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South Korea’s new leftwing president Lee Jae-myung promised to “build a new nation of hope” as he was sworn into office on Wednesday after an emphatic election win.
Lee acknowledged in an inaugural address in Seoul that Asia’s fourth-largest economy faced a “tangled web of overlapping crises across diplomacy, national security, and democracy”.
He vowed to overhaul what he said was an outdated model of economic development, which he blamed for fuelling inequality and hindering growth.
South Korea’s economy is under pressure from US President Donald Trump’s aggressive trade policies and intensifying competition from Chinese exporters.
Lee promised to respond to “nuclear and military provocations” by North Korea, the country’s heavily armed neighbour.
“We will keep communication channels open with the North and build peace on the Korean peninsula through dialogue and co-operation,” Lee said. “It is better to win without fighting than to win through conflict, and the most reliable security is peace that makes fighting unnecessary.”
The country has suffered a prolonged political crisis triggered by then-president Yoon Suk Yeol’s brief declaration of martial law in December.
Lee has described his conservative predecessor’s foreign policy towards China and Russia as “unnecessarily hostile”.
Lee will be expected to negotiate a tariff deal with the US president while he pursues “pragmatic diplomacy” with Beijing at a time of intensifying US-China rivalry.
The Bank of Korea last week slashed its growth forecast for this year from 1.5 per cent to 0.8 per cent, after the economy contracted slightly in the first quarter amid a sharp slowdown in exports.
Lee’s win puts both the presidency and the national assembly in the hands of leftwing parties after several years of divided government.
South Korea’s benchmark Kospi share index rose by more than 2.4 per cent in morning trading. Investors anticipate that Lee will bring in governance reforms to strengthen the hand of minority shareholders, loosening the grip of the families that control the country’s biggest industrial groups.
