{"id":2199859,"date":"2023-01-09T09:45:44","date_gmt":"2023-01-09T09:45:44","guid":{"rendered":"https:\/\/www.nknews.org\/koreapro\/?p=2199859"},"modified":"2023-04-05T16:10:24","modified_gmt":"2023-04-05T07:10:24","slug":"how-investing-in-cambodia-can-help-south-korea-balance-against-china","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/01\/how-investing-in-cambodia-can-help-south-korea-balance-against-china\/","title":{"rendered":"How investing in Cambodia can help South Korea balance against China"},"content":{"rendered":"
The Yoon administration recently debuted its fleshed-out <\/span>Indo-Pacific Strategy<\/span><\/a>, <\/span>inching closer to the U.S.<\/span><\/a> while seeking to maintain good terms with China, and the new document has also largely replaced former President Moon Jae-in\u2019s <\/span>New Southern Policy<\/span><\/a> (NSP) that sought closer relations with Southeast Asia and India.<\/span><\/p>\n Still, there is no question that the NSP has had a lasting legacy on South Korea\u2019s foreign policy, and one of the policy\u2019s biggest successes came in the form of improved ties with Cambodia. This provides an opportunity for the Yoon administration: If it presses ahead with the advantage it got from its predecessor, it can reap significant benefits from this improved relationship.<\/span><\/p>\n When the <\/span>Cambodia-Korea Free Trade Agreement<\/span><\/a> (CKFTA) went into force last month, it became Phnom Penh\u2019s second bilateral free trade agreement, following the one between it and China in Jan. 2022. Under this agreement, Cambodia will export agricultural products, garments, textiles, rubbers and electronics to South Korea. Meanwhile, the ROK will ship automobiles, farming equipment, construction machines and materials, cloth and food to Cambodia.<\/span><\/p>\n Currently, South Korea\u2019s most successful economic relationship with a Southeast Asian country has been with Vietnam, which is poised to overtake Japan to become South Korea\u2019s <\/span>third-largest trade partner<\/span><\/a>.\u00a0<\/span><\/p>\n But Cambodia provides Seoul with a backup option in the region, something that could be of particular importance as South Korea faces the difficult task of achieving carbon neutrality by 2050.<\/span><\/p>\n And while Phnom Phen\u2019s close ties to Beijing are a complicating factor, they also provide an opportunity for Seoul to chip away at China\u2019s influence by nurturing economic ties with Cambodia.<\/span><\/p>\n A BACKUP PLAN<\/b><\/p>\n South Korea passed the <\/span>Carbon Neutrality and Green Growth Act<\/span><\/a> in Sept. 2021, which mandates that the country achieve carbon neutrality by 2050. As a stepping stone toward that goal, the act also required Seoul to achieve a 35% reduction in 2018 greenhouse gas (GHG) by 2030, a figure later pushed up to <\/span>40%<\/span><\/a>.<\/span><\/p>\n Reaching such a lofty goal is a tall order for South Korea\u2019s export-led economy. The ROK imports nearly all of the fossil fuels it consumes, ranking it among the world\u2019s <\/span>top-five<\/span><\/a> importers of liquified natural gas (LNG), coal and petroleum. It will be challenging for South Korea to replace that much fossil fuel with carbon-free sources, even with a 27-year head start.<\/span><\/p>\n In addition, Korean conglomerates are facing international pressure from global environmental campaigns. For example, in September, Samsung Electronics signed the <\/span>RE100 sustainability initiative<\/span><\/a>, a worldwide campaign to replace all electricity generated by fossil fuels with renewable energy by 2050. This campaign puts Samsung in a difficult position because chip manufacturing is responsible for a significant amount of the carbon dioxide that the company emits.<\/span><\/p>\n If Samsung fails to meet its RE100 obligations, it could result in <\/span>protectionist trade barriers<\/span><\/a> that would lead to loss of market space amid a <\/span>chip war<\/span><\/a>.<\/span><\/p>\n To stay competitive while meeting carbon neutrality goals, Korean corporations have increasingly looked to move their operations to Vietnam so that their emissions don\u2019t count toward the ROK\u2019s total. Yet this may not be sustainable, particularly as Vietnam itself rapidly develops and local wages increase.\u00a0<\/span><\/p>\n Because of this, Seoul will likely want to diversify its ties in the region and avoid relying too heavily on one country. And in this case, Korean companies will need to begin operations in countries like Cambodia, which have <\/span>low carbon emissions<\/span><\/a>, <\/span>low wage rates<\/span><\/a> and many<\/span> working-age people<\/span><\/a>.<\/span><\/p>\n