselves.”
Excluding Japanese companies was a blow to Russia as well, as it meant giving up a golden opportunity to enter Japan's nuclear power market. However, while both sides would regret it, it was clear which one stood to lose more.
“Then, please, try to persuade him from your end.”
“We'd like to, but domestic public opinion isn't favorable right now due to a recent incident.”
“A recent incident?”
“Didn't one of your politicians declare war on Russia?”
“Declare war? What are you talking about...?”
“In any case, CEO Kang Jin-hoo says no, so what can we do? As you know, severing ties with Japan is a loss for us too.”
President Trusova said, as if delivering an ultimatum,
“If you want to argue, take it up with CEO Kang Jin-hoo, not us.”
***
As if by design, Russian media outlets began to intensively report on a remark made last month by a member of Japan's House of Representatives: “We must reclaim the Northern Four Islands, even if it means war.” President Vysotsky labeled this a provocation, and anti-Japanese sentiment surged within Russia.
Japan was utterly bewildered. At the time of the remark, Japan's swift apology had seemingly smoothed things over, but now Russia was suddenly re-escalating the issue. Moreover, Russia didn't stop at mere verbal threats. They announced concrete plans to reinforce military presence on the Northern Four Islands, which Japan claims, and to suspend visa-free entry for Japanese nationals. Thanks to this strong stance on the territorial dispute, President Vysotsky's domestic approval ratings soared.
With the suspension of TWR cooperation and the renewed focus on the Diet member's war declaration, signs pointed to deteriorating Japan-Russia relations, prompting even the Japanese Foreign Minister to intervene.
Foreign Minister Okamoto met with his Russian counterpart.
“We've apologized multiple times, and didn't the Diet member in question resign from his post?”
Foreign Minister Pimenov shook his head.
“That's not enough. We need a direct apology from the Japanese Prime Minister and a promise that this won't happen again.”
“As you know, the Japanese government's fundamental position is that the Northern Four Islands are Japanese territory.”
This latest outrageous remark also stemmed from defending that stance. If the Prime Minister were to apologize, it could be misconstrued as Japan relinquishing its territorial claim, making it a practical impossibility.
“Just like the Republic of Karelia, the Kuril Islands are Russian territory.”
The Karelia region, originally Finnish territory, was ceded to the Soviet Union after the Winter War. Just as it remains an autonomous republic within Russia today, the implication is that the Kuril Islands, which Russia occupied after its victory in World War II, are also Russian land.
“How can you possibly do this?”
“When circumstances change, actions inevitably follow.”
Previously, Japan had used economic aid and cooperation as leverage to exert influence over Russia. For Russia, hemmed in by Western sanctions, Japanese capital had been like welcome rain in a drought. However, thanks to the TWR development, Russia now held a significant bargaining chip and was actively seeking foreign investment, leveraging OTK Company's market entry. In this new landscape, Japan's economic influence was inevitably diminishing.
Foreign Minister Okamoto recalled the young Korean man he had briefly met. It was the first time he had experienced such humiliation since becoming the Foreign Minister, responsible for Japan's diplomacy.
“Is this also related to CEO Kang Jin-hoo, by any chance?”
Foreign Minister Pimenov neither confirmed nor denied it.
“We expect a sincere response from Japan.”
***
Kang Jin-hoo's pronouncements were becoming reality, one after another.
Following the embargo on OTK batteries to Japan, news spread that Japanese companies were also being excluded from TWR construction. It was an incredible series of events to be orchestrated by a single individual.
After the electronics and nuclear power industries, the automotive sector was also thrown into crisis, as the OTK battery embargo extended to Japanese automakers. Japanese cars were known for their excellent performance, durability, and reasonable prices. They were also considered leaders in the fields of future mobility and eco-friendly vehicles. Toyota's globally successful Prius hybrid and Nissan's Leaf electric vehicle were prime examples.
However, that was years ago. The Japanese auto industry seemed unable to keep pace with recent transformations in the automotive sector. While the development of OTK batteries allowed electric vehicles to break the 1,000-kilometer range barrier, Japanese EVs were still stuck at around 300 kilometers.
To address this, the Japanese government brought together automotive, electronics, and battery companies to form an 'Auto Alliance,' aiming for technology standardization and joint development. However, autonomous driving technology saw little progress, and the market share of Japanese batteries continued to decline daily. Toyota, which should have been leading the charge, was embroiled in internal disputes over management control following the Nishida Securities trading error incident, and Zhou Auto was attempting to dominate Toyota's Chinese operations.
While the Japanese auto industry idled, CarOS formed technology partnerships with GM, Ford, and Eunsung Motors, flooding the market with autonomous electric vehicles. A growing sense of crisis, fearing isolation in the global market, led some companies to show signs of defecting from the Auto Alliance and pursuing independent strategies.
Just then, CL Chemical and SSK Innovation began producing automotive-grade OTK batteries. In internal combustion engine vehicles, the engine is paramount. In electric vehicles, however, the battery, not motor performance, is the most crucial component. Thus, OTK batteries were essential for creating globally competitive EVs. Honda and Nissan, among others, had been in contact to place volume orders, but negotiations came to a complete halt at Kang Jin-hoo's word.
