Korea Digest No. 30 December 2025

 

KOREA DIGEST

 

Korea Digest is a monthly publication of the Korea Centre, School of International Relations and Politics, Mahatma Gandhi University, that compiles major political, security, economic and diplomatic developments in the Korean Peninsula. Korea Digest aims to track, highlight and provide brief analysis of important developments in the Korean Peninsula.

 

Korea Digest No. 30 December 2025

Contents

1. Korea Strengthens Economic and Diplomatic Ties Through Serbia and Iran Engagements
2. Korea–U.S. Alliance Enters New Phase With Nuclear, Security and Policy Coordination
3. Korea’s 2026 Budget Passed in Rare Bipartisan Deal, Expanding Spending on Peace, Culture and Growth
4. Lee Rules Out Nuclear Armament, Reaffirms NPT Commitments Amid Nuclear Energy Expansion
5. Korea Marks One Year Since Martial Law as Lee Hails ‘Revolution of Light’ and Pushes Democratic, Military Reforms
6. U.S. Security Strategy Shifts Burden to Allies, Sidelines North Korea as Focus Moves to China and Taiwan
7. Lee, Takaichi Plan Nara Summit as Japan’s Nuclear Debate Draws North Korean Criticism
8. U.S., Korea Launch ‘Pax Silica’ Tech Coalition as Allies Recalibrate North Korea Policy
9. Kim Jong-un Signals Policy Direction at Party Plenum, Marks Constitution Day
10. UNC Reaffirms Control Over Inter-Korean Border as Seoul Advances Nuclear Talks with U.S.
11. Seoul, Moscow Hold Quiet Talks on North Korea’s Nuclear Program
12. President Lee to Make First State Visit to China in Nine Years
13. Korea Concludes Two-Year Term on UN Security Council

Prepared by

Gourilakshmi S, Project Fellow, Korea Centre

1.Korea Strengthens Economic and Diplomatic Ties Through Serbia and Iran Engagements

South Korea has stepped up its international economic and diplomatic outreach with the launch of comprehensive trade negotiations with Serbia and the holding of working-level policy talks with Iran. The developments reflect Seoul’s broader effort to diversify partnerships and strengthen cooperation amid ongoing global economic and geopolitical uncertainties.

Korea and Serbia have initiated official negotiations for a Comprehensive Economic Partnership Agreement (CEPA), with the first round of talks taking place in Seoul. Discussions cover ten key sectors, including tariff concessions, customs procedures, and economic cooperation. The Korean government views Serbia as a strategic hub connecting European Union–adjacent markets and the Balkan region, particularly important for Korean firms in the electric vehicle, battery, and renewable energy sectors. Officials noted that the agreement could enhance market access while reducing supply-chain risks.

Meanwhile, Korea and Iran held working-level policy talks in Tehran aimed at advancing bilateral cooperation following a period of strained relations. The discussions focused on practical cooperation in administration, culture, and education, as well as exchanges on regional and international issues, including developments on the Korean Peninsula and the Middle East. The talks come as relations continue to recover after the lifting of the freeze on Iranian assets in 2023. Korean officials also requested continued cooperation to ensure the safety of Korean nationals in Iran.

 

2. Korea–U.S. Alliance Enters New Phase With Nuclear, Security and Policy Coordination

South Korea and the United States have agreed to strengthen coordination across nuclear cooperation, defense, and alliance management, signaling a deepening of strategic ties following recent presidential-level engagements. Senior officials from both sides have moved to operationalize commitments outlined in the joint fact sheet released after the leaders’ summit.Korea and the U.S. agreed to swiftly launch multiple working-level consultative bodies to ensure effective follow-up in key areas, including nuclear energy, shipbuilding, and nuclear-propelled submarines. Seoul emphasized early consultations on civilian uranium enrichment and spent nuclear fuel reprocessing, while Washington pledged continued close communication. The two sides also discussed reducing tariffs, improving visa procedures for Korean businesses, and facilitating smoother travel for Korean technical personnel.

