Korea seeks 'practical’ economic strategy amid Sino-US rivalry: Industry minister

Seoul’s industry minister said Korea will further strengthen trilateral ties with the US and Japan for advanced industries’ supply chains while cooperating with China as key trading partners to navigate the intensifying Sino-US technology competition.

Industry Minister Bang Moon-kyu stressed the need for such „practical strategies” in an interview with Yonhap news agency in Seoul on Friday, as Korea faces challenges in striking a balance between the two global giants for security, industry and broader economic security. areas.

„The competition for technological supremacy between the United States and China is likely to continue. We must seek application by prioritizing national interests while adhering to our policies,” Bang said.

„Our basic position is to increase trilateral cooperation with the US and Japan, in particular, to ensure stable supply chains of the semiconductor industry. Given our economic structure, it is also necessary to continue cooperation with China. Trade portfolio,” he added.

China is Korea’s No. 1 trading partner, accounting for the largest share of Seoul’s total exports at 19.7 percent in the first nine months of this year.

Korea also relies heavily on its neighbor for key industrial commodities such as lithium and nickel, although the Seoul government has sought to reduce its reliance on China amid Sino-US rivalry and global uncertainties.

In the latest front in a technology war with the United States, China began imposing export restrictions on graphite, a key ingredient in electric vehicle batteries and other electronics, on Friday.

„Given the major implications of such moves on our trade and industry, we would like to create multiple communication channels with China for information exchanges and prior consultations, which is what I requested during my meeting with my Chinese counterpart last month,” Bang said.

During a meeting between Bang and China’s Commerce Minister Wang Wentao in San Francisco last month, the two countries agreed to establish a working-level discussion channel on such restrictive moves and to hold joint free trade agreement talks this week.

Speaking about the year-long deficit in trade with China, Bang called for new strategies to respond to changes in the two-way trade structure.

„China has made rapid technological advances, and it has surpassed Korea in other fields such as visual, artificial intelligence and quantum technologies. Such development has led to a decline in exports of components and intermediate goods to China,” Bang said.

„It is an urgent task for us to accelerate efforts to secure technological strength in advanced sectors, diversify our business portfolio by tapping into Vietnam, India, Indonesia and other countries, and expand our presence in the Chinese market with premium products and other high-end consumer goods,” Bang said.

Korea enjoyed a trade surplus of $62.82 billion with China in 2013, but this figure will shrink to $1.2 billion in 2022. Since October last year, Korea has experienced a monthly deficit in trade with China.

Intermediate goods accounted for 80 percent of bilateral trade and consumer goods took up less than 10 percent, government data showed.

Next year, Korea is expected to experience significant growth in exports, which will lead to the country’s overall economic growth amid weak consumption and investment, the minister said.

„Exports are likely to rise 6-9 percent in 2024 as exports of semiconductors are forecast to register double-digit growth,” Bang said. „If the Chinese economy makes a turnaround, this number will rise further.”

After a year-long decline, exports rebounded in October and further accelerated to a 7.8 percent annual expansion last month.

According to major economic institutes, the Korean economy is forecast to grow by more than 2 percent next year, compared with 1.4 percent this year.

This year marks the 60th anniversary of the designation of Trade Day, as the government first celebrated the country’s achievement of $100 million in exports in 1964.

Since then, exports have expanded exponentially, surpassing $1 billion in value in 1970, $10 billion in 1977, and $100 billion in 1995.

The country reached the $500 billion milestone in exports in 2011 and registered a record $683.9 billion last year, according to government data.

„For the past decades our economy has been driven by exports. Exports have been a relief pitcher for our economy as we have been able to overcome crises through overseas sales, and the strategy is still working,” Bang said. (Yonhap)