The damage wasn't limited to finished vehicle manufacturers. Japanese auto parts manufacturers are globally recognized for their technological prowess, and their components are exported worldwide, including to South Korea and the United States. However, rumors began circulating in the industry that automakers heavily reliant on Japanese parts suppliers would be excluded from the OTK battery supply list. Kang Jin-hoo hadn't said anything directly, and it was unclear if the rumors were true, but automakers reacted with alarm.
For Japanese parts suppliers, who had been expanding exports thanks to the weak yen, it was a bolt from the blue. The damage quickly rippled throughout the entire Japanese automotive industry. The stock prices of automakers like Toyota and Honda plummeted, and parts suppliers reeled from the impact.
***
Taekgyu muttered, arms crossed.
“Japan had a fine plan, didn't they? Right up until Kang Jin-hoo delivered his blows.”
When Prime Minister Okazaki first mentioned sanctions, few people thought the situation would drag on. They expected South Korea to back down and compromise at some reasonable point.
But that was assuming I wouldn't get involved.
In a power game between Japan and South Korea, Japan naturally has the upper hand. But what about a showdown between Japan and OTK Company? Even if OTK Company is valued at over $1 trillion, Japan is the world's third-largest economy with an annual GDP exceeding $4 trillion. If you converted that to a corporate valuation, wouldn't it be over $40 trillion?
But there's one crucial difference between us: I don't have to answer to shareholders, while a government must answer to its people.
Prime Minister Okazaki and the LDP are already struggling with falling approval ratings after the Nishida Securities incident. That's why they resorted to the desperate measure of trade sanctions in response to my counterattack.
Once the damage to Japan starts to materialize, their approval ratings will plummet further. Of course, we'll take a hit too.
But there are plenty of other markets in the world besides Japan.
“We need to expand trade with Europe, if only for the sake of diversifying our exports and imports.”
Well, it's not exactly my original idea; it's been pointed out for a long time. It's just that no one acted on it.
So, I decided to take this opportunity to do it myself.
“I'm heading to Germany first. Keep an eye on things at the company.”
“Bring me back a souvenir.”
When we announced our visit, they expressed their welcome.
OTK Company's private jet, along with others carrying South Korean business leaders, took off for Europe.
***
Japan watched South Korea's moves with heightened attention.
When the Liberty Korea Party criticized the government and the South Korean government remained silent, Japan thought things were going according to plan. But when Kang Jin-hoo stepped in, things began to unravel completely.
First, Kang Jin-hoo united the business leaders. Then, within hours, he announced a strategy: long-term technology development and short-term expansion of trade with Europe. He also restricted OTK battery exports and TWR participation, effectively launching a counter-offensive against Japan.
The Japanese government was caught off guard by these moves. They had assumed that if Japanese companies halted the supply of materials and components, the South Korean economy would falter. Instead, Japan now faced the prospect of suffering even greater damage.
Kang Jin-hoo played the cards he held and reached out to Europe. News of his impending visit sent ripples of excitement through Europe. German Chancellor Meissner canceled domestic appointments and rushed to prepare for the arrival of the South Korean business delegation, while leaders from neighboring countries considered trips to Germany. Stronger economic cooperation between South Korea and Europe now seemed inevitable. South Korea would increase imports of European materials and components, while Europe would expand imports of South Korean finished goods.
Once supply chains are rerouted, it's difficult to revert them even if sanctions are later lifted.
Furthermore, South Korea and Japan have considerable overlap in their export items, such as home appliances and automobiles. If South Korea increased its exports to the EU, who would suffer the most?
As the situation unfolded, voices of discontent erupted from Japanese businesses.
“What on earth is Prime Minister Okazaki thinking? Or is he thinking at all?”
“The U.S. sanctioned China because it has a trade deficit of over $400 billion. But Japan has a ¥3 trillion surplus with South Korea! Where else do you see a country with a trade surplus sanctioning a country it runs a deficit with? It's idiotic!”
“At this rate, Japanese cars will be completely isolated in the global market.”
“If South Korean companies switch their component supply chains to Europe, what good will lifting sanctions later do?”
“Why drag political issues into economic matters?”
“Has the Japanese government learned nothing, even after losing over ¥2 trillion?”
With Japan's economic damage becoming a reality, countermeasures were urgently needed. The Japan Innovation Party argued for further sanctions, but even within the LDP, voices emerged suggesting they should immediately lift the sanctions and enter negotiations with South Korea.
However, if Japan backed down now, it would become a global laughingstock. They needed some pretext to change their stance. There was no chance Kang Jin-hoo would back down now. All that remained was the South Korean government's response. If the other side extended an olive branch first, Japan could use that as an opportunity to naturally enter into dialogue.
However...
The South Korean government, as previously announced, proceeded with the seizure of Nippon Steel's assets in South Korea in relation to the forced labor compensation ruling.
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