The discussions gained added attention after President Lee Jae Myung disclosed that U.S. President Donald Trump had proposed a possible “50–50 partnership” on enriched uranium production during their October summit. While Seoul clarified that no further discussions have taken place, the remarks highlighted ongoing debate over expanding Korea–U.S. nuclear cooperation under existing frameworks.

At the same time, Seoul pushed back against U.S. suggestions that Korea’s pursuit of nuclear-propelled submarines reflects a broader effort to counter China, stressing that the initiative is driven by security conditions on the Korean Peninsula and does not target any specific country. The developments unfolded amid wider alliance discussions on regional security and renewed calls by experts for more realistic approaches toward North Korea, including arms-control-focused dialogue alongside long-term denuclearization goals.

 

3.Korea’s 2026 Budget Passed in Rare Bipartisan Deal, Expanding Spending on Peace, Culture and Growth

South Korea’s National Assembly approved a 727.9 trillion won ($496 billion) budget for 2026 in an 11th-hour bipartisan agreement, meeting the legal deadline for the first time in five years. The budget, the first under the Lee Jae Myung administration, represents an 8.1 percent increase from the previous year’s allocation and was passed with 248 votes in favor, eight against, and six abstentions.

The ruling Democratic Party and opposition People Power Party agreed to trim 4.3 trillion won from the original proposal, largely from AI projects and policy funds, while reallocating 4.2 trillion won to other areas leaving the final total just 100 billion won below the government’s initial 728 trillion won plan. As part of the compromise, the Assembly approved a uniform 1-percentage-point increase in corporate tax rates across all income brackets starting in 2026.

A notable feature of the budget is the restoration of funding for inter-Korean cooperation. The Ministry of Unification received 1.24 trillion won, a 20.9 percent increase from this year, with over 1 trillion won allocated to the inter-Korean cooperation fund for the first time in three years. The budget also includes 12.3 billion won for a new “center for peaceful coexistence” and 480 million won for developing a tourism zone along the demilitarized zone.

Cultural and tourism spending also saw major gains. The Culture Ministry’s budget rose to 7.86 trillion won, an 11.2 percent increase, including 1.62 trillion won for content industries up 27 percent year on year. The government expanded the K-Content Fund to 430 billion won, increased tourism support to 1.48 trillion won, and allocated 1.7 trillion won for sports-related programs, underscoring its push to turn K-culture into a strategic growth industry.

 

4.Lee Rules Out Nuclear Armament, Reaffirms NPT Commitments Amid Nuclear Energy Expansion

President Lee Jae Myung has firmly rejected calls for South Korea to pursue its own nuclear weapons, stating that nuclear armament would be “impossible” due to inevitable international opposition and sanctions. Speaking during a Cabinet meeting, Lee warned that abandoning nonproliferation norms would isolate Korea diplomatically and economically, describing such a move as incompatible with approval from the United States or the broader international community.Lee emphasized that domestic debates over nuclear armament risk undermining Seoul’s ongoing efforts to secure expanded civilian nuclear capabilities, including uranium enrichment and spent fuel reprocessing for peaceful use. He noted that concerns over weaponization particularly within parts of the U.S. policy community have slowed progress on these issues. Foreign Minister Cho Hyun echoed the stance, warning that withdrawal from the Nuclear Non-Proliferation Treaty (NPT) would place Korea in a position comparable to North Korea.

Reinforcing this position, the government reaffirmed its full commitment to NPT obligations during a high-level policy meeting with the International Atomic Energy Agency (IAEA). Seoul pledged transparent cooperation with IAEA safeguards as it advances plans to build nuclear-powered submarines and expand civilian nuclear fuel-cycle rights. The IAEA welcomed Korea’s assurances and agreed to maintain close consultations, including on preparedness for future verification of North Korea’s nuclear program.The government’s stance underscores Seoul’s strategy of strengthening nuclear energy and defense capabilities within the existing nonproliferation framework, while ruling out any move toward independent nuclear armament.

