Earlier this month, South Korea’s tech conglomerate SK Group announced plans to invest $52 billion in the United States. Experts say South Korea is shifting its supply chain out of China, though more decoupling is still necessary.
SK Group’s move is just one of many large South Korean companies shifting supply chain investment to the United States this year.
A professor at the Korea Advanced Institute of Science and Technology, Chang Suk Gwon, said that South Korea has an excellent opportunity to replace China as a global supplier amid the U.S.-led supply chain restructuring. He said South Korea would be able to set up multinational joint ventures within the new alliance circle.
Chang said the intensified U.S.-China competition and China’s recent energy crisis has made electric car manufacturers worldwide consider shifting their battery supplies away from China.
“These [automakers] are looking for joint ventures with South Korean [battery] companies or to diversify their battery suppliers,” Chang said.
Chang described South Korea replacing China as a global supplier and establishing joint ventures with foreign companies as a win-win strategy for the companies involved.
“This way, South Korean companies and product manufacturers worldwide can form a closely integrated win-win structure,” Chang emphasized. He highlighted the SK Innovation-Ford joint venture BlueOvalSK as “a great example.”
Chang suggested that South Korea must produce more tech products domestically and open direct channels to the United States while decoupling from China. “We should diversify our exports and cease reliance on China,” Chang added.
Faced with the intensified competition between the United States and China, the Moon Jae-in government has yet to clarify its position. In an interview with The Epoch Times, Kim Seung Wook, an emeritus professor at Chung-Ang University in South Korea, said the government should be decisive in its stance with the United States and China.
“It is impossible to maintain diplomatic neutrality between two countries with different systems and values,” Kim said.” It is important to follow the public opinion when making choices.”
“The [South Korean] government should clarify its position.”
Kim added that many South Korean private enterprises are moving factories out of China to Southeast Asia and other places. Other countries are rapidly replacing China’s role as the world factory, and the global supply chain restructuring is underway.
