South Korea! Leave China behind and Advance on India & SEA
Korean companies must challenge new the business world order to survive. South Korea has a strong domestic economy and has some of the leading technology companies.
Now, previous success won’t guarantee success in the future. We are expecting a generation that will have the ability to create new and shiny things.
There is no longer continuous growth in this new era, even for major companies like Samsung or other leading Korean companies
The US-China trade deal has broken down and G2 is standing off by imposing duties each other. US maintains its stance on China, by claiming that China should stop extortion of IPs, compulsory technology transfer and provision of government’s subsidies as it provokes unfair competitions with other nations.
When the Japanese government finally nationalized Senkaku Islands which had been embroiled in a territorial dispute 2012, violent anti-Japanese protests broke out in China. As a result, losses of Japanese firms in China amounted to over U$100 million and Japan’s export to Chine quickly dropped by U$6,758 million. In consequence, Korea topped the market share of imported goods in China, beating out Japan.
Thereupon, the Japanese government immediately prepared multilateral countermeasures such as compensation of goods and services, numerous inducements from the central government and development of alternative markets. Some firms withdrew their investments from China and chose to transfer business to SEA or return to their homeland. Irrespective of China’s anti-Japanese sentiments, Japanese firms clenched their tooth and attacked the China market more meticulously.
Firms of Korea, Japan and Taiwan have extended their existences in South-Eastern Asia markets to reduce its dependence on the China market for the last few years.
Since Korea and US decided to deploy the THAAD in the Korean peninsula, Chinese authorities took retaliatory measures including no chartered flights to Korea, no subsidies for vehicles equipped with Korean batteries, and business suspension against Lotte Mart, following a ban on the Korean Wave.
Now time has come for Korean firms to accelerate its advance on ASEAN nations with 630 million populations and India having world-top populations in 7 years. Korean firms had already started the investment into SEA nations a few years ago and Korea’s ODI into ASEAN nations surpassed that into China as of 2014.
The nation most invested by Korean firms is Vietnam. Korean firms’ entry into Vietnam is expanding up to every field of industries such as electronics, steel, construction, and services including finance, law, etc.
Lotte, the worst victim of a THAAD conflict between Korea and China is also a representative firm knocking on the Vietnam market. Lotte is strengthening its marketing focusing on a middle class of Vietnam which shows an outburst recently. Hence, now is the best time for firms to launch a project which aims to extend the export market of Korea to SEA. Korea needs to devote all one’s energy to developing the market in Singapore, Thailand, Vietnam, Cambodia, Indonesia, Malaysia and Myanmar.
Let’s advance on South Asia including India, Sri Lanka and Bangladesh.
Korea must learn lessons from Japan and Taiwan having experienced China’s economic retaliation earlier.
When a territorial conflict with Japan over Senkaku Islands became an issue 2010, China gave economic retaliation such as an embargo on rare-earth resources, rare metals essential for electronic devices. China also reined back Chinese tourism to Japan and investigated Toyota Motor for the bribery charge. When the Japanese government declared nationalization of Senkaku Islands 2012, China even launched the boycott campaign against Japanese products. Those events served as a momentum for multinational corporations of Japan to migrate to SEA.
Japanese firms began to move their production bases in China to SEA.
For Taiwan, China imposed economic sanctions such as a ban on Chinese tourism to Taiwan as soon as Tsai Ing Wen; a presidential candidate won the election.
It was reported that the number of Chinese tourists to Taiwan had decreased by 55% compared to the previous year.
Taiwan also paid attention to SEA. Taiwan made a lot of effort into development of new markets, introducing a visa waiver program for the Thai, etc.
The ratio of Taiwan’s ODI into China once reached 84%, but presently it has dropped to 51%. On the contrary, the ratio of Taiwan’s ODI into SEA has doubled during 2011~2015. Now, the ratio is 15%, having jumped from only 6% during 2006~2010.
Here are few serious questions to ask to Korean firms having entered into China.
Has China accomplished the satisfactory national interest that it expected, through economic retaliation on Korean firms?
Has China truly advocated Korean firms’ interest as a partner?
Has China, as a partner, truly protected those technologies given by Korean firms?
Now, Korean Fleets! Leave China behind and Advance on India & SEA!
China’s Game in the Arctic: A Tale of Deception?
