August 19, 1997.
Yoon Ki-hoon, an executive at Daehung Investment, had lunch with the president of a company he had invested in and returned to the office.
After taking off his jacket and hanging it on the coat rack, he sat down in a plush chair, leaned back, and closed his eyes for a moment, feeling the drowsiness from the meal.
Just as he was about to fall asleep, a knock sounded from outside.
"Oh. What's going on?"
Yoon Ki-hoon opened his eyes immediately and spoke.
A secretary, dressed in a skirt suit, opened the door and entered to announce a visitor.
"The finance director is here."
"Tell him to come in."
"Yes."
After the secretary left, it wasn't long before Eom Tae-jun, the finance director, appeared.
"Come on in."
Yoon Ki-hoon straightened up from his relaxed position and greeted him.
"Did I disturb you when you're busy?"
Eom Tae-jun, with a smile on his face, asked.
"Not at all. I just came back from an external meeting and was resting for a bit."
Trying to shake off the lingering drowsiness, Yoon Ki-hoon rubbed his face with his palm and gestured toward the sofa.
"Please sit over there."
"Thank you."
Eom Tae-jun went over to the leather sofa and sat down. Yoon Ki-hoon stood up from his desk chair and sat opposite him.
"What would you like to drink?"
The secretary, who had been standing at the door, approached and asked.
"One coffee, please. And for you?"
"I'll have the same."
"Understood."
After the secretary left and closed the door, Yoon Ki-hoon leaned his arm on the sofa's armrest and looked at his guest.
"You didn't come here just to chat. So, what's the matter?"
Seeing him get straight to the point, Eom Tae-jun smiled slightly.
"You still can't stand not getting to the point right away, huh?"
"That's just my nature, I can't help it."
Eom Tae-jun paused for a moment before asking.
"Do you happen to know what the exchange rate is today?"
Not knowing the exact intention behind the question, Yoon Ki-hoon tilted his head and responded.
"Well, I don't check it daily, so I'm not sure, but recently, the government introduced a stabilization measure and it dropped to around 930 won, so it should be somewhere around there."
At this, Eom Tae-jun, the finance director, leaned forward and said,
"Don't be surprised. It's 991 won per dollar."
"...!"
Yoon Ki-hoon's eyes widened in shock at the much higher-than-expected exchange rate.
"Did you say 991 won?"
"Yes."
As if he had expected this reaction, Eom Tae-jun nodded slightly and continued.
"You must have heard the news that one of the three major credit rating agencies, S&P, downgraded Korea's credit outlook from negative to a full downgrade from AA to A+ just last night."
"Hmm. I thought it would be a negative factor for the exchange rate, but I didn't expect it to spike like this."
"That's evidence of how foreign investors are viewing Korea with increasing concern."
"You're right about that."
Just yesterday, the situation had become even more chaotic with the Gi-chang Group breaking the agreement with the government and creditors, and suddenly applying to the court for a corporate restructuring of its major subsidiaries. The economy as a whole was heading into a state of uncertainty and stagnation, so Yoon Ki-hoon nodded heavily.
At that moment, the secretary knocked and entered, prompting the two to pause their conversation.
The secretary quietly set a cup of coffee on the table for each of them and bowed lightly before leaving again.
Once the door was closed, Eom Tae-jun continued speaking to Yoon Ki-hoon.
"As a result of all this, the stock market has also fallen sharply, and there's a very high chance it will break below 600 today."
"Just last month, the KOSPI was at 775. To see it plummet like this is really a serious situation."
Unlike the future, where news could be accessed instantly through smartphones and the internet, it was still difficult to obtain information back then unless it was through newspapers or broadcasts.
As a result, Yoon Ki-hoon's face stiffened as he was hearing about the stock and foreign exchange market chaos for the first time from Eom Tae-jun.
"The stock market shock is significant, but what's even more critical is the merchant banks."
"Are you referring to their short-term foreign debt?"
"That's right. Of the 20 billion dollars in foreign debt that merchant banks hold, more than half, about 12.9 billion dollars, is short-term debt. And now, with the downgrade of the country's credit rating, it has become much harder to extend the repayment period."
"Are you saying that even with the Korea Premium, it's hard to extend it?"
The term "Korea Premium" had been coined after the bankruptcy of Hanbo Group, reflecting the additional interest rates charged in international financial markets to account for the economic risks of Korea.
"Yes. Until just recently, we could borrow foreign currency by offering higher interest rates. But now, even that has become difficult," said Eom Tae-jun.
Yoon Ki-hoon let out a low grunt.
"With liquidity already drying up in the market, and with banks and merchant banks in such a situation, the capital market will only freeze up further."
"That's why, it's not just small businesses, but even the top 10 chaebols' financial teams are desperately securing cash and dollars."
"That's expected."
"Looking at that, we're lucky that thanks to your foresight, we were able to pay off all our debts early or switch them to long-term loans."
"That's true."
Yoon Ki-hoon nodded as he lifted his coffee cup.
He recalled when Seok-won took over Daehung Investment and, as the new owner, quickly overhauled the existing investment portfolio, paying off all debts early or switching expensive short-term loans to long-term ones. He had initially been very concerned about these moves, but now, looking back, he thought that perhaps he had been too hasty.
