National security and business more closely connected, Hong says

Economy

National security and business more closely connected, Hong says

Published: 18 Oct. 2021, 16:40 Updated: 18 Oct. 2021, 18:53

Finance Minister Hong Nam-ki opens the government's first meeting on the economy and national security at the government complex in Seoul on Monday. [YONHAP]

Communications between Korean companies and the government will increase as the technology rivalry between China and the United States heats up, Finance Minister Hong Nam-ki said.

He added that the autonomy of the companies would be defended as the country faces pressure from both sides.

“We will monitor industries at home and abroad as well as movements in major countries including the U.S.,” Hong said during an economy and national security strategy meeting held Monday.

The Korean Finance Minister stressed that fostering and protecting technological development in a time of technological hegemony is an issue that intertwines industry, trade and national security.

“Recently various uncertainties, including the uneven pace of recovery among countries, disruption in the global supply chain and global inflation caused by the supply shock, are becoming worse,” Hong said

“Analyzing all angles and the introduction of comprehensive measures are needed more than ever as global issues are becoming more complicated with countries battling for technological hegemony,” Hong said.

The economy and national security are now more closely connected than in the past, he added.

“It is becoming evident that a high-level of strategic judgment on a national level not only in economic positioning but also in terms of the perception of national security is needed,” Hong said. “The Korean government’s steps will be based on cooperation between the two countries.”

The meeting was held after U.S. government last month requested semiconductor suppliers disclose confidential business information.

U.S. Commerce Secretary Gina Raimondo raised the possibility of invoking the Defense Production Act, which would require semiconductor manufacturers with operations in the U.S. to comply with the request.

While the U.S. government insists that the information is needed to solve the current semiconductor supply shortage, Korean companies as well as other semiconductor manufacturers have raised concerns about revealing sensitive information.

The list includes inventory, orders and sales. One of the biggest concerns is exposing clients, which could include customers in China.

The U.S. government in recent years has been tightening its restrictions on semiconductors and chip technology supplied to China.
And that pressure has continued under Joe Biden’s administration.

Korean tech companies in May promised $39 billion of investment in the U.S. during President Moon Jae-in’s visit.

China’s economy grew 4.9 percent in the third quarter on year, compared to 7.9 percent growth in the second quarter. The result was below the 5-percent market consensus.

China is Korea’s biggest trading partner, with exports to the country accounting for 25.8 percent of the total in 2020.

Slowing growth in China could affect Korea’s recovery.

While the International Monetary Fund last week lowered its global economic growth projection for this year from 6 percent in July to 5.9 percent, it kept the Korean GDP growth estimate unchanged at 4.3 percent.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]