In the past years, the Arctic has been drawing attention for the economic, strategic, and geopolitical implications that are deriving from its exposure to increasing temperatures. As the thawing of its ice cap, increase in sea levels and loss of ice gives rise to environmental concerns, this scenario has opened the door to both, new opportunities and tensions. The region that proved to be of tremendous importance throughout the Cold War, serving as a frontier between the Soviet Union and NATO and becoming one of the most militarized regions of the world (Huebert, 2019, p. 2), is remerging as a strategic trigger point. On the one hand, its untapped natural resources make it appealing for geopolitical and economic reasons. The presence of non-combustible minerals, industrial resources and the sea lanes of communication (SLOCS) that surround the region, together with the improved conditions for its extraction have caught the attention of neighboring States (Sharma, 2021). In fact, the projected volume of the Arctic’s undiscovered oil and gas reserves is believed to amount to 22% of the world’s undiscovered resources that can be harvested with the existing technology (Turunen, 2019). Thus, the access to these resources has the potential to ensure energy security for those States with legitimacy for its exploitation. On the other hand, the current climatic conditions have cleared the way for new navigational routes in the region. Whereas maritime routes such as the Northwest Passage (NWP) and the Northern Sea Route (NSR) are only operational for few months of the year, researchers have estimated that by 2040-2059 they might be free from Arctic ice (Smith & Stephenson, 2013). Hence, the commercial viability of the, so called, “polar Mediterranean” (Roucek, 1983) can minimize by almost a half the shipping time and maritime distance travelled between East Asia and Western Europe via the Panama or Suez Canals (Herrmann, 2019).
In this power play, with the Arctic attracting the attention of States that are quite far from the region, tensions regarding its governance are surfacing. Differently to what happens with Antarctica, the Artic is not a global common and no treaty regulates its legal framework. Aiming to ensure their claim over the region, the original Arctic Five (Canada, Denmark, Norway, Russia and the United States) issued the Ilulissat Declaration, which reiterated their sovereign rights and jurisdiction over large areas of the Arctic Ocean (Sharma, 2021). This gave rise to questions concerning the rights left to non-Arctic nations to influence the region. Whistle this question remains unanswered, China is creeping into the region.
Since the Asian country conducted its first Arctic expedition, in 1999, and built its first research base, known as the “Yellow River Station” in 2004, it has progressively increased its investment (Lean, 2020). Nevertheless, from 2010 onwards, its pursue to be acknowledged as an Arctic stakeholder placed the region high in its foreign policy agenda. In 2013, its strategy began to pave the way for its endeavor and the PRC went from being a peripheral partner to being granted observer status in the Arctic Council (Chater, 2021). Little after, in 2018, Beijing published a white paper titled “China’s Arctic Policy” wherein it is described as a “near-Arctic state”, marking the first steps of its statecraft efforts to shape the region to its advantage (Lean, 2020). Thereafter, Beijing’s policy towards the Arctic is based on multilateral alliances and win-win gains between the players involved, which could eventually support China’s claim overt its legitimate presence in the region (Hossein, 2019, p. 4). In this regard, the State’s involvement in the Arctic has been directed at expanding its footprint in the economic and scientific fields. Pertaining to the former, in 2013 “MV Yong Sheng”, a Chinese commercial ship embarked on the first trip from a Chinese port to Rotterdam via the NSR (Jian, Thor & Tillman, 2018, p. 347). Ever since, Russia and China have collaborated closely to benefit from the melting of the Arctic and establish a safe and commercially viable transport corridor through the NSR (Lean, 2020). These ambitions were crystallized with the release of China’s “Vision for Maritime Cooperation Under the Belt and Road Initiative” in 2017, thereby reaffirming its desire to extend the BRI to the Arctic so as to connect Europe and Asia trough what was labelled as the “Polar Silk Road” (Manenti, 2017). Arctic shipping routes are estimated to be 40% cheaper than traditional ones (Baldassarri, 2014) and bearing in mind that the Asian country executes 90% of its trade through maritime transport, the advantage is considerable (Hossein, 2019, p. 4). Moreover, the diversification of routes might bring an end to China’s “Malacca Dilemma”. This refers to the vulnerability to a naval blockade and the lack of alternatives that China has to endure as consequence of the deteriorating relations with India and the power that the US Navy exerts over the Strait of Malacca, which currently accounts for 80% of its trade with Europe (Paszak, 2021). Similarly, China’s scientific research and cooperation with Arctic countries is a core component of its policy towards the region. Seeking to strengthen its legal right to expand its role and access to the Arctic, Beijing has resorted to science diplomacy (Sharma, 2021). Since purchasing the Xuelong icebreaker in 1993, the PRC has conducted more than 12 expeditions (Xinhua, 2021) and has strengthened the maintenance and construction of research, ice and satellite stations, vessels, icebreakers and other supporting platforms in the region. However, there might be more to it than scientific research.
