South Korea ditches China for the U.S. – Why?

TL;DR Breakdown

  • South Korea is subtly shifting its economic focus from China to the U.S., reflecting geopolitical tensions and strategic choices.
  • The Biden administration is offering significant incentives to Korean companies in sectors like semiconductors and electric vehicle batteries.
  • China has retaliated with restrictions, sparking fears among Korean companies.

Description

The geopolitical landscape is shifting as South Korea moves away from China and aligns more closely with the U.S., a tectonic shift with potential consequences for the global economic balance. While the shift may seem gradual, it’s as clear as day and backed by hard facts. South Korea’s journey from being intertwined with China to … Read more

The geopolitical landscape is shifting as South Korea moves away from China and aligns more closely with the U.S., a tectonic shift with potential consequences for the global economic balance.

While the shift may seem gradual, it’s as clear as day and backed by hard facts. South Korea’s journey from being intertwined with China to becoming closer allies with the U.S. is a story of strategy, economic necessity, and a refusal to bow to pressure.

Facing east and west: A delicate balancing act

South Korea’s relationship with China blossomed after establishing full diplomatic relations in 1992, with trade between the two nations growing exponentially to more than $300 billion by 2022.

China’s booming technology sector leaned heavily on South Korea’s expertise in complex manufacturing processes, particularly in the semiconductor sector.

This helped South Korea carve out a robust economic partnership with Beijing while maintaining security ties with Washington. But, as the saying goes, all good things come to an end.

The acquisition of the U.S.-made Thaad anti-ballistic missile system by South Korea in 2016 shook China, leading to an unofficial economic blockade against Seoul.

South Korean brands were boycotted, tourism suffered, and the perceived threat to Chinese territory through the Thaad system ignited tensions. It was a stark reminder that separating economic issues from security matters was no longer viable.

South Korea’s economy, reliant on both China and the U.S., found itself in a delicate balancing act. New leadership in both the U.S. and South Korea breathed new life into the relationship between Seoul and Washington, but the path to alignment was fraught with concerns and uncertainties.

The $369 billion question: Opportunities and challenges

The signing of Biden’s Inflation Reduction Act last summer offered significant subsidies for Korean companies in clean energy and climate-related projects, a potential windfall that shifted Seoul’s focus towards the U.S.

However, the exclusion of vehicles assembled in Korea from tax credits exposed vulnerabilities in key industries like semiconductors and carmaking.

Simultaneously, South Korean companies had already started reducing their dependence on China. The rising costs of doing business in China, competition from Chinese rivals, and Beijing’s industrial policies compelled Korean firms to look elsewhere.

The shift of production from China to Vietnam, waning Chinese demand for Korean expertise, and Washington’s incentives made the U.S. a more attractive partner.

While this pivot may seem driven by external forces, it’s also a reflection of South Korea’s own critical analysis of its position on the global stage. The U.S. overtaking China as a destination for Korean investment as early as 2011 was no accident.

It represents Seoul’s strategic diversification away from a possibly domineering Beijing. It’s an assertion of autonomy, a refusal to be coerced, and a choice to seek new partnerships and opportunities.

Bottomline is South Korea’s realignment from China to the U.S. is neither a rash decision nor a simplistic reaction to political pressures. It’s a multifaceted strategy, shaped by a complex interplay of geopolitics, economics, and national security.

The true challenge for Seoul is to exploit this rapidly changing environment to its advantage while mitigating potential backlash. This pivot may be untrumpeted, but it’s unmistakable.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

文章来源于互联网:South Korea ditches China for the U.S. – Why?

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年8月2日 10:22
Next 2023年8月2日 11:39

Related articles

  • Voyager’s token move to Coinbase raises eyebrows

    TL;DR Breakdown Voyager Digital transfers substantial crypto assets to Coinbase. Transfers spark sell-off speculations within the crypto community. Previous patterns show Voyager divesting SHIB assets since 2023’s start. Description The cryptocurrency realm can often be as unpredictable as the currencies themselves. The recent move by the beleaguered crypto lender, Voyager, to transfer a sizable chunk of its digital assets to the behemoth exchange, Coinbase, has thrown the crypto community into a whirlwind of speculation. Did we just witness the initial steps of a company-wide … Read more The cryptocurrency realm can often be as unpredictable as the currencies themselves. The recent move by the beleaguered crypto lender, Voyager, to transfer a sizable chunk of its digital assets to the behemoth exchange, Coinbase, has thrown the crypto community into a whirlwind of speculation. Did we just witness the initial steps of a company-wide sell-off, or is there more than what meets the eye? Reading Between the Cryptographic Lines On August 11, Voyager, which is teetering on the brink of bankruptcy, shifted a significant stash of its digital treasury to Coinbase. The…