"As you said, looking back, it seems like the president foresaw this situation and took the necessary precautions."
Eom Tae-jun, the finance director, nodded in agreement.
"I believe so too. When he was at Daehung Securities, he achieved remarkable results. As expected, the chairman's bloodline is something else."
"Indeed. Both sons of the chairman are outstanding, so our group will be fine going forward," Yoon Ki-hoon said, agreeing as he nodded.
After sipping his coffee, Yoon Ki-hoon suddenly turned his attention to Eom Tae-jun.
"You didn't come to my office just to praise the president, so what's the real matter?"
"Oh, right. Talking like this, I got sidetracked," Eom Tae-jun scratched his head awkwardly.
"Actually, this morning, the branch manager of Ilhan Bank, Choi, came to see me."
At this, Yoon Ki-hoon looked surprised.
"He came directly to the company?"
"Yes."
Ilhan Bank was Daehung Investment's primary bank, but it wasn't common for a branch manager to visit the company in person.
"Even though it's not the holidays, what could have brought him here?"
"That's right. They came to buy dollars."
At the unexpected answer, Yoon Ki-hoon furrowed his brow.
"Dollars?"
"Before the exchange rate spiked, on the president's orders, we converted all of the company's surplus funds into dollars."
"Ah, right."
"At that time, Ilhan Bank handled the exchange, and they knew we had a large amount of dollars, so they asked if we could sell or lend them some."
Yoon Ki-hoon stared at Eom Tae-jun, the finance director, with a shocked look on his face.
"Are you saying that the bank came to a regular company to buy dollars?"
"Yes. At first, I was just as surprised as you. But when I thought about it, it's clear that the bank is in such a tight spot that they can't even get dollars."
"I see."
Realizing that it wasn't something to laugh off, Yoon Ki-hoon's expression turned serious.
"So, what did you say?"
"Well, I told them that unless the dollar shortage worsens, there's no way we can just give it away. I said the dollars were under the president's direct management, and that I didn't have the authority to make that decision."
"Good job."
"Even so, they kept insisting, so it was a bit troublesome."
Eom Tae-jun laughed heartily and took a sip of his coffee.
"I can't believe how perfect the timing was, knowing the exchange rate was going to skyrocket and changing the dollars at just the right time. I have nothing but admiration."
"Right, indeed."
"Meanwhile, the exchange rate shot up from 826 to 991, so just sitting on it brought in a 20% profit. I don't think there's a better deal than that."
"Sounds like you're making money just by sitting on a cushion," Yoon Ki-hoon said, once again impressed by Seok-won's foresight.
Unlike other companies, who were sighing as the exchange rate rose, Daehung Investment was benefiting from it, so it made sense that they were in a good position.
At that moment, as Eom Tae-jun was sipping his coffee, a thought crossed his mind.
"By the way, the dollars that the president converted were placed in the fund management department for investment. I assume they haven't suffered any losses and are being managed well, right?"
The fund management department was directly under Seok-won, so even Yoon Ki-hoon wasn't confident in giving an answer and replied in a somewhat worried tone.
"Hmm. They should be fine."
***
As he nodded, Bella told him to wait for a moment and walked toward the back.
Seok-won raised the partition that had been placed beside him and looked out of the round window. Beyond the windbreak, the blue sky stretched out, with thick white clouds covering it.
"At least there's no fine dust around here yet."
Before the regression, when people thought of China, they typically envisioned cities covered in smog and yellow dust, with environmental pollution being a serious issue.
But now, as China rapidly transformed into the "world's factory," a massive production complex making all sorts of goods cheaply, the days when one could see skies like this were becoming fewer and fewer.
Thinking about the incoming fine dust from China, which would soon become a constant presence in all seasons, Seok-won felt as if he could already sense the suffocating air.
When Seok-won furrowed his brow, Bella returned and handed him a small bottle of water.
"Here's the water you asked for."
Normally, she would have brought it in a glass cup, but since they were about to land, she had opted for a safer plastic bottle.
"Thank you."
Seok-won accepted the bottle, unscrewed the cap, and took a drink. The cool taste of the water quenched his thirst, and it felt like his mind cleared up as well.
"President Liu Xiangfu... or now, he's the Party Secretary of Fujian, right? Anyway, I'm curious about what Liu Xiangfu was like in his youth."
As the IMF crisis loomed, Seok-won was leaving Korea and heading to China to meet Liu Xiangfu, who would rise to be China's supreme leader a decade later.
While thinking about how to build a relationship with Liu Xiangfu, Bella came over and spoke.
"We'll be landing soon. Please fasten your seatbelt."
Following Bella's instructions, Seok-won found his seatbelt and clicked it into place before adjusting himself into a more comfortable position.
Before long, the Gulfstream IV private jet carrying Seok-won began to descend gradually, lowering its altitude.
As they came down beneath the clouds, the yellowish-brown landscape of the earth below became visible through the window.
Soon, the Gulfstream IV, with its large wheels extended beneath both wings, gently landed on the long, feather-like Beijing airport runway.