right up next we take a closer look at south korea's ship trade with neighboring china amid
washington's calls for source participation in its chip four lines for more on that i have professor
ojinsok at soon young women's university joining us joining me that is virtually
professor oh welcome thank you for connecting me right now professor we are well aware that
south korea's biggest trading partner is china could you start with some perspective on this
particular reality then yes uh it is true number one trade partner of korea is china and for the
first time in 30 years korea has recorded a trade deficit with china in 2020 korea expected 100
exported to 131 billion dollars to china our main three expert goods are integrated circuit
machineries and refined petroleum during the last 25 years the export to china have increased at an
annual rate of 11.1 percent uh however recently the trade suffers from china is showing sign of
cracks uh consecutive three months trade deficit uh in may june and july it's likely that the u.s
high-tech restrictions on china take a toll on korea's trade balance what is worried more is
the trade that they visit are not temporary but uh ramification of the structural change in the past
china was a stock in a labor structure importing intermediate growth auto materials from korea
and exploding complete product to third countries but china used to be the last resort for korea to
offset the deficit from other markets but now it is barely making any profit china is
changing into a high-tech manufacturer that can procure parts materials on its own by countries
korea imports an increasing amount of chinese second batteries for uh petrochemical product and
textile growth in this way a trade dependency between two countries uh from the perspectives
of supply chain is getting closer nowadays right i see and against that back to a professor some say
the chip industries of the two countries have become intertwined over the past 20 years and
cannot be separated do you agree uh partly but i do not agree totally if needed it can
be separable in spite of past integration of supply chain uh i'd like to talk about
economic safety a nation's capacity for economic safety and safety can be shown in two ways but
one is trade worth and the other one is trade negotiations no wonder trade negotiations are the
better because trade war is a painstaking game while trade negotiation is against taking gain
current cheap trade with our country is about 150 billion u.s dollar per year
and cheap trade with china accounts for around 30 percent i mean that 40 to 50 billion dollars per
year the cooperation between china and korea especially in the chiefs industry is very close
korea is in the upstream in most fields but now some korean cheap companies have a large number of
manufacturing china for production and then flash memory chip made by samsung electronics uh xi'an
factory account for more than 40 percent of its total land pressure for the samsung electronics
while 45 percent of sk highness total dram chip output is produced in uh usher uh the
trade relation between china and korea have come under heavy strain due to this whole considers
joining the prospective alliance thirty percent of membership expert of korea goes to china
on the other hand seventy percent of chinese chip imports uh comes from korea it is unlikely
to go into trade retaliation against korea's gym making industry instead it cannot be ruled out the
possibility of retaliation against korea's other industry or korea's advanced material industry
which is crucial for the chief supply chain right and staying with that then professor
how does south korea's potential participation in the u.s led ship alliance look to affect its
related trade with china then uh korea's export to china dropped in april highlighting the impact
that could be related to the lockdown in chinese cities uh having on the supply chain around the
globe around the region a divide under the nation suggested for the trusted value chain of our
alliance or a so-called chief four alliance the chief four is seen by beijing as washington's plot
to exclude china from the chief value chain china is particularly sensitive about korea
which is a key to beijing the semiconductor self-sufficiency tribe as a korean chief giant
of samsung electronics and sk highlights operate plant in china despite the fact that trade experts
knows the chain reaction of sumo solitary effect there is a possibility of trade detailation
against each other korea finds itself to engage in active diplomacy as it contemplated joining a u.s
coalition because it cannot afford to lose u.s technology and equipment
for manufacturing semiconductors at a press conference uh foreign minister
bachchan stressed the chief four coalition is not aimed at excluding a certain country
but it will it would rather be a conservative body with a view to ensuring cooperation
in securing a stable supply chain as for the issue of chief of participation i suppose the meadow
should be examined through the lens of national interest based upon mutual respect due to lockdown
the korean companies had the difficulties of supply chain destruction already it was china they
gave us a job of uranus solution shock already as china did not show mutual respect till now
it is necessary for us to keep tabs on global supply disruption of semiconductors the u.s made a
very attractive offer as alternative in this sense it is natural korea start to join in working level
meeting involving major chip making allied members along with the united states taiwan and japan
separately professor there is talk that the biden administration is considering a crackdown on
memory chip makers over in china what looked to be the broader implications of such a crackdown
uh trade attention over the tech sector different the usa is considering limiting achievement of
american tree making kimono memory chain makers in china including ymtc ymtc founded in 2016 uh
chinese uh chinese company account for about five percent of worldwide and end flash memory chip
production uh while uh u.s companies are western dieter stands about 13 percent and micron 11
micron and western data under pressure from ymtc's low price it don't move we'll see to protect the
only us memory chip producers uh western data corporation and micron technology which will
represent about a quarter of the nand chip markets it will mark the first usb throughout
export control to target chinese production of memory chips without specialized military
application representing a wide view of american national security uh this
crackdown if approved would involve borrowing the shipment of u.s chief-making equipment to
factories in china if the biden administration proceed with the move equals hurt korean memory
makers uh samsung electronics and then sk hynex that is because samsung electronics uh has two
big factories in china while sk hynix uh is buying intel corporations and fresh memory chip
manufacturing business in china also right i see i understand this next question might be quite
difficult professor but what do you propose to better tackle this dilemma of partaking in u.s
proposed partnerships amid china-dependent trade ties korea faces a dilemma whether uh whether or
not to join the u.s semiconductor alliance chief or not uh president yun has called for active
diplomacy uh with china youth prudence under a topic indicated a career scalpel calculation
over gains if any against losses from possible participation as korea's expert center the economy
would be hit hard if it blindly joined the u.s technology choking off of china
as several u.s backbone industries have been suffering a lot from the semi-conductor supply
chain disruptions uh in one part but uh it is to the point that the biden administration raised
the policy issue of a critical supply chain it's unnatural but on the other hand it is expected
despite increased u.s scrutiny i guess it's a too far as scenario for washington to seek a
complete decoupling basing in the semiconductor industry some experts thought that the
intensity of u.s action would be loosened after the u.s midterm election in handling the country's
key trade policies rather than seeking full-scale sanctions the united states would apply title
control in a more targeted and very limited way so korea could take a role over moderator in between
as china is the world's top semi-conductor consumers korean government has to count in
palace dynamics and complexities and to take a more cautious ascent because excessive chip
supply would also cause a serious impact to korean companies right and before you leave as professor
the union administration has vowed to better support the country's semiconductor industry
what are your thoughts on this intention as we seek economic security amid the volatile
global conditions a very good question uh when korea have only followed the u.s leadership
uh chief expert will be in danger uh harming uh 40 to 50 billion the trade volume per year with china
geopolitical dynamics and the landscape of trade is too fragile china is in the
middle of industrial transition and the world is getting divided into the bacterial trade world
supply failure of major raw material or what major parts are becoming more frequent so korea must
create a technological innovation network based upon international cooperation and co-prosperity
by focusing resources on value-added industries including material parts and equipment it is a
mission for us to keep competitiveness and to reconfigure the current trend uh trade structure
uh partially rated on certain products or certain regions i see all right professor
oh as always thank you very much for your time and your thoughts uh thank you for inviting me