    Article 2023年8月14日
  • Spot Bitcoin ETF may not stir crypto markets, says JP Morgan

    TL;DR Breakdown JPMorgan analysts argue that approval of a spot Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC) won’t significantly change the crypto market landscape. Despite optimism around potential approval following recent filings by BlackRock, Invesco, and Wisdom Tree, spot Bitcoin ETFs have seen limited investor interest abroad in Canada and Europe, which could continue in the U.S. The introduction of spot Bitcoin ETFs could, however, cause a shift in trading activity and liquidity away from Bitcoin futures markets towards spot Bitcoin markets. Description Despite the buzz around a possible U.S. Securities and Exchange Commission (SEC) approval of a spot bitcoin exchange-traded fund (ETF), banking giant JPMorgan has doused the high spirits, expressing doubt in a recent research report on the game-changing potential of such a move. Limited influence despite renewed optimism While anticipation grows with asset managers like … Read more Despite the buzz around a possible U.S. Securities and Exchange Commission (SEC) approval of a spot bitcoin exchange-traded fund (ETF), banking giant JPMorgan has doused the high spirits, expressing doubt in a recent research report on…

    Article 2023年7月9日
  • ECB’s recent rate hike is likely the last, future moves dependent on inflation trends

    TL;DR Breakdown The European Central Bank (ECB) recently increased the deposit rate to 4 percent, with investors expecting this adjustment to be the last for the near future. There is uncertainty regarding how quickly price pressures might recede, especially due to the ongoing acceleration in wage growth across Europe. Spain’s Economy Minister, Nadia Calvino, believes the ECB is likely finished with its tightening monetary policy. Description Some of the more assertive members within the European Central Bank (ECB) foresee the potential for another increase in interest rates come December, contingent on a sustained rapid surge in wages and if inflation proves more stubborn than anticipated. The recent rate hike on Thursday, pushing the deposit rate to 4 percent, is widely anticipated … Read more Some of the more assertive members within the European Central Bank (ECB) foresee the potential for another increase in interest rates come December, contingent on a sustained rapid surge in wages and if inflation proves more stubborn than anticipated. The recent rate hike on Thursday, pushing the deposit rate to 4 percent, is widely anticipated by…

    Article 2023年9月16日
  • Russia’s crypto landscape sees major shift – What’s going on?

    TL;DR Breakdown Russia is taking a significant step towards embracing cryptocurrencies, with the Federal Tax Service (FTS) set to oversee the country’s crypto industry. Deputy Finance Minister Alexey Moiseev revealed this development, indicating a shift from Russia’s earlier conservative stance on cryptocurrencies. In a major departure from its traditional stance, Russia is shaping a new cryptocurrency landscape with a significant shift toward embracing the digital economy. The country’s tax authority is set to take the reins of this burgeoning sector, overseeing its operations and opening the gates for participants eager to explore the opportunities that cryptocurrencies offer. A new era of crypto regulation in Russia Deputy Finance Minister Alexey Moiseev, in a conversation with Izvestia Daily, revealed that the Federal Tax Service (FTS) would likely become the primary authority overseeing the country’s crypto industry. This move signifies a radical departure from Russia’s earlier conservative stance on cryptocurrencies, reflecting a realization of the potential that this disruptive technology holds. The legislative wheels are already in motion, with lawmakers working diligently to enact a series of laws pertaining to crypto assets during…

    Article 2023年5月18日
  • Singapore Bank DBS launches innovative e-CNY payment solution for customers

    TL;DR Breakdown DBS enables customers to accept e-CNY payments, boosting cross-border commerce efficiency. Project Guardian tests asset tokenization and DeFi in collaboration with renowned platforms. DBS partners with Marketnode and other institutions, solidifying Singapore’s leadership. Description DBS, the renowned Singaporean bank, announced today a groundbreaking development that allows its customers to accept payments in e-CNY, the digital currency issued by the Chinese central bank. In a major step forward, DBS has established a seamless system through which e-CNY can be directly settled into a company’s bank account, leveraging automated processes for … Read more DBS, the renowned Singaporean bank, announced today a groundbreaking development that allows its customers to accept payments in e-CNY, the digital currency issued by the Chinese central bank. In a major step forward, DBS has established a seamless system through which e-CNY can be directly settled into a company’s bank account, leveraging automated processes for efficiency and convenience. Remarkably, one of DBS’s customers has already completed a purchase using this innovative solution. This significant milestone stems from DBS’s collaboration with the Monetary Authority of Singapore on…

    Article 2023年7月7日
TOP