China's Bid for Supremacy in Chips and Batteries: Implications for Korean Policy

Eun Kyo Cho ()
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Eun Kyo Cho: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr

No 23/9, Research Papers from Korea Institute for Industrial Economics and Trade

Abstract: Acute tensions persist between the United States and China, and nowhere is this more evident that in the field of cutting-edge technologies and industries. Washington has expanded semiconductor sanctions against China while major European countries have sought to reduce their exposure to China-based supply chains. Beijing has responded in kind by imposing restrictions on exports of key raw materials. China’s efforts to curtail exports are not only a retaliatory response to US sanctions, but they are also a crucial part of China’s long-term strategy to strengthen its supply chains for its cutting-edge industries. China is reinforcing its existing strengths in semiconductor and battery production and internalizing core technologies in an effort to establish self-a sufficient supply chain ecosystem. Beijing, in other words, is increasing its long-term investments in core technology R&D to reduce reliance on foreign sources, while giving given primacy to domestic sources of raw materials. It is also leveraging its production capacity, price competitiveness, and large domestic consumer market to its advantage. Chinese firms are competitors with Korean peers in key industries such semiconductors, batteries, and others. Critically, Korean industries depend upon China for critical materials and parts. It is therefore crucial that Korean policymakers not only to respond to China’s intensifying export controls, but also to establish a comprehensive and long-term industrial policy that can navigate China’s supply chain strategy. To that end, Korean must stay abreast of China’s evolving policies designed to foster its own cutting-edge industries and technologies and implement measures to prevent China from recruiting Korean experts. Korean needs to proactively address Chinese measures to lead next-generation technologies and markets by establishing more self-sufficient ecosystems for emerging technologies in the Korean semiconductor and battery industries.

Keywords: US-China conflict; Chinese industry; Chinese technology; intellectual property; technological competitiveness; supply chains; supply chain strategy; semiconductors; batteries; chips; next-generation technology; technological development; economic security (search for similar items in EconPapers)
JEL-codes: F02 F10 F13 F15 F50 F51 F52 L60 L63 O32 O34 O38 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2023-07-23
New Economics Papers: this item is included in nep-cna
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