China, South Korea make supply chain pledge as Seoul eyes US chip alliance

Meeting between foreign ministers is the first high-level visit by a South Korean official to China since South Korean President Yoon Suk-yeol took office in May
The vow comes amid concerns that Seoul may risk business ties with Beijing by joining ‘Chip 4’ group with US, Taiwan and Japan

US-China relations

Laura Zhou

Published: 4:01pm, 10 Aug 2022

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China and South Korea vowed to strengthen ties and maintain stable supply chains amid the growing rivalry between Beijing and Washington.

The pledge was made on Tuesday when Chinese Foreign Minister Wang Yi met his South Korean counterpart Park Jin in the eastern Chinese city of Qingdao.

“Globalisation has encountered adverse currents, and some countries have politicised the economy … undermining the stability of global production and supply chains,” Wang was quoted as saying in a Chinese foreign ministry statement.

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“China and South Korea should jointly resist such acts that violate the laws of the market, and jointly maintain the security and stability of production and supply chains in the two countries and the world.”

The South Korean foreign ministry said the countries agreed to increase high-level communication on supply chain issues, climate change cooperation and cultural exchanges.

It was the first high-level visit by a South Korean official to China since the inauguration of South Korean President Yoon Suk-yeol, a former top prosecutor who signalled stronger ties with the US and called for a tougher approach towards China and North Korea during his campaign.

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Both Beijing and Washington have stepped up efforts to consolidate their own diplomatic alliance networks after US House Speaker Nancy Pelosi defied Beijing’s warnings and visited Taiwan, a self-ruled island that mainland China considers as part of its territory to be taken back under its control, by force if necessary.

Neither Beijing nor Seoul mentioned Pelosi’s trip in their statements, but Wang said both nations should maintain independence in their policymaking without the interference of other nations.

“The Chinese side is willing to work with South Korea to adhere to the positioning of the strategic partnership of cooperation determined by the two sides and promote the healthy and stable development of China-South Korea relations,” Wang said.

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South Korea has been trying to tread carefully between the US – its treaty ally – and China, the top destination for South Korea’s exports. Last year, 60 per cent of chips produced in South Korea were sold to China.

Yoon, who was on holiday when Pelosi visited Seoul last week, did not meet the US congresswoman but spoke to her by phone. South Korea’s presidential office has denied accusations that Yoon was avoiding the meeting to placate China and said Yoon’s summer holiday was planned before Pelosi’s visit.

Before his departure on Monday, Park told reporters that he would also clarify Seoul’s position on the so-called Chip 4 semiconductor alliance with the US, Taiwan and Japan, after the South Korean government reportedly agreed to join a preliminary meeting of the group later this month or in early September.

There have been growing concerns that South Korea may risk its business ties with China by joining the alliance, which Beijing could view as part of Washington’s containment efforts to exclude China from the semiconductor value chain.

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South Korean officials have repeatedly said the chip alliance was not aimed at China. On Monday, Yoon also tried to play down concerns about possible sanctions from China and said his government would make national interests a top priority when considering Seoul’s participation in the partnership.

Yoon also expressed interest in hosting more US-built Terminal High Altitude Area Defence (THAAD) system units to defend itself against threats from North Korea.

Beijing has considered the anti-missile system a threat to its national interests and has long opposed THAAD deployment.

When Seoul first agreed to deploy the system in 2016, Beijing imposed unofficial sanctions, including bans on Chinese tour groups to South Korea, which had a devastating effect on the country’s tourism, cosmetics and entertainment industries.

Ties between the countries only improved in recent years, partly because of their respective disagreements with former US president Donald Trump’s “America first” policy.