Domestic Industry Sighs in Relief as US-China Dialogue Mode Shifts

U.S. President Joe Biden (left) is holding a summit with Chinese President Xi Jinping via video conference on the 15th (local time) in the Roosevelt Room of the White House in Washington, D.C. This summit is the first to be held in 10 months since President Biden took office in January.

[Asia Economy Reporter Choi Dae-yeol] The domestic industry positively evaluated the virtual meeting held on the 16th between the leaders of the United States and China, where they agreed to increase communication to reduce conflicts between the two countries. Since the US and China are South Korea's overwhelmingly top two trading partners, significant damage is expected if South Korea is inadvertently caught up in the US-China hegemonic rivalry. Although the details of the summit were not specifically disclosed, the shift from confrontation to dialogue mode reduces the likelihood of being forced into divisive positions.

According to statistics from the Korea International Trade Association, China and the US account for over 40% of South Korea's overseas exports. Imports also approach 35%. Since President Joe Biden took office, the US has intensified efforts to restructure supply chains centered on its own country. China, meanwhile, has increased its influence beyond East Asia to the global stage, intensifying the US-China hegemonic competition. The confrontation between the two countries has mainly manifested as trade and commercial disputes, as seen in China's past rare earth export restrictions and the recent urea crisis in South Korea, where raw materials were used as leverage, and the US's moves to block Chinese companies' domestic investments. This is why the world has paid close attention to this US-China summit.

Jung Il, head of the Global Economic Cooperation Strategy Team at the Korea Chamber of Commerce and Industry, said in an interview with Yonhap News, "It is positive that the two governments have started dialogue based on cooperation and respect to avoid conflict," but added, "Since concerns remain about US-China hegemonic competition and global supply chain instability, we need to prepare response strategies to prevent damage to our companies."

An official from a major domestic conglomerate said, "The US and China are the world's largest markets and countries where Korean companies are most actively expanding, so if trade disputes escalate, companies inevitably suffer significant damage," adding, "Since the summit agreed to strengthen communication, I believe conflicts will not worsen."

There were also calls for South Korea to actively participate in issues where the two countries agreed to cooperate, such as climate change and energy supply crisis response. According to the White House, the two countries agreed to cooperate in these areas. An industry official said, "As the need to utilize new energy sources like hydrogen and renewable energy or to develop related technologies is likely to increase, our government and companies also need to take proactive measures."

This content was produced with the assistance of AI translation services.