Without the US's containment of China, China's semiconductor industry would have caught up with Korea's.

On the 17th, the "US-China Grand Outlook 2023" expert roundtable was held at the Federation of Korean Industries (FKI) Conference Center in Yeouido. 2023, a year marked by heightened business uncertainty amidst the US-China hegemony competition and economic downturn, brought together experts from various fields to discuss the future.

Professor Park Ki-soon of Sungkyunkwan University's Graduate School of Chinese Studies, who participated in the symposium, concluded that the conflict between the US and China has provided a windfall to the Korean semiconductor industry. He argued that the suppression of Chinese technology, which has persisted since the Trump administration, has helped maintain the semiconductor gap.

Since the US-China conflict, there have also been structural changes in Korea's foreign trade and industrial landscape. Professor Park said, “In the past, the trade balance between Korea and China seemed good because many Korean companies had advanced into China, but this was only raw material transactions between domestic companies.” He added, “Now that many companies have moved out of China, exports to China have decreased significantly, and going forward, we need to make efforts to penetrate the Chinese domestic market.”

Amid concerns about global inflation and high interest rates, a resurgence of COVID-19 in China, a real estate slump, and a weakening of recovery resilience due to various regulations and trade wars, experts have diagnosed that Korea faces external risks between the US and China.

Deputy Minister for Trade, Industry and Energy Jeong Dae-jin, who said that we must break away from the framework of having to choose between the United States and China, argued in his keynote speech that “it is not a matter of choosing between the importance of the Korea-U.S. alliance and our economic partner in China.”

On the other hand, there were also comments accepting de-China as a natural trend and cautioning against strategic ambiguity. Lee Tae-gyu, a senior research fellow at the Korea Economic Research Institute, said, “Artificial de-Chinaization incurs costs due to the adjustment of the US-China conflict, and efficiency should be increased through natural de-Chinaization.”

Former South Korean Ambassador to the U.S. Ahn Ho-young said, “The U.S. seems to be positioning its stance toward China somewhere between cooperation and competition, which could be advantageous for South Korea,” adding, “Striving for balance between the U.S. and China is no longer our strategy, and ambiguity could simultaneously arouse suspicion in the U.S. and disappointment in China.”
When asked whether China's semiconductor industry, which is under strong pressure from the United States, can achieve independent growth, Yeon Won-ho, head of the economic security team at the Korea Institute for International Economic Policy, revealed the trends in China's semiconductor industry by saying, "There has been a slight course correction recently."

China had previously focused on developing advanced semiconductor technology, but its momentum has recently slowed. Although YMTC announced the successful development of 200-layer NAND flash in August last year, it is reported that there are setbacks in the roadmap for developing advanced NAND products.

The United States added YMTC to its trade blacklist, blocking its export of equipment capable of producing NAND flash memory with 128 layers or more. This has cast a shadow over China's mass production of advanced 3D NAND flash memory.

On the other hand, the likelihood of China responding to the US by restricting exports of key minerals, such as rare earth elements, was low. Professor Park Ki-soon predicted, "China's economic disadvantage compared to the US is clear, so it will likely be limited to a passive offensive."

Park Tae-ho, director of the International Trade Research Institute at Gwangjang Law Firm, who chaired the forum, said, “This year will be truly difficult as the three major global economies of the EU, the US, and China are entering a simultaneous recession.” He added, “There are various downward factors, but the key question is how these factors will interact and manifest themselves.”

In his opening remarks, Kwon Tae-shin, Vice Chairman of the Federation of Korean Industries, expressed concern, saying, “With the global economic downturn expected, the government has forecast a growth rate of 1.6% this year.” He added, “Nearly 60% of CEOs anticipate worsening corporate management, and exports this year are expected to decline by 4.5% compared to the previous year.”