South Korean economy under thickening cloud
Seoul's tech alliance with Washington cannot replace cooperation with China
Published: May 11, 2023 09:43 PM
A worker tests semiconductor chips in a factory in Yancheng, East China's Jiangsu Province, on April 14, 2023. Photo: VCG

A worker tests semiconductor chips in a factory in Yancheng, East China's Jiangsu Province, on April 14, 2023. Photo: VCG

During South Korean President Yoon Suk-yeol's visit to the US, South Korea and the US issued a series of documents such as the US-ROK joint statement. Through the summit, the two sides agreed to enhance alliances on security, economy, technology, culture and information.

If South Korea and the US only aspire to strengthen their own alliance, without harming China's interests, China will not object to the normal exchanges between the two. But the US-ROK joint statement clearly pointed fingers at China, arbitrarily interfering in China's internal affairs and challenging China's core interests involving the Taiwan question and the South China Sea. 

The South Korean government may think that it can win the support of the US at the expense of China's interests, but as a matter of fact, following the steps of the US to "decouple" from China will almost certainly cause grave damage to China-South Korea relations.

South Korean government may have some considerations by following the US in "decoupling" from China: First, South Korea uses the Taiwan question and South China Sea that are related to China's core interests as bargaining chips in exchange for demanding a higher level of security guarantee from Washington. Second, China's economy has entered a stage of high-quality development, and South Korea is feeling rising pressure in industrial and technological competition.

And, some in South Korea believe that "the era of cooperating with China to achieve economic growth is over," and the country can still rely on the US to achieve future development.  However, can the US government really guarantee South Korea's security? Can South Korea really achieve high-quality economic growth by merely relying on its industrial and technology alliance with the US? Is China-South Korea economic cooperation no longer important or needed under the South Korea-US industry and technology alliance? 

These are all important questions facing South Koreans.

After more than 30 years of economic cooperation, China and South Korea are deeply intertwined in industrial and supply chains. Although the COVID-19 pandemic caused a sharp decline in global trade, trade between China and South Korea exceeded $360 billion in 2021 and 2022, exceeding the total trade between South Korea and the US, Japan and Europe. 

 In fact, the reason behind the US' inciting South Korea to decouple from China is that American politicians want to use the strength of its allies to serve Washington's nefarious intent and attempt to confront China and stifle China's growth.

Before Yoon's visit, the US government asked South Korea to urge its chipmakers - Samsung and SK Hynix - not to fill any market supply gap in China if China moves to ban Micron Technology from selling chips. And, the US has been luring cutting-edge tech industries to return to North America through doling out hefty subsidies, drawing the ire of Europe and other economies.

It becomes increasingly clear that South Korean hope to develop its own cutting-edge technology by forming closer industrial and technological alliance with the US will fail, because American politicians only place America's national interest at heart. 

This will be verified by the withering sales and revenues of Samsung and SK Hynix this year. South Korea's twisted thought to cooperate with the US and contain China's development will ultimately harm its own interest.

Amid rising economic protectionism originated from the US, China has been actively expanding imports, providing a better business environment to foreign enterprises, and opening up market access for foreign investments. 

China is committed to providing a higher level of freer investment environment, and sharing the dividends of its economic growth with all its trade partners. In this context, China and South Korea can promote bilateral economic and trade cooperation while maintaining some levels of healthy competition, which will benefit both enterprises. 

If South Korea can adapt to the new changes in China's industrial development and market demand, increase exports of high-value-added and high-tech products to Chinese enterprises, and increase high-level investment in China, the country will achieve more benefits from cooperating with China. 

Maintaining, consolidating and constantly developing China-South Korea relations is the basis for promoting long-term economic and trade cooperation between the two countries. If the South Korean government insists on leaning toward the US, and cooperates with the US to contain China in varied fields such as politics, economy, security and society, the fraught relationship between China and South Korea will only deteriorate, and their economic and trade cooperation will become more difficult.

The author is director of the Institute of North Korea and South Korea, Jilin University, deputy director of the Northeast Asian Research Center.