 

5.Korea Marks One Year Since Martial Law as Lee Hails ‘Revolution of Light’ and Pushes Democratic, Military Reforms

South Korea marked the first anniversary of the failed Dec. 3, 2024 martial law attempt with President Lee Jae Myung praising citizens for peacefully defending democracy and announcing sweeping steps to institutionalize popular sovereignty, while the government simultaneously moved to rebuild public trust in the military.

In a nationally televised address from the Yongsan presidential office, Lee said the Korean people were “fully qualified” to receive the Nobel Peace Prize for blocking what he described as the first attempted coup in a 21st-century democratic state to be defeated peacefully by unarmed citizens. The emergency martial law declared by former President Yoon Suk Yeol lasted just six hours, before lawmakers  aided directly by civilian protesters  voted to overturn it at the National Assembly. Lee announced plans to designate Dec. 3 as “People’s Sovereignty Day,” commemorating what he called the beginning of the “Revolution of Light,” a reference to mass demonstrations in which tens of thousands of citizens, many young people wielding K-pop-style light sticks, filled streets nationwide to defend constitutional order. He emphasized that the National Assembly’s vote to lift martial law was possible only because civilians physically blocked armored vehicles and helped lawmakers enter parliament.

Calling the events “an unprecedented democratic crisis in world history,” Lee said the episode exposed weaknesses in presidential power checks but ultimately showcased the resilience of Korea’s democracy. He noted that investigations and trials related to the coup attempt are ongoing, including cases against several senior military figures, while stressing that accountability rather than revenge  must guide the process.

Parallel to the anniversary address, Defense Minister Ahn Gyu-back, the country’s first civilian defense chief in 64 years, convened a meeting of about 150 senior military officials to discuss restructuring the armed forces and restoring public trust. The military was directly implicated in the martial law attempt, with troops deployed to block lawmakers and at least two former top generals currently standing trial for insurrection-related charges.

Ahn formally apologized for the military’s role and pledged reforms aimed at preventing any future misuse of force for political purposes. Discussions included long-term structural reform plans extending to 2040, improved working conditions for officers, and Seoul’s goal of regaining wartime operational control from the United States within President Lee’s five-year term ending in 2030.Together, the political commemoration and military reform efforts underscored how a crisis that once threatened Korea’s constitutional order has reshaped governance debates — turning a six-hour emergency decree into a lasting symbol of civic resistance and democratic renewal.

 

6.U.S. Security Strategy Shifts Burden to Allies, Sidelines North Korea as Focus Moves to China and Taiwan

The United States’ newly released National Security Strategy (NSS) has sent a strong signal to its Asian allies, urging greater defense spending and military responsibility, while making a notable departure by omitting any reference to North Korea for the first time in more than a decade.The 33-page strategy document, unveiled by the White House in early December, places President Donald Trump’s “America First” doctrine at its core and outlines Washington’s priorities for global competition , particularly in the Indo-Pacific region. In contrast, Trump’s 2017 strategy ran 68 pages and mentioned North Korea 17 times, underscoring the scale of the shift.

The new strategy repeatedly calls for increased burden-sharing from allies, explicitly urging South Korea and Japan to raise defense spending and invest in advanced capabilities to protect the First Island Chain, a key maritime defense line stretching from Japan to Taiwan and the Philippines. Following pressure from Washington, Seoul has already pledged to raise defense expenditure to 3.5 percent of GDP by 2035, a significant jump from current levels.While North Korea is absent, China and Taiwan dominate the Asia section. The document identifies deterring conflict in the Taiwan Strait as a top strategic priority and stresses the need to maintain U.S. military “overmatch.” It also emphasizes that the American military “cannot and should not” shoulder the burden alone, pressing allies to expand port access, base facilities and joint deterrence capabilities.

