Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
Businesses expect US-China summit to ease supply chain concerns
A screen in a Beijing restaurant shows Chinese President Xi Jinping and U.S. President Joe Biden's virtual meeting held via video link, Nov. 16. Reuters-Yonhap
By Baek Byung-yeul
By Baek Byung-yeul
A virtual summit between U.S. President Joe Biden and his Chinese counterpart Xi Jinping took place Tuesday with the two leaders discussing issues like Taiwan, trade and human rights.
During the meeting that lasted more than three hours, Biden said both countries had a responsibility to ensure their relationship did not “veer into open conflict,” while Xi said the U.S. and China needed to improve “communication” and face challenges “together.”
The two leaders have held talks over the phone two times so far, but the virtual summit was their first face-to-face meeting since Biden took office in January.
Regarding the summit, a senior administration official of the White House said tariffs and supply chain issues are likely to be pushed back from the talks, while issues related to international affairs and national security are expected to be highlighted.
“You know, it's not something I expect to be a significant point of discussion, but certainly, there are a number of, sort of, economic issues and other questions that I think they will touch on through the course of the conversation. I certainly can't predict what China may raise, but I don't expect that to sort of feature as something on ― at least on our agenda,” the official said.
Korean businesses expected the two leaders to actively discuss solutions for the global supply chain crisis with which countries from all over the world are struggling. Although there was no specific mention of the supply chain issue, industry officials here said the dialogue between the two leaders was meaningful as it will act as a forum for conversation to address tensions.
“The industry view here was that the leaders of the two superpowers tried to make the summit a place to emphasize cooperation while maintaining competitive relations rather than intensifying conflict between the two sides,” an industry official said.
Korea is no exception to the issue. Recently, the country has been suffering from a shortage of diesel exhaust fluid (DEF), an additive used in diesel engines to reduce emissions. The crisis was largely attributed to a trade row between the U.S. and China that also involved Australia, a strong ally of Washington.
After China banned coal imports from Australia, it created a sudden shortage of coal that it uses for domestic power generation. To address this, China restricted the use of coal for any other purpose, affecting coal-related exports that included urea, a byproduct of burning the fossil fuel and the main component of DEF. Korea's inventory of DEF plunged because the country heavily relies on China for imports of urea.
Manufacturers of semiconductors, which are Korea's largest export item, also have been struggling with the supply issue. Samsung Electronics and SK hynix recently sent internal information to the U.S. government.
The U.S. Department of Commerce's "wanted items" ― from chipmakers including Samsung, SK, TSMC as well as carmakers ― included sales numbers, inventories and lists of customers. Washington elaborated that the request for information comes in response to the global chip supply shortage, which has caused severe production disruptions for major carmakers there.
“The two leaders' meeting has not dealt with specific issue regarding the chip shortage. Given the U.S. and China are playing a pivotal role in the supply chain of the global semiconductor market, we are closely monitoring how their talks could impact the semiconductor industry in the future,” an official in local semiconductor industry said.