Korea is very much in the eye of the storm between US and China and we spent a session discussing this issue in depth on July 20th.  The second chance session allows those who missed the event to share in the discussion.  Also as a lot has happened since July 20th and a lot of debate about the future of Chinese growth, the revised slide set will incorporate this.

Business, the opposition and others are concerned about the impact on trade and investment with China already affected by the tilt to the US, IRA, the Chip Act and prohibitions or limitations on investment in semi-conductors.  On July 20 we were partly aided by a detailed examination of where Korean semiconductor exports go to in China and the Chinese content of Korean exports published last year by Peterson Institute for International Economics and commissioned by MOTIE.  Since then we have updated this material.

We note that In virtual parallel with the IPEF development process between the US and 14 countries including Korea, negotiations have continued with China on extending the China-Korea FTA into services and procurement and a draft MOU on supply chain between the two countries and on semiconductor business between China and Korea have been drawn up.  The 6 day Busan round of IPEF negotiations did not apparently lead to any break through.

The aim of the July 20 session was to try to assess the degree of reset necessary in our thinking about China for the rest of the 2020s and to try understand China’s side of the story in the evolution of relations with the US and how Korea should best react.  After the release of the Chinese Q2 GDP figures in mid July there has been a fierce debate over whether China is stalling or resetting.  I argue for a reset, but perspectives differ depending on geopolitical outlook, macroeconomic concepts and the outlook for real estate, and the question of debt and population decline and social change in China.  All these issues are considered in our discussion.

In the first slides the Korean update will now include comments and numbers on Korea’s rather unusual second quarter GDP results which came out this week.   Please join the discussion if you have time.  All members will be recommended to download the material as an update on the July 20 slide set.

Yours sincerely