It's the economy, stupid! South Korea in an age of hyper-uncertainty

Chang Se-myeong

The world we currently inhabit has already completed its transition from the age of globalization to the age of economic security, reflecting a systemic shift from absolute to relative gains.

Alongside hard and soft power, there is now a third form of power that demands our attention: supply chain power. The hegemonic rivalry between the United States and China manifests as a supply chain war. A tit-for-tat economic battlefield has become the norm: its weapons sanctions and export controls, its commanders and economists and executives serving national directives, and its measure of strength primacy in finance and technology. South Korea, structurally sensitive to shifts in the global trading environment, now finds itself living inside a weaponized global economy as economic instruments such as trade and finance have grown openly coercive, becoming forms of leverage.

If oil was the axis of great-power diplomacy and military strategy in the 20th century, that axis has now shifted to critical minerals. Just as oil underpinned transport, power generation and the chemical industry — and was indispensable to waging war — critical minerals are now essential not only to traditional industries like electronics, automobiles and batteries, but also to semiconductors, artificial intelligence (AI), renewable energy and advanced weapons systems, as well as rare-earth permanent magnets. Competition between the U.S. and China to draw mineral-rich states into their respective spheres of influence has intensified markedly in recent years. Their clash over critical minerals is the starting point of a new resource geopolitics forcing every country to answer one question: whom do you trust, and whose supply chain will you join?

America's raid on Venezuela and the war against Iran expose the logic of great-power competition as Venezuela is one of China's principal sources of crude oil and the Strait of Hormuz functions as China’s energy lifeline. Nor can the U.S.-China race in AI be left out of this picture: the data centers and semiconductor fabrication that AI development and operation require consume enormous quantities of electricity, and Trump's calculation is to meet that demand through fossil fuel-based power generation. The result is a symmetry of leverage: China wielding its advantage in minerals, and the United States countering with its advantage in energy institutions and infrastructure.

How then should South Korea respond to this geoeconomic moment?

To begin with, South Korea must secure irreplaceable chokepoints within global supply chain networks. It must also come to occupy key nodes within technology and supply chain architecture: in the standard-setting processes for semiconductors, batteries and artificial intelligence, it needs a linchpin strategy that makes alliances unable to function without Korean participation. It is only by possessing such leverage or bargaining chips that South Korea can be treated by the United States and China as an indispensable, independent ally.

Second, there is an urgent need to redesign national legislation so that renewable energy is formally codified as a strategic national asset. South Korea ranks among the countries most exposed to the global energy crisis caused by the war in Iran. To strengthen energy security, Seoul must accelerate the expansion and modernization of its power grid, and in order to reduce the country's overall dependence on energy imports, it must situate the decarbonization of such energy-intensive industries as steel and petrochemicals within the broader framework of energy security strategy.

We have entered an age of hyper-uncertainty, in which conflicts across politics, economics, the environment, technology, culture and morality erupt and converge simultaneously. Only policy built on the recognition that economics has become a core instrument of security and that security strategy must be designed upon an economic foundation can navigate the era ahead.

Chang Se-myeong (semyeongchangx7@korea.ac.kr) is a student at Korea University Graduate School of International Studies, majoring in international peace and security.