South Korean President Moon Jae-in yesterday renewed calls for an "inter-Korean peace economy" to surpass Japan, evoking their bitter shared history and stoking nationalistic zeal as he lambasted Tokyo for expelling Seoul from a white list of trusted export destinations.
"We must not stop at merely overcoming Japan's trade retaliation, but proceed further to adopt an even wider perspective and summon an unshakeable resolve that will help us surpass the Japanese economy," he said at a meeting with his senior secretaries.
"The realisation of a peace economy through inter-Korean economic cooperation will allow us to immediately catch up with Japan's advantages," he added, referring to the size of the Japanese economy and domestic market.
Still, he did not elaborate how this might materialise in the light of tough United Nations sanctions against North Korea, which recently held three short-range projectile tests in one week.
A detente has also not led to any resumption of an industrial complex in the North Korean border town of Kaesong, nor guided tours to Mount Kumgang.
"We cannot let ourselves languish in pessimism or give up on a peace economy because of fluctuations in inter-Korean and North Korea-US relations," Mr Moon exhorted. "Japan will never succeed in impeding our economic drive."
Last Friday, Japan said it will remove South Korea from its white list of trusted trade partners over security concerns, citing significantly undermined trust over Seoul's failure to address these issues by shunning its requests for talks.
An opinion poll by Japanese public broadcaster NHK yesterday said 55 per cent supported the move, 27 per cent were on the fence while 8 per cent opposed the measure.
Another survey by Sankei Shimbun and the Fuji News Network showed 67.6 per cent in favour and 19.4 per cent against. But 58.5 per cent said they were concerned over the deteriorating bilateral ties.
Despite Tokyo's assertions that its trade action has nothing to do with a South Korean Supreme Court ruling last October ordering compensation for wartime labourers, Seoul is describing the move as an unjust retaliatory measure.
South Korea's Trade Ministry yesterday said it will invest 7.8 trillion won (S$8.9 billion) to build a stable domestic supply of 100 key strategic items, 20 of which it wants to reduce industry reliance on Japanese exports by next year.
Meanwhile, its Fair Trade Commission has fined four Japanese companies - Mitsubishi Electric, Hitachi Automotive Systems, Denso and Diamond Electric - 9.2 billion won for collusion and bid-rigging.
Japan's Chief Cabinet Secretary Yoshihide Suga yesterday said the companies will respond properly after closely examining the order.
South Korea also plans to stage defence drills this month near the disputed Dokdo/Takeshima islets, in an act that is bound to incite Tokyo.
The widening anti-Japan sentiment led Tokyo to issue a travel notice on Sunday, urging Japanese citizens living in or with plans to visit South Korea to exercise caution.
A candlelight vigil in Seoul last Saturday drew 15,000 people, organisers said. Some restaurants are reportedly turning away Japanese customers, while the release of the new Doraemon film has been delayed indefinitely.
Works by famous Japanese artist Yayoi Kusama have been dropped from the line-up at the Korea International Art Fair next month.
South Korea also plans to boycott the Japan-based Miss International beauty contest in October.