In the early 21st century, China became a big player in the worldwide manufacturing market. On the basis of its massive manufacturing industry, China is developing cutting-edge technology to become a leading participant in the 4th industrial revolution era. China has already become an influential country in the world beyond Asia. Nowadays, the USA and China are called ‘G2’ in a global society. It means that China has reached a level comparable to the US in the economic, financial, and industrial sectors. Those G2 nations make a financially symbiotic relationship to help each other in the global market.
However, a conflict arose in March 2018. The US and China started to engage in a so-called trade war in the spring of 2018. The US and China imposed 25 percent tariffs on each other, which amounts to more than 50 billion dollars. Sometimes, those trade regulations were eased through G2 summits and delegation meetings. However, this trade war is still going on through the many turnovers. Best partner countries can turn into enemies in a flash.
While the worldwide trade war was going on, the US prosecuted Huawei, the largest Chinese telecommunications equipment manufacturer, on suspicion of industrial spy activity. Also, Huawei’s CFO was arrested on charges of violating Iran sanctions and international finance fraud. Along with these actions, the US banned the export of semiconductors and networking infrastructure gears to China.
It can be a great chance to increase the global market share for Korean semiconductor and 5G networking infrastructure companies. Also, Korean mobile device manufacturing companies can place themselves inside the mainstream of the North American continent’s mobile device market, where Chinese companies are excluded.
In addition, the conflict between the US and China is not only economic but also political. The stage of a political war between G2 nations is Hong Kong. Hong Kong is a very symbolic city to both countries. It was the UK’s colony until 1997. That is why Hong Kong is belongs to a socialist nation but is affected by democratic ideology. Hong Kong is the hub of economic, financial, and trade services in Asia. For this reason, Hong Kong is vital to both countries which want to dominate Asia. Until now, China has guaranteed Hong Kong’s one-country two-state system. However, in July 2020, China enforced the Hong Kong security law, and this was the start of a new cold war.
After the enforcement of the Hong Kong security law, the US insisted Hong Kong’s credibility would be in danger. In response, the US deprived Hong Kong of its special trade status. It deleted the differentiation in tariffs between Hong Kong and China. This restriction has dealt a heavy blow to Hong Kong’s position as a leading financial and trade hub of Asia. Also, the US closed the Chinese consulate general in Houston. The reason was that information leaks and covert operations were suspected. After that, China also closed the US consulate general in Chengdu. In this dangerous atmosphere, Korea’s proper alternative strategies are really important because Korea is one of the three biggest countries in Northeast Asia with China as well as the US’s firm alliance in Asia.
Donald Trump gave the order to ban every transaction with the Chinese mobile app ‘TikTok’, ‘WeChat’ and its company ‘ByteDance’, ‘TenCent’ on August 6, 2020. This restriction is strongly connected to Korea. In Korea, TikTok is the second most used video-playing mobile app. So, in view of international interests, the relevant national agency should build a proper and effective plan.