Many experts are urging Korean conglomerates to reduce their reliance on China by diversifying their production lines to other countries. The call came during a Korea Chamber of Commerce and Industry (KCCI) trade forum at the Dalgaebi Conference Hall in Seoul, Friday, that was held to discuss post-COVID-19 preparations and the outlook for global trade.
Professors, business executives, economic researchers and related government officials attended the event.
The experts voiced concerns that Korean companies will need to strategically reduce their reliance on China, where companies face geopolitical risks.
They also emphasized the importance of setting mid- to long-term goals to establish new production lines in other locations to replace those in China.
"Since 2000, there has been an expansion in the global value chain, but it has been weakened in recent years as there was economic growth in developing countries, enhancement of protective trade policies and the automation of factories," Chung Chul, a senior researcher at the Korea Institute for International Economic Policy, said.
He said the COVID-19 pandemic has changed calculations among government and conglomerates, where they put an emphasis on safety rather than efficiency. He also said that more key industries are expected to either localize or disperse production lines.
"Major developed countries are starting to rearrange their value chains so they are less reliant on China," Chung said.
Many experts believe the U.S. will also need to reach another trade agreement with Beijing as the two countries' last one was made before the pandemic and is already outdated.
"The U.S.-China trade agreement was inked before the pandemic and the content is now pretty far from reality and nearly impossible to execute," Choi Suk-young, a senior adviser at law firm Lee & Ko, said.
Source; koreatimes.co.kr/
Professors, business executives, economic researchers and related government officials attended the event.
The experts voiced concerns that Korean companies will need to strategically reduce their reliance on China, where companies face geopolitical risks.
They also emphasized the importance of setting mid- to long-term goals to establish new production lines in other locations to replace those in China.
"Since 2000, there has been an expansion in the global value chain, but it has been weakened in recent years as there was economic growth in developing countries, enhancement of protective trade policies and the automation of factories," Chung Chul, a senior researcher at the Korea Institute for International Economic Policy, said.
He said the COVID-19 pandemic has changed calculations among government and conglomerates, where they put an emphasis on safety rather than efficiency. He also said that more key industries are expected to either localize or disperse production lines.
"Major developed countries are starting to rearrange their value chains so they are less reliant on China," Chung said.
Many experts believe the U.S. will also need to reach another trade agreement with Beijing as the two countries' last one was made before the pandemic and is already outdated.
"The U.S.-China trade agreement was inked before the pandemic and the content is now pretty far from reality and nearly impossible to execute," Choi Suk-young, a senior adviser at law firm Lee & Ko, said.
Source; koreatimes.co.kr/
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