{"id":2203312,"date":"2024-01-01T18:59:38","date_gmt":"2024-01-01T09:59:38","guid":{"rendered":"https:\/\/koreapro.org\/?p=2203312"},"modified":"2024-01-02T16:48:26","modified_gmt":"2024-01-02T07:48:26","slug":"from-evs-to-rare-earths-south-koreas-biggest-economic-successes-of-2023","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/01\/from-evs-to-rare-earths-south-koreas-biggest-economic-successes-of-2023\/","title":{"rendered":"From EVs to rare earths: South Korea\u2019s biggest economic successes of 2023"},"content":{"rendered":"

In 2023, South Korea demonstrated significant resilience and adaptability in its economic policies amid global uncertainties and challenges. While the year was marked by some <\/span>high-profile setbacks<\/span><\/a>, South Korea\u2019s economic landscape also witnessed notable triumphs.\u00a0<\/span><\/p>\n

Korea Pro<\/span><\/i> presents a retrospective of standout moments in South Korea\u2019s economic policy in 2023, setting an optimistic tone for the nation\u2019s future trajectory:<\/span><\/p>\n

Part 1: Foreign Policy<\/span><\/a><\/p>\n

    \n
  1. Improved ROK-Japan relations<\/span><\/li>\n
  2. A New Era for trilateral cooperation<\/span><\/li>\n
  3. Nuclear Consultative Group<\/span><\/li>\n
  4. Successful satellite launches<\/span><\/li>\n
  5. Ukraine aid<\/span><\/li>\n<\/ol>\n

    Part 2: Economic Policy<\/span><\/p>\n

      \n
    1. Electric vehicle exports<\/span><\/li>\n
    2. Successful navigation of CHIPS and Science Act<\/span><\/li>\n
    3. Middle East boom<\/span><\/li>\n
    4. Westinghouse lawsuit dismissed<\/span><\/li>\n
    5. Diversifying rare earth supply chains<\/span><\/li>\n<\/ol>\n

      The selected events are not presented in a particular order.\u00a0<\/span><\/i><\/p>\n

        \n
      1. Electric vehicle exports<\/b><\/li>\n<\/ol>\n
        \"\"

        An illustration of an electric vehicle assembly plant | Image: Korea Pro<\/em><\/p><\/div>\n

        What Happened: <\/b>South Korea witnessed an <\/span>uptick in exports<\/span><\/a> in Oct. 2023 after experiencing continuous export declines for 13 months, as reported by the trade ministry. The 5.1% on-year increase was primarily driven by a surge in automobile exports, which saw a 19.8% increase over the same period to $5.88 billion. This growth in automobile exports, particularly electric vehicles (EVs), was fueled by robust demand from North America and Europe, marking a 16-month continuous growth streak in this sector.\u00a0<\/span><\/p>\n

        Regionally, South Korea\u2019s exports to the U.S. increased by 17.3%, amounting to $10.1 billion, largely due to high demand for automobiles, machinery and mobile devices. This positive trend contrasts starkly with the ongoing struggles in the semiconductor industry, a critical component of the nation\u2019s export economy.<\/span><\/p>\n

        Implications:<\/b> President Yoon Suk-yeol <\/span>pledged<\/span><\/a> to quintuple the country\u2019s production of EVs by 2030 to retain South Korea\u2019s position as a leader in the global EV market. This target coincides with a projection by <\/span>SNE Research<\/span><\/a> indicating that the global EV battery market could expand to $616 billion by 2035.<\/span><\/p>\n

        As countries increasingly adopt zero-emission standards, the demand for EVs is expected to accelerate, presenting a significant opportunity for South Korean automakers.<\/span><\/p>\n

        The <\/span>construction<\/span><\/a> of Hyundai Motor Company and Kia Corp.\u2019s new EV factory in Ulsan, representing an investment of $1.5 billion, is a testament to South Korea\u2019s commitment to this sector. This factory aims to produce 200,000 EVs annually from 2026.<\/span><\/p>\n

        However, Hyundai\u2019s expansion plan could be hindered by potential supply chain vulnerabilities, notably in the refined <\/span>graphite market<\/span><\/a> essential for lithium-ion batteries. China controls a vast majority of the world\u2019s refined graphite production and is imposing tighter export controls.<\/span><\/p>\n

        Concurrently, South Korea\u2019s Ministry of Environment seeks to reclassify waste batteries from EVs as \u201c<\/span>recyclable resources<\/span><\/a>,\u201d in a strategic move toward sustainable waste management. This policy will help South Korean manufacturers reduce their reliance on imports from China and could invigorate the domestic recycling industry, fostering a more circular economy.\u00a0<\/span><\/p>\n

        However, the sector faces potential challenges from growing trade protectionism. France\u2019s decision to <\/span>amend its EV subsidy policy<\/span><\/a> to focus on the entire supply chain\u2019s carbon emissions could disadvantage South Korean manufacturers in favor of European ones.<\/span><\/p>\n

        This policy shift reflects a growing trend of environmental considerations in trade policies and could signal a need for South Korean manufacturers to adapt their strategies.<\/span><\/p>\n