{"id":2205448,"date":"2024-06-13T16:33:07","date_gmt":"2024-06-13T07:33:07","guid":{"rendered":"https:\/\/koreapro.org\/?p=2205448"},"modified":"2024-06-14T17:01:21","modified_gmt":"2024-06-14T08:01:21","slug":"south-korea-balances-risks-and-rewards-in-central-asia-critical-minerals-play","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/06\/south-korea-balances-risks-and-rewards-in-central-asia-critical-minerals-play\/","title":{"rendered":"South Korea balances risks and rewards in Central Asia critical minerals play"},"content":{"rendered":"
South Korean President Yoon Suk-yeol\u2019s <\/span>week-long tour<\/span><\/a> to the Central Asian countries of Turkmenistan, Kazakhstan and Uzbekistan sought to strengthen cooperation in critical minerals and create new opportunities for South Korean companies.<\/span><\/p>\n However, experts warn that South Korea faces significant risks as it attempts to diversify its supply chains in the region, including political instability, inadequate infrastructure and limited technical expertise.<\/span><\/p>\n NAVIGATING ECONOMIC DEPENDENCIES<\/b><\/p>\n South Korea\u2019s economy thrives on global supply chains, with imports fueling its manufacturing sector for export. However, escalating trade tensions between the U.S. and China have prompted South Korea to reassess its economic dependencies. China remains a crucial market for semiconductor exports, and the U.S. plays a vital role in supplying advanced equipment and technology.<\/span><\/p>\n The Yoon administration has <\/span>responded<\/span><\/a> to these challenges by aiming to reduce its critical minerals import from 80% to 50% by 2030 while significantly increasing domestic production and recycling rates from 2% to 20%.\u00a0<\/span><\/p>\n South Korea has also embarked on a diplomatic offensive, forging alliances through initiatives like the <\/span>Minerals Security Partnership<\/span><\/a> and bilateral agreements with mineral-rich nations to diversify import sources and ensure a reliable supply.<\/span><\/p>\n Experts stress the importance of maintaining competitiveness and securing stable supply chains, particularly in light of U.S. efforts to decrease reliance on Chinese imports through regulatory measures like the <\/span>Inflation Reduction Act<\/span><\/a> (IRA) and the <\/span>CHIPS Act<\/span><\/a>.<\/span><\/p>\n Doh Won-bin, a senior researcher at the Korea Institute for Trade Analysis, stressed the need for industry-specific strategies, emphasizing that South Korea should focus on targeting the U.S. market in sectors like electric vehicles (EV) and batteries, where ROK businesses can benefit from U.S. moves to <\/span>impose tariffs<\/span><\/a> on Chinese imports.<\/span><\/p>\n \u201cIn the electric vehicles and battery industries, viewing the U.S. as a market and China as a competitor aligns with South Korea\u2019s strategic goals,\u201d Doh told <\/span>Korea Pro<\/span><\/i>, stressing the importance of maintaining technological leadership through a balanced approach that secures diversified markets and resources.<\/span><\/p>\n Kwon Oh-kyoung, a professor of Supply Chain Management at Inha University, agreed, noting that the global shift toward regionalized supply chains centered around major economic powers like the U.S., China and Europe could offer Korean businesses resilience and strategic opportunities if managed effectively.<\/span><\/p>\n Kwon highlighted the need for enhanced multilateral cooperation with Southeast Asia, Central Asia, Africa and other emerging markets.<\/span><\/p>\n \u201cWhile various countries and blocs are reshoring and regionalizing their supply chains, South Korea must employ strategic engagement and provide robust institutional support for Korean businesses to capitalize on evolving global trade dynamics,\u201d Kwon said.<\/span><\/p>\n \u201cThe U.S. considers some countries as posing investment concerns or risks to its national interests. Obviously, South Korea cannot engage with countries under sanctions, but Seoul must also be careful with engaging countries that the U.S. considers potentially risky. After all, the U.S. is our largest market. We must identify countries outside of these concerns and work with them.\u201d<\/span><\/p>\n