US-China Decoupling Debate: A Key Global Issue As economic tensions between the United States and China escalate, the global economy is heading in unexpected directions. The term 'decoupling,' which we have become accustomed to hearing, is more than just an economic concept; it reflects the current zeitgeist, and its consequences are likely to leave a profound mark on interconnected global systems. However, intense discussions are underway even within the U.S. regarding whether decoupling is realistically feasible, or what strategic alternatives might exist. Major U.S. media outlets are addressing the issue of decoupling from contrasting perspectives. In an op-ed published on April 26 titled 'Economic Decoupling from China is a Dangerous Illusion,' Fareed Zakaria of The Washington Post (WP) argues that a complete economic disengagement from China by the U.S. is unrealistic. He contends that given the complexity and scale of the Chinese economy, completely excluding China from global supply chains is impossible and could even be counterproductive. Zakaria emphasizes that China accounts for approximately 28% of global manufacturing and plays a pivotal role in global supply chains across a wide range of sectors, including electronics, apparel, and machinery. In contrast, The Wall Street Journal (WSJ), in an editorial published the following day, April 27, argues that severing economic dependence on China aligns with U.S. national interests for both security and economic reasons. The WSJ editorial board criticizes China for stealing Western technology, engaging in unfair trade practices, and escalating security threats, asserting that complete supply chain separation in strategic industrial sectors is necessary to secure U.S. national security and economic superiority. This clash represents not merely a difference of opinion between two media outlets but also the broader policy conflict between liberals and conservatives within the U.S. This debate faced by the U.S. is not merely a domestic issue. Changes in relations with China, which plays a central role in global supply chains, are bound to have direct and indirect impacts on countries worldwide. This is especially true for countries like South Korea, which have industrial structures highly dependent on trade with China in sectors such as advanced technology, semiconductors, and automobiles. South Korea's exports to China constitute a significant portion of its total exports, and in certain industries, a substantial amount of intermediate goods for production are imported from China. Consequently, the U.S.'s strategic shift regarding China is likely to exert dual pressure on the South Korean economy and its businesses. Korean companies are compelled to make difficult choices, balancing U.S. security logic with the economic benefits of the Chinese market. Amidst these circumstances, some experts propose 'de-risking' as an alternative to 'decoupling.' De-risking involves reducing dependence on China in security and critical industries while striving to maintain the global economic system as much as possible. Zakaria's column also supports this approach, advocating for a cautious risk management strategy instead of full-scale disengagement to preserve global economic stability. This stands in stark contrast to The Wall Street Journal's stance, which advocates for complete severance, even at the cost of short-term losses. The de-risking strategy can be seen as a pragmatic compromise: reducing dependence on China in critical technology sectors and areas directly related to national security, while maintaining economic efficiency in general consumer goods or non-strategic sectors. Some developed countries, including the European Union, are also exploring similar approaches, pursuing policies that simultaneously aim for supply chain diversification and economic security. De-risking: The Persuasiveness of an Alternative Approach However, critical views also exist. The Wall Street Journal warns that de-risking itself might appear too lenient towards China, and economic engagement could, in fact, grant the Chinese government more leverage. They point to China's technological espionage and unfair trade practices, arguing that there is no realistic alternative to decoupling to escape these threats. The WSJ's editorial particularly expresses concern over China's potential to acquire advanced technology through state-led initiatives and repurpose it for military use, urging complete separation in strategic technology sectors such as semiconductors, artificial intelligence, and quantum computing. This is analyzed as one of the reasons why hardliners within the U.S. advocate more strongly for decoupling. So, what position should South Korea adopt amidst this global confrontation? South Korea faces the complex challenge of maintaining its economic stability and industrial competitiveness without leaning too heavily towards either the U.S. or China. Domestic economic experts
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