The belief among Chinese strategists and scholars that the US is using the Arctic as a, yet another, front in its anti-China containment and concerns over the increasing security competition make China’s scientific interest in the region something that seizes no small amount of attention. Thereafter, while Chinese expeditions might be disguised as purely civilian research, a closer scrutiny reveals the dual implications (civilian and military) of most of its research programs (Lean, 2020). As an example, the People’s Liberation Army Navy decision to dispatch vessels to Arctic and US waters, including a fleet oiler, surface combatants, amphibious warships and a guided-missile destroyer and frigate, among others, together with the recourse to polar-orbiting military satellites, fails to justify their supposedly “purely civilian aspirations” (Dale-Huang, Doshi & Zhang, 2021, p. 29). In a similar manner, the testing and deployment of dual-use assets such as underwater robots, buoys for monitoring air-sea interactions, cloud-based online platforms, autonomous underwater glider and polar fixed-wing aircrafts evidence how Beijing is working towards its autonomy from foreign satellites and stations for Arctic data (Lean, 2020). What’s more, there are signs that herald China’s desire to invest in nuclear-powered icebreakers, which could ultimately lead to the transfer of that technology to military vessels (Dale-Huang, Doshi & Zhang, 2021, p. 30). Thus, the ongoing “weaponization of science” by the PRC has raised the alarms among Arctic littorals which have condemned the dual purpose of its activities (Buchanan & Glaser, 2022).
At this point, the question of whether Chinese ulterior motives for accessing the Arctic are realistic and attainable might come up. In this regard, everything seems to suggest that Beijing’s interests in the region are likely long-term. It is important to bear in mind that the Arctic is not the South China Sea, its number one priority together with Taiwan, with which the PCR has historic ties and is exercising a more aggressive policy. Moreover, the aftermath of the covid pandemic and its economic headwinds have slowed down operations in the region. Nonetheless, China still wants a seat at the table in deciding the Arctic’s future and, therefore, is expected to persist with its pursue of dual-use scientific research and protection of commercial interests. In fact, part of its strategy might be to quietly keep on establishing itself as a near-Arctic state, similarly to what it first did to advance its territorial ambitions towards the South China Sea (Grady, 2022). In the midst of the increasing tensions between Beijing and its Western counterparts the future of its Arctic agenda will presumably become “ever more salient to the future of trade, sustainable development, and international security” (Buchanan & Glaser, 2022). As a matter of fact, the best example of the seriousness with which major players in the region are reacting to China’s advance in the Arctic is found in the shift of the US Arctic policy. The new strategy released in October 2022, which complements NATOS’s, calls for the enhancement of military exercises, the expansion of the US’ military presence in Alaska and NATO States and the compromise to rebuild its icebreaking fleet (Grady, 2022). Few months later, in February 2023, US-led military exercises in the Arctic, hosted by Norway and Finland, brought together more than 10,000 military personnel from the UK, US, Germany, Denmark, the Netherlands, Norway and Finland (Bridenthal, 2023). Likewise, Denmark, owing to what the country’s Foreign Policy has described as “a new geopolitical battlefield”, has reviewed its security policy, increasing its military budget with the “Arctic capacity package” aimed at intensifying surveillance with radar, drones and satellites (Grady, 2022). In this increasingly assertive scenario, that resembles that of the Cold War, the Arctic is swiftly emerging as a region of militarized power politics.
China’s Ascendancy and its Influence on Global Structure
The rise of China is, without a shadow of a doubt, one of the most significant geopolitical movements that have emerged in the twenty-first century. This transformation of a civilization that was mostly agricultural into a worldwide economic powerhouse has had a great impact on the existing order of the international system, with repercussions extending from the economic sphere into the geopolitical sphere as well as the cultural sphere.
As a direct consequence of China’s progress, the global economic environment has been subjected to a fundamental adjustment. As a result of its fast industrialization and vast population, it has established itself as the world’s leading exporter and the world’s second-largest importer. China has been able to exercise a significant amount of influence on global trade and financial institutions as a result of its size and economic weight. As a result, China is often in a position to dictate the terms of trade agreement conditions and decide the course of global economic policy. In addition, China’s ambitious Belt and Road Initiative, which seeks to build a modern-day Silk Road by creating land and sea trade links between Asia, Africa, and Europe, implies that Beijing plans to strengthen its economic domination worldwide. The Belt and Road Initiative aspires to create a modern-day Silk Road by constructing trade connections between Asia, Africa, and Europe.