Analysts describe the strategy as more isolationist than even Trump’s first-term “America First” policy. The Western Hemisphere is now listed as Washington’s top regional priority, while commitments elsewhere are framed as selective and interest-driven. The document introduces what it calls the “Trump Corollary” to the Monroe Doctrine, signaling reduced engagement in regions deemed less critical to U.S. homeland security.Despite concerns in Seoul, Washington moved to reassure its ally later in the month. At the fifth meeting of the U.S.–ROK Nuclear Consultative Group (NCG)  the first under Trump’s second term  U.S. officials reaffirmed extended deterrence commitments, including the nuclear umbrella. The meeting marked the first NCG session in nearly 11 months, easing speculation that the framework might be downgraded.

Still, the NSS’s silence on North Korea and the complete removal of “denuclearization of the Korean Peninsula” has raised alarms among regional experts. Scholars warn the omission may signal a growing U.S. acceptance of North Korea as a de facto nuclear state, a concern amplified by China’s recent defense white paper, which also dropped references to denuclearization. Even Pyongyang-aligned media took note. A pro-North Korean newspaper described the omission as the “most notable” feature of the strategy, arguing it reflected Washington’s failure to achieve its long-standing nuclear goals.Taken together, the strategy marks a recalibration of U.S. security priorities  less emphasis on the Korean Peninsula, heavier demands on allies, and a sharper focus on China, Taiwan and strategic competition leaving Seoul to navigate rising defense expectations amid growing geopolitical uncertainty.

 

7.Lee, Takaichi Plan Nara Summit as Japan’s Nuclear Debate Draws North Korean Criticism

South Korean President Lee Jae Myung and Japanese Prime Minister Sanae Takaichi are coordinating a bilateral summit in Nara, Japan, in mid-January, as part of ongoing shuttle diplomacy aimed at strengthening Seoul–Tokyo ties, according to diplomatic sources cited by Kyodo News.The planned meeting follows discussions held on the sidelines of the G20 summit in Johannesburg in November, where the two leaders reaffirmed their commitment to regular leader-level exchanges. Lee had earlier noted that, under the shuttle diplomacy rotation, it was “Korea’s turn to visit Japan,” proposing a meeting outside Tokyo. Takaichi reportedly welcomed the idea, responding positively to holding talks in her hometown of Nara.

The summit plan emerged after Japan shelved an earlier proposal for a trilateral meeting with China and South Korea, which fell through amid heightened tensions between Tokyo and Beijing over Takaichi’s remarks suggesting Japan could intervene in a Taiwan contingency.As Seoul and Tokyo move to deepen bilateral engagement, North Korea has sharply criticized Japan, denouncing reports that Tokyo is reviewing its long-standing three non-nuclear principles, which prohibit possessing, producing or introducing nuclear weapons. Pyongyang’s state-run Rodong Sinmun accused Japan of seeking remilitarization and using security concerns to justify increased defense spending, constitutional revision and expanded overseas military activity.The developments highlight the complex diplomatic environment surrounding the planned Lee–Takaichi summit, where efforts to stabilize Korea–Japan relations intersect with rising regional security tensions and North Korea’s growing hostility toward Japan’s evolving defense posture.

Korean President Lee Jae Myung, right, poses for a photo with Japanese Prime Minister Sanae Takaichi ahead of a meeting held on the sidelines of the Group of 20 summit in Johannesburg, South Africa, on Nov. 23. [YONHAP]

8.U.S., Korea Launch ‘Pax Silica’ Tech Coalition as Allies Recalibrate North Korea Policy

The United States, South Korea and a group of like-minded partners are set to launch “Pax Silica,” a new coalition aimed at strengthening cooperation on artificial intelligence, critical minerals and advanced technologies, as Washington intensifies efforts to counter China’s growing influence in key supply chains.The initiative will be formally inaugurated through a declaration signed by representatives from South Korea, Japan, Israel, Australia and Singapore, according to the U.S. State Department. The partnership seeks to reduce “coercive” dependencies and safeguard materials and technological capabilities foundational to AI development, particularly semiconductor-related resources.

