Korean Right-Wing Media: The End of the "An-Me Economy" ... "Need to Respond to China's Technological Rise with the South Korea-US Manufacturing Alliance"
On the 25th local time, South Korean President Yoon Suk-yeol stated: "The current 'An-Me economy' (security relying on the US, economy relying on China) route is no longer feasible." These were words spoken during a speech given after his first summit meeting with US President Trump, in response to a local invitation. This may be diplomatic rhetoric, but it is also an honest acknowledgment of the reality that South Korea's economy is at a crossroads. Yoon Suk-yeol said: "South Korea can no longer rely on the US for security as before, while obtaining economic benefits from other places (China). Recently, the supply chain restructuring centered around the free world and China has officially begun, and South Korea will find it difficult to act against the basic policies of the US."
On the same day, Korean companies announced a $150 billion investment plan in the US, covering areas such as automobiles, robotics, next-generation nuclear power, and aviation. Professor Kim Byung-chul, a special professor at the Department of Economics, Seoul National University, said this is "a new manufacturing alliance concept initiated by the US to seek to decouple from China's supply chains and attract South Korea and other allied countries' manufacturing sectors." In other words, the competition between the US and China and the supply chain crisis have opened up the "economic security" era.
The core of the US-led economic security is "if you don't invest in the US, you won't have the opportunity to enter the US market." For Korean companies, besides making large-scale investments, there is no other choice to access the US market. At the same time, due to a series of pro-labor legislation at home, the uncertainty of operations is expanding. Enterprises facing low growth are forced to consider "moving out of South Korea." Experts say: "The new manufacturing alliance contains both opportunities for South Korea's global economic expansion and factors that could lead to industrial hollowing out."
Crisis and Opportunities of the New South Korea-US Manufacturing Alliance
Director of the Korean Economic Research Institute, Jeong Cheol, believes this is an "opportunity." He said: "Some people worry that if we invest in the US, will jobs in South Korea disappear? But under the current trade environment, if South Korean companies do not invest in the US and only increase domestic investments, where will their products be exported?" This means that in the context of intensified competition with China, if we only increase domestic investments and production, we will fall into "excess production without export markets." Jeong Cheol said: "From this perspective, investing in the US can become the foundation for strengthening domestic business."
Some analyses believe that the new manufacturing alliance is an opportunity to enhance the competitiveness of South Korean manufacturing. Professor Kim Byung-chul said: "If the US continues to contain China for a long time, for South Korea, this will become an opportunity to widen the gap with China, which is constantly improving its technology." Professor Kim Byung-chul said that to seize this opportunity, "South Korea should not just transfer manufacturing to the US, but should think about how to internalize the US's design and engineering technologies." Professor Lee Jung-dong from the College of Engineering, Seoul National University, said: "It is important to utilize South Korea's advantage in multi-industry integration and combine AI (artificial intelligence) with manufacturing. South Korea-US cooperation will become an opportunity for South Korea to ensure international leadership in AI manufacturing."
"Investing in the US helps the domestic economy"
There are also many opposing opinions on this. Some are concerned that domestic industrial hollowing may accelerate. Professor Heo Jeong (音), President of the Korean International Trade Association, said: "The US not only wants to solve the problem of assembly plants in its own country, but also wants to solve all issues such as materials, parts, and equipment. Unlike previous investments in China, investments in the US have a strong nature of reducing domestic investments in South Korea. Most importantly, the distribution of profits from US investments is still unclear." In other words, how to handle this part in future negotiations will become a major burden. Professor Heo Jeong said: "If the phenomenon of industrial hollowing in the southeastern manufacturing clusters such as Busan and Ulsan accelerates, even if an alliance is formed, we will face difficulties, which is the problem."
Experts said: "To prevent investments in the US from causing industrial hollowing in the domestic sector, the government urgently needs to work to bring profits earned overseas back to the domestic market, thus forming a virtuous cycle of growth." That is to say, the domestic investment environment must be improved and the sustainability of the South Korean economy must be enhanced.
Jeong Sang-ji, Director of the International Trade and Commerce Research Institute at the Korea Trade Association, said: "Large enterprises capable of entering the US market can gain greater development space by enhancing their global competitiveness, but small and medium-sized enterprises that cannot enter the US will eventually see their gap with large enterprises widened. To narrow the gap and turn South Korea-US cooperation into an opportunity, the key lies in maintaining the foundation of high-end manufacturing domestically and establishing a virtuous cycle structure that creates quality jobs."
Source: Chosun Ilbo
Original: www.toutiao.com/article/1841665147470873/
Statement: This article represents the views of the author."