China’s President Xi Jinping’s visit to an LG Display factory in Guangzhou highlighted South Korea’s delicate position between China and the US. While Korean companies are key players in sectors important to national security and industrial strategy for both China and the US, they face challenges in navigating the tensions between the two countries. The Biden administration is offering billions of dollars in subsidies to Korean chipmakers and battery makers, but in return, they must adhere to US restrictions on their activities in China and partnerships with Chinese companies. China has also retaliated against US restrictions by implementing its own restrictions and bans on certain imports. South Korea has already begun shifting away from the Chinese economy, with 2022 being the first year since 2004 that it exported more goods to the US than to China. However, the question for Korean policymakers is whether they can take advantage of US incentives while minimizing potential backlash from China. The increasing tensions between the US and China are causing anxiety in South Korea, particularly regarding protectionist industrial policies and their impact on crucial industries like semiconductors and car manufacturing.

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By hassani

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