Surviving the perennial hegemony war

Chung Jae-hong
The author is international, diplomatic, and security news editor of the JoongAng Ilbo.

On Oct. 17, the U.S. Department of Commerce extended its export ban on China-bound chips to those that power artificial intelligence. The Department of Commerce took action after Nvidia, a U.S. chipmaker, developed and exported its slower AI chips to China after the department restricted exports of advanced AI chips last October.

In a tit-for-tat, Beijing announced on Oct. 20 that it would control exports of graphite — an essential element in the production of secondary batteries — starting December. The measure can deal a heavy blow to electric vehicle and battery companies around the world, as China is the top graphite producer and refines more than 90 percent of the mineral, which is used in nearly all EV batteries. It is a major upset to Korea, which entirely relies on Chinese graphite for battery and EV production.

The latest skirmish in the tech war between the United States and China came ahead of the Asia-Pacific Economic Cooperation (APEC) leaders’ meeting in San Francisco slated for Nov. 11 to 17. Chinese President Xi Jinping is expected to meet the U.S. host, President Joe Biden. Regardless of recent signs of thawing in bilateral relations, the contest over technology only intensifies.

U.S. President Joe Biden, right, and Chinese President Xi Jinping meet on the sidelines of the G20 Summit in Nusa Dua on the Indonesian resort island of Bali on Nov. 14, 2022. [AFP/YONHAP]

The de-risking led by the United States to challenge the Chinese dominance in global supply chains is expected to be most detrimental to the Korean economy closely connected to China. According to the International Monetary Fund (IMF), the deepening of the de-risking could whittle away nearly 4 percent of the Korea’s GDP, far above the harm of around 1 percent for Japan and the European Union.

China became a primary target under Biden’s presidency. His predecessor Donald Trump was hostile toward China, but his actions had limitations due to less backing from the federal government and the rest of the world. In the 2022 National Security Strategy report, the Biden administration referred to China as “the only competitor to the United States with the intent, and increasingly, the capacity to reshape the international order.” It outlined all-around economic, security and political measures to counter China and called upon allies and partners to join its move. It trotted out China-isolating laws such as the Inflation Reduction Act, and strengthened regional alliances like the Quadrilateral Security Dialogue with Japan, India and Australia, the CHIP 4 with chipmakers Korea, Japan and Taiwan, the Aukus partnership with the United Kingdom and Australia, and the Indo-Pacific Economic Framework, all to buttress the front against Beijing.

In spite of fierce political sparring between the Democrats and Republicans, U.S. politics is not divided on containing China. The policy is expected to survive, regardless of who wins the next presidential election. The Republicans are extremely divided among themselves, as underscored by the far-rightists dismissing their colleague from the House speaker position. If former president Trump beats Biden in November, protectionism and the U.S.-first policy will deepen under a far-right president.

China under Xi is unwavering against the U.S. offensive. Wielding the mightiest power since Mao Zedong, Xi is pressing with the dogma called “Socialism with Chinese Characteristics for a New Era,” believing China will prevail over America to become the world’s top country. He envisions a “xiaokang” (moderately prosperous) society, where all Chinese can live in abundance and comfort, and the achievement of the China dream.

But the Marxism-based theory is often detached from a harsh reality. The censorship on internet platforms as well as education, cultural and entertainment contents for going against the Chinese one-party autocracy — and Xi’s shared wealth principle — are killing the industries. The stringent zero-Covid policy caused unnecessary costs and pain because the policy placed totalitarian interests over individuals’, politics over economy, and ideology over reason.

A cooperative relationship between the two largest economies would serve Korea well due to its heavy reliance on external trade. But now that it is just wishful thinking, Seoul must quickly come up with a strategy to deal with the paradigm of persistent conflict between the two superpowers. Seoul needs strong ties with Washington under the imminent nuclear and missile threat from North Korea. Thanks to the proactive rapprochement with Japan under the Yoon Suk Yeol administration, Seoul has mended its relations with Tokyo, helping cement the U.S.-led trilateral alliance. The government must keep up its amicable ties by wisely addressing tricky issues over wartime labor compensation and the Fukushima nuclear wastewater release.

But South Korea cannot neglect its relationship with Beijing as China remains a major trade partner. To broaden its room to maneuver, Korea must enhance its cooperation with like-minded governments of the EU, Australia and Canada. Foreign policy should be based on national interests and public consensus, not ideology, so that it does not tilt toward Washington or Beijing depending on the ruling power.