The growth of China has caused a shift in the geopolitical balance of power, which has the effect of challenging the United States’ long-standing hegemonic position. As a consequence of China’s substantial investments in the advancement of its military technology and capabilities, other strong nations are worried about the nation’s intentions. Its belligerent stance in border conflicts, particularly those in the South China Sea, is a sign of the country’s rising military confidence. As China takes on more responsibilities inside international bodies and creates strategic relationships, especially with undeveloped governments, its diplomatic power has been growing at an impressive pace.
The emergence of China has also had a substantial effect on the country’s cultural traditions. The media, the language, and the culture of China are now having an outsized impact on other parts of the world. One indication of this cultural diffusion is the proliferation of Confucius Institutes, which are institutions committed to promoting the development of Chinese language and culture. This cultural impact is shown by the growing popularity of Chinese literature, cinema, and food on a worldwide scale.
Nevertheless, issues have been brought to light as a result of China’s ascent. Concerns have been raised over China’s compliance with democratic values, human rights, and international agreements, as well as concerns regarding China’s intention to overtake the United States as the leading superpower in the world.
As a result of China’s ascent to power, there are a few potential outcomes for the direction of the existing order in the world:
The United States and China would work together to maintain the existing order in the world and develop satisfactory solutions to the many urgent problems facing the planet in this potential outcome. The stability of the globe might be preserved by doing this, despite the fact that it would require considerable sacrifices on both sides.
Competition between the United States and China: If these two countries were to have a conflict, it would be much like the cold war all over again. Unpredictability and instability are some outcomes that might occur from such an event.
If China were to take over from the United States as the dominant force in the world, the existing system of international relations would experience profound upheaval. Even while it is hard to foresee the consequences of this scenario, there would unquestionably be enormous shifts in the power relations that exist on a worldwide scale.
The emergence of China has unquestionably had an effect on the rest of the world, notwithstanding the unpredictability that surrounds the country’s future prospects. As a result, it is of the utmost importance for countries all over the globe to devise strategies that will enable them to navigate this turbulent terrain with composure and success, so assuring a future that is both wealthy and secure for everyone.
China Expands its Reach to Europe and Africa
For decades, Iran was firmly within the US ambit, but then came the revolution. The Shah, whose family had ruled for over half a century, fled abroad. And following a failed attempt at parliamentary democracy, the Iran Revolutionary Guards led by their cleric masters took over.
While there are elections now and an elected government, the Supreme Leader Ayatollah Ali Khamenei sets the broad outlines of domestic and foreign policy. He also controls the judiciary and is head of the armed forces.
At present, Iran is further strengthening its ties with the Shanghai Cooperation Organization (SCO) through its observer status with a view presumably to eventual full membership. The SCO embraces almost all of Central Asia, the Indian Subcontinent and Sri Lanka. It is a vast bloc including the two largest developing economies in the world.
Japan and Taiwan have already expressed their trepidations at China exercising muscle along its littoral regions and the coastal islands down to the Philippines. Their principal concern is for the shipping lanes up which tankers bring fossil fuels to them from the Middle East.
There appears to be no concerted US policy to deal with these issues other than random acts of petulance. Thus the bombing of the Nord Stream pipelines exposed by the investigative journalist Seymour Hersh. It thwarted Germany’s desire for cheap Russian gas transported under the Baltic Sea from Russia to Germany. The result was a point or two drop in German GDP as it scurried to buy liquefied gas from the global market including the US.
If earlier, it had acquired half of its gas from Russia and a third of its oil,the invasion of Ukraine accelerated a move away from Russia. However, everyone is quite aware that when the Ukraine problem dies down, the gas and oil will still be in Russia as will Europe’s hunger for them and the added attraction of low prices. The multiplicity of routes including one via Turkey just across the Black Sea — more than one way to skin a cat as that awful expression goes — add to the temptations.
After all that has happened, is it any wonder Putin gave up on an impotent Europe and went east. So it is that China’s ravenous demand for energy in a fast-growing economy is to be supplied by its neighbor Russia.
China is also constructing roads (the Belt and Road Initiative) along Pakistan’s spine to its newly built (by China) port of Gwadar. It provides a direct road link from China. Of course, Pakistan is an old trusted friend and now dependent ally.
From Gwadar, the Gulf and the Gulf States are a stone’s throw away, and Africa just a hop, skip and a jump. China has been investing in Africa for quite some time and its entrepreneurs have been independently starting businesses there. Now travel just became that much easier — just a two to three day drive instead of the circuitous route across the Indian Ocean and up the Pacific coast.
Who wins? Who loses? It should not be difficult to discern.
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