Seoul needs confident approach and elaborate strategy
The Asia-Pacific Economic Cooperation (APEC) trade ministers' meeting in Detroit, Mich., last week was quite noteworthy.
Drawing our attention was the Korea-China talk held on its sidelines.
Afterward, the Chinese side issued a press release that focused on an agreement to "strengthen dialogue and cooperation in the semiconductor industry and supply networks."
Korea's news release was a little different. It said Seoul asked for Beijing's attention and support to the stable supply of critical raw materials and parts for smooth bilateral trade. Korea also emphasized the need for "mutual respect" and a "predictable business environment." These were indirect expressions of discontent with China's use of trade as a retaliatory tool.
China's somewhat hasty and unilateral press release reflected its anxiety about being alienated from the new, U.S.-led chip supply chain. Korea and the U.S. also discussed the Indo-Pacific Economic Framework. The two-day meeting signaled what will come in the next few years.
Beijing's virtual demand on Seoul came after its counterattack against Washington. Timed with the end of the G7 meeting in Japan on May 21, China banned the import of chips from Micron, citing security reasons. It was a tit-for-tat against America's expulsion of Huawei four years ago. Immediately, a U.S. lawmaker who chairs the U.S.-China competition committee told Korean chipmakers not to "backfill" Micron's void.
Both the Chinese trade minister and the U.S. congressman are being arrogant. Yes, Korea needs the largest and second-largest export markets for its memory chips. Seoul also depends heavily on Washington for security. But that does not mean Korea should let the G2 use it as a pawn in their chess game. The nation must avoid falling into a position of deciding on one of the two. Korea should refute, persuade and make demands of its two giant economic partners depending on the situation.
Seoul should tell Beijing why it is difficult not to join the U.S.-led global supply chain. Europe and even most middle powers, like India and Brazil, are de-risking by keeping some distance from China. For similar reasons, Korean officials must tell their Chinese counterparts why Beijing's renewed signals of economic retaliation against Korea will backfire. China recently banned Korea's largest internet search engine and kept some K-pop idols from appearing on Chinese TV shows. Korea should see these not as threats but as urgent gestures.
Seoul also must face down some excessive U.S. moves. It should explain why Washington's attempt to decouple from China will be like shooting itself in the foot. Also, citing the case of some U.S. companies tying up with Chinese partners behind Washington's back, Seoul must explain why it is difficult for the government to tell private businesses to do this or that.
At the same time, Korea must jump on the U.S.-Japanese bandwagon to develop next-generation semiconductors. Seoul must secure economic gains in return for its security betting on the trilateral alliance. It must not let geopolitical limitations bind its hands and feet in economic matters.
President Yoon Suk Yeol should show the people what he will seek in "futuristic bilateral cooperation" after conceding all to Japan on historical issues. After Yoon's third summit with his Japanese counterpart earlier this month, Samsung Electronics announced a massive investment plan in Japan. We have yet to hear any corresponding news from Tokyo.
Economic diplomacy should be mutually beneficial. During Yoon's visit to the U.S. last month, President Joe Biden made clear his America-first policy in the economy. Yoon said Korea and America are "values-based allies that do not meet and part according to benefits." It seemed as if the two leaders made remarks better befitting the other.
Korea must be more confident and straightforward in pursuing economic interests based on technological superiority. Samsung is known to be closest to making 2-nanometer chips for the first time worldwide.
The late Samsung founder Lee Byung-chull was right when he said, "The third-rate government leads the second-rate business in Korea."
It is hard to know whether the Yoon administration is unable or unwilling to conduct appropriate economic diplomacy.
The Asia-Pacific Economic Cooperation (APEC) trade ministers' meeting in Detroit, Mich., last week was quite noteworthy.
Drawing our attention was the Korea-China talk held on its sidelines.
Afterward, the Chinese side issued a press release that focused on an agreement to "strengthen dialogue and cooperation in the semiconductor industry and supply networks."
Korea's news release was a little different. It said Seoul asked for Beijing's attention and support to the stable supply of critical raw materials and parts for smooth bilateral trade. Korea also emphasized the need for "mutual respect" and a "predictable business environment." These were indirect expressions of discontent with China's use of trade as a retaliatory tool.
China's somewhat hasty and unilateral press release reflected its anxiety about being alienated from the new, U.S.-led chip supply chain. Korea and the U.S. also discussed the Indo-Pacific Economic Framework. The two-day meeting signaled what will come in the next few years.
Beijing's virtual demand on Seoul came after its counterattack against Washington. Timed with the end of the G7 meeting in Japan on May 21, China banned the import of chips from Micron, citing security reasons. It was a tit-for-tat against America's expulsion of Huawei four years ago. Immediately, a U.S. lawmaker who chairs the U.S.-China competition committee told Korean chipmakers not to "backfill" Micron's void.
Both the Chinese trade minister and the U.S. congressman are being arrogant. Yes, Korea needs the largest and second-largest export markets for its memory chips. Seoul also depends heavily on Washington for security. But that does not mean Korea should let the G2 use it as a pawn in their chess game. The nation must avoid falling into a position of deciding on one of the two. Korea should refute, persuade and make demands of its two giant economic partners depending on the situation.
Seoul should tell Beijing why it is difficult not to join the U.S.-led global supply chain. Europe and even most middle powers, like India and Brazil, are de-risking by keeping some distance from China. For similar reasons, Korean officials must tell their Chinese counterparts why Beijing's renewed signals of economic retaliation against Korea will backfire. China recently banned Korea's largest internet search engine and kept some K-pop idols from appearing on Chinese TV shows. Korea should see these not as threats but as urgent gestures.
Seoul also must face down some excessive U.S. moves. It should explain why Washington's attempt to decouple from China will be like shooting itself in the foot. Also, citing the case of some U.S. companies tying up with Chinese partners behind Washington's back, Seoul must explain why it is difficult for the government to tell private businesses to do this or that.
At the same time, Korea must jump on the U.S.-Japanese bandwagon to develop next-generation semiconductors. Seoul must secure economic gains in return for its security betting on the trilateral alliance. It must not let geopolitical limitations bind its hands and feet in economic matters.
President Yoon Suk Yeol should show the people what he will seek in "futuristic bilateral cooperation" after conceding all to Japan on historical issues. After Yoon's third summit with his Japanese counterpart earlier this month, Samsung Electronics announced a massive investment plan in Japan. We have yet to hear any corresponding news from Tokyo.
Economic diplomacy should be mutually beneficial. During Yoon's visit to the U.S. last month, President Joe Biden made clear his America-first policy in the economy. Yoon said Korea and America are "values-based allies that do not meet and part according to benefits." It seemed as if the two leaders made remarks better befitting the other.
Korea must be more confident and straightforward in pursuing economic interests based on technological superiority. Samsung is known to be closest to making 2-nanometer chips for the first time worldwide.
The late Samsung founder Lee Byung-chull was right when he said, "The third-rate government leads the second-rate business in Korea."
It is hard to know whether the Yoon administration is unable or unwilling to conduct appropriate economic diplomacy.
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