Pax Silica—derived from the Latin word pax (peace) and silica, a core component of computer chips—reflects Washington’s push to align economic security with national security. U.S. officials emphasized the need to build “trusted” technology ecosystems and resilient supply chains amid growing concerns over China’s export controls on rare earth elements critical to military and electronic manufacturing.

The launch comes as Seoul and Washington also move to restart high-level coordination on North Korea policy, holding their first consultative talks since President Lee Jae Myung took office in June. The discussions aim to align approaches toward Pyongyang and explore ways to revive dialogue, despite North Korea’s repeated rejection of diplomatic overtures.The talks, led by South Korea’s Foreign Ministry and the acting U.S. ambassador to Seoul, highlight renewed alliance coordination but also expose policy friction within the Lee administration, with the Ministry of Unification opting out amid concerns that alliance-led consultations could constrain inter-Korean engagement.Together, the parallel developments underscore a broader recalibration of the Korea–U.S. alliance—deepening cooperation on cutting-edge technology and economic security while reassessing diplomatic strategies toward North Korea in an increasingly competitive regional environment.

 

9.Kim Jong-un Signals Policy Direction at Party Plenum, Marks Constitution Day

North Korean leader Kim Jong-un has delivered what state media described as an “important conclusion” during a key year-end plenary meeting of the ruling Workers’ Party of Korea (WPK), as Pyongyang moves into a politically significant period ahead of its next party congress. According to the Korean Central News Agency (KCNA), the 13th plenary meeting of the WPK’s Eighth Central Committee is reviewing the implementation of major party and state policies in 2025 and preparing for the Ninth Party Congress, expected in January or February. On the second day of the meeting, Kim reportedly assessed policy performance, party inspections and congress preparations, though KCNA did not disclose the substance of his “important conclusion.” The agenda also includes reviewing successes and shortcomings, finalizing the 2025 state budget, and drafting the 2026 budget.

As the plenary meeting continued, Kim made a public appearance on Dec. 27 at a ceremony marking Constitution Day, commemorating the adoption of North Korea’s Socialist Constitution in 1972. The event, held at Mansudae Assembly Hall, featured a national flag-raising, oath-taking and speeches highlighting loyalty to the state and the “people-first principle.” Kim praised labor innovators and athletes, including members of the 2025 FIFA U-17 Women’s World Cup–winning team, and described the past year as a significant moment in the country’s development. The combination of closed-door party deliberations and symbolic public events underscores Pyongyang’s efforts to reinforce internal unity and shape its policy narrative ahead of the closely watched Ninth Party Congress.

 

10.UNC Reaffirms Control Over Inter-Korean Border as Seoul Advances Nuclear Talks with U.S.

The U.S.-led United Nations Command (UNC) has reiterated that the military demarcation line (MDL) separating the two Koreas remains under its authority, responding to South Korea’s recent internal adjustment of land border guidelines aimed at preventing accidental military clashes.The UNC said the MDL was established under the 1953 Korean Armistice Agreement and emphasized its long-standing role in administering the demilitarized zone (DMZ) to maintain stability during periods of heightened inter-Korean tension. The statement followed reports that South Korea’s military refined how troops interpret MDL markers when boundaries are unclear, a move critics say could favor North Korea by effectively shifting the line southward in certain areas. The UNC also stressed that any military talks on the MDL should be conducted under its auspices, as stipulated in the armistice.

Separately, Seoul named Rim Kap-soo, a seasoned nonproliferation expert and ambassador to Romania, as chief negotiator for upcoming talks with Washington on civil uranium enrichment and spent fuel reprocessing. Rim, a former specialist at the International Atomic Energy Agency, will lead a bilateral task force following summit commitments by President Lee Jae Myung and U.S. President Donald Trump to expand nuclear cooperation while adhering to global nonproliferation norms.Together, the developments underscore South Korea’s dual focus on managing security sensitivities on the Korean Peninsula and advancing strategic cooperation with the United States in high-stakes policy areas.

