Action plans urged to tackle China's potential retaliations
Geopolitical tensions between the United States and China continue to intensify possibly toward a potentially critical point. Infuriated by a series of diplomatic offensives by the U.S., China appears poised to resort to economic retaliation, raising concerns about the potential fallout on the national economy. Taiwanese President Tsai Ing-wen met with U.S. House Speaker Kevin McCarthy in Los Angeles Wednesday, prompting China to take countermeasures.
For starters, China stepped up its military campaign targeting Taiwan by deploying an aircraft carrier through waters south of the island. China also incited condemnation from Taiwan by sending fighter jets and dispatching coastguard vessels for unusual patrols. The Tsai-McCarthy meeting triggered anxiety over China's possible move to take further retaliatory measures against the U.S. and its allies. Earlier, China got tough with Taiwan by mobilizing military forces and imposing export restrictions to protest then House Speaker Nancy Pelosi's visit to Taiwan in August last year.
Increasingly wary of the move by the U.S. and Taiwan, China has been cementing ties with Russia. Most recently, China has also been boosting relations with France by inviting President Emmanuel Macron to crucial summits with Chinese President Xi Jinping. The Xi-Macron meetings proceeded in an unusually amicable atmosphere amid the unprecedentedly lavish treatment of the French leader.
Some media outlets reported that Xi told Russian President Vladimir Putin he would maintain a neutral stance regarding the sovereignty of the four islands to the south of Kuril Islands, in a shift in China's stance of acknowledging Japan's territorial rights over the isles.
The escalating geopolitical conflicts between the U.S. and China will likely pose additional challenges for the Korean economy. In a "Global Financial Stability Report 2023," the International Monetary Fund (IMF) said the fragmentation of the U.S.-China standoff will lead to aggravating Korea's competitiveness in inducing foreign direct investment mainly for strategically significant industries such as semiconductors. It also forecasts that the growing bilateral rivalry will slow global economic growth by 2 percentage points.
The U.S. has been adopting a package of measures aimed at curbing the growth of China's cutting-edge industries. In response, China has also begun to take counter steps against such export-restrictive devices. China is allegedly seeking to include manufacturing technology of "rare earth (neodymium and samarium cobalt) magnet," a core component of high-functional motors, on the list of export controls.
China has also asked the World Trade Organization (WTO) to investigate allegations that the U.S., Japan and the Netherlands violated WTO rules by banning exports of state-of-the-art semiconductor equipment to China. China already filed a suit against the U.S. in this regard.
The U.S. has been taking the lead in excluding China from the global supply chain of cutting-edge industries. The CHIPs and Science Act and the Inflation Reduction Act (IRA) were both designed for the U.S. to realign the global markets of semiconductors, electric vehicles and batteries in its favor.
Against this backdrop, China has been desperate to contain U.S. offensives. China accounts for 80 to 90 percent of the global supply of rare earth magnets which are essential for high-tech products such as EVs, aircraft and robots. As the largest producer and manufacturer of such rare products, China has been employing diverse tactics to make the most of the materials.
Korea, for its part, has been vulnerable to the growing hegemonic competition between the two superpowers. The Yoon Suk Yeol administration unveiled a plan last month to "secure the 10 main minerals" after setting up partnership relations with 12 countries last year. Despite such steps, however, it is difficult for Korea to reduce its heavy reliance on China in such a short span of time.
It is high time for the government and businesses to double down on expanding the supply channels from a long-term perspective. Economic and diplomatic efforts are necessary to help minimize the possible impact on the national economy.
Geopolitical tensions between the United States and China continue to intensify possibly toward a potentially critical point. Infuriated by a series of diplomatic offensives by the U.S., China appears poised to resort to economic retaliation, raising concerns about the potential fallout on the national economy. Taiwanese President Tsai Ing-wen met with U.S. House Speaker Kevin McCarthy in Los Angeles Wednesday, prompting China to take countermeasures.
For starters, China stepped up its military campaign targeting Taiwan by deploying an aircraft carrier through waters south of the island. China also incited condemnation from Taiwan by sending fighter jets and dispatching coastguard vessels for unusual patrols. The Tsai-McCarthy meeting triggered anxiety over China's possible move to take further retaliatory measures against the U.S. and its allies. Earlier, China got tough with Taiwan by mobilizing military forces and imposing export restrictions to protest then House Speaker Nancy Pelosi's visit to Taiwan in August last year.
Increasingly wary of the move by the U.S. and Taiwan, China has been cementing ties with Russia. Most recently, China has also been boosting relations with France by inviting President Emmanuel Macron to crucial summits with Chinese President Xi Jinping. The Xi-Macron meetings proceeded in an unusually amicable atmosphere amid the unprecedentedly lavish treatment of the French leader.
Some media outlets reported that Xi told Russian President Vladimir Putin he would maintain a neutral stance regarding the sovereignty of the four islands to the south of Kuril Islands, in a shift in China's stance of acknowledging Japan's territorial rights over the isles.
The escalating geopolitical conflicts between the U.S. and China will likely pose additional challenges for the Korean economy. In a "Global Financial Stability Report 2023," the International Monetary Fund (IMF) said the fragmentation of the U.S.-China standoff will lead to aggravating Korea's competitiveness in inducing foreign direct investment mainly for strategically significant industries such as semiconductors. It also forecasts that the growing bilateral rivalry will slow global economic growth by 2 percentage points.
The U.S. has been adopting a package of measures aimed at curbing the growth of China's cutting-edge industries. In response, China has also begun to take counter steps against such export-restrictive devices. China is allegedly seeking to include manufacturing technology of "rare earth (neodymium and samarium cobalt) magnet," a core component of high-functional motors, on the list of export controls.
China has also asked the World Trade Organization (WTO) to investigate allegations that the U.S., Japan and the Netherlands violated WTO rules by banning exports of state-of-the-art semiconductor equipment to China. China already filed a suit against the U.S. in this regard.
The U.S. has been taking the lead in excluding China from the global supply chain of cutting-edge industries. The CHIPs and Science Act and the Inflation Reduction Act (IRA) were both designed for the U.S. to realign the global markets of semiconductors, electric vehicles and batteries in its favor.
Against this backdrop, China has been desperate to contain U.S. offensives. China accounts for 80 to 90 percent of the global supply of rare earth magnets which are essential for high-tech products such as EVs, aircraft and robots. As the largest producer and manufacturer of such rare products, China has been employing diverse tactics to make the most of the materials.
Korea, for its part, has been vulnerable to the growing hegemonic competition between the two superpowers. The Yoon Suk Yeol administration unveiled a plan last month to "secure the 10 main minerals" after setting up partnership relations with 12 countries last year. Despite such steps, however, it is difficult for Korea to reduce its heavy reliance on China in such a short span of time.
It is high time for the government and businesses to double down on expanding the supply channels from a long-term perspective. Economic and diplomatic efforts are necessary to help minimize the possible impact on the national economy.
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