 

11.Seoul, Moscow Hold Quiet Talks on North Korea’s Nuclear Program

South Korea and Russia have held closed-door discussions in Moscow on North Korea’s nuclear program and regional security issues, diplomatic sources said, in a rare engagement amid strained bilateral relations.A South Korean Foreign Ministry official overseeing North Korea nuclear affairs met with Oleg Burmistrov, Russia’s ambassador-at-large for the issue, urging Moscow to play a constructive role in maintaining stability on the Korean Peninsula. The talks come as Seoul seeks to reopen dialogue with Pyongyang next year, while also closely watching efforts to end the war in Ukraine.

Relations between Seoul and Moscow have cooled sharply since late 2024, following North Korea’s deployment of troops to support Russia in Ukraine. Still, Seoul appears to view Russia—given its close ties with Pyongyang—as a potential channel to encourage North Korea’s return to negotiations.South Korea also reportedly raised concerns over growing military cooperation between Russia and North Korea, which Seoul considers a security threat and a violation of UN Security Council resolutions. Except for a foreign ministers’ meeting in September, the Moscow talks marked the first working-level engagement on North Korean nuclear issues between the two sides in more than a year.

 

12.President Lee to Make First State Visit to China in Nine Years

President Lee Jae Myung will make a four-day state visit to China from Sunday, his first since taking office, as Seoul and Beijing seek to revive their strategic cooperative partnership and deepen economic and historical ties.

Lee will visit Beijing from Jan. 4 to 6 for a summit and state dinner with Chinese President Xi Jinping, followed by official bilateral engagements. He will then travel to Shanghai from Jan. 6 to 7 to commemorate the 150th birth anniversary of Korean independence activist Kim Koo and the 100th anniversary of the Korean Provisional Government’s main building in the city.The visit reciprocates Xi’s state visit to South Korea in October and comes just two months after the leaders met on the sidelines of the APEC summit in Gyeongju. Lee will become the first Korean president to make a state visit to China in nine years, following former President Moon Jae-in’s 2019 trip.

A large business delegation, expected to include around 200 corporate leaders, is likely to accompany Lee, reflecting Seoul’s focus on economic cooperation. Talks are expected to cover supply chains, investment, critical minerals, the digital economy, environmental cooperation and transnational crime, with several memorandums of understanding set to be signed.The visit underscores Lee’s broader diplomatic effort to stabilize relations with China, strengthen economic ties and position Seoul as a mediator in Northeast Asia, including efforts to resume dialogue with North Korea.

13.Korea Concludes Two-Year Term on UN Security Council

South Korea is set to conclude its two-year term as a nonpermanent member of the United Nations Security Council (UNSC) this week, marking its third stint on the UN’s key body responsible for maintaining international peace and security.Elected in June 2023, South Korea served alongside Algeria, Sierra Leone, Guyana and Slovenia, with its term officially ending on Wednesday, according to the Foreign Ministry. It was the country’s first return to the UNSC in 11 years, following previous terms in 1996–97 and 2013–14.During its tenure, Seoul sought to address emerging security challenges amid a shifting global landscape. Notably, South Korea hosted high-level open debates on cybersecurity and artificial intelligence while holding the rotating UNSC presidency in June 2024 and September 2025, enhancing its profile as a leading voice on future-oriented security issues.

South Korea also drew international attention for its vote in favor of Palestine’s bid for full UN membership, a move that signaled a shift from its earlier alignment with the United States and resonated with countries in the Global South.Throughout its term, Seoul consistently raised concerns over North Korea’s nuclear program and human rights record, as the Security Council convened multiple meetings following Pyongyang’s ballistic missile launches and military satellite tests in violation of UN sanctions.Despite deep divisions among permanent members limiting the council’s effectiveness on major conflicts, South Korea emphasized respect for international law, protection of civilians and peacekeeping reform, participating actively in deliberations on the future of UN peace operations.Building on its experience, the government said it will continue to expand its contributions to global peace and security even after its UNSC term concludes.

 

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