Moon urges solidarity to tackle global supply chain crisis
South Korea under renewed pressure to play a bigger role in creating US-led new supply ecosystem
President Moon Jae-in on Sunday attended a global supply chain summit that was convened by US President Joe Biden in an apparent move to rally allies in reshaping the global supply ecosystem less dependent on China.
The meeting was held on the sidelines of the gathering of the G-20 leaders in Rome. A total of 14 countries, mostly the US’ key allies like Italy, Germany, Canada, India and Australia, attended the meeting, with China being absent.
Biden stressed the urgent need for addressing the current supply chain crisis and other challenges affecting global commerce amid the protracted COVID-19 pandemic.
“Supply chains are something that most of our citizens never think twice about until something goes wrong. And during this pandemic, we’ve seen delays and backlogs of goods from automobiles to electronics, from shoes to furniture,” Biden said in his opening remarks.
“Ending the pandemic is the ultimate key to unlocking the disruptions we’re all contending with. But, we have to take action now, together with our partners in the private sector, to reduce the backlogs that we’re facing.”
Moon, who sat next to Biden, delivered a speech after the US president’s opening remarks, urging solidarity among nations to tackle the challenges together.
“Supply chain disruptions are holding back recovery while raising inflation concerns,” Moon said. “The global economy is intertwined with the global supply chain. Until all individual economies return to normalcy, the current supply chain crisis could continue.”
“The issue cannot be resolved individually. All of the countries should come up with emergency measures to speed up the flow of goods.”
In its renewed push to reshape the global supply chain, the Biden administration has reiterated South Korea’s role as the key supplier of essential components like computer chips. Korea'a government and businesses have also responded positively as they stand to enjoy generous business incentives and an expand presence in the new ecosystem.
During the Moon-Biden summit in May, Korean companies, including Samsung Electronics and Hyundai Motor, announced a new investment plan worth a combined $40 billion to shore up their productions in the US.
The unstated priority of the new initiative seems to be creating a new US-led supply chain system and countering China’s greater influence. Observers say South Korea’s balancing stance between the US, its largest security ally, and China, its biggest trading partner, is likely to be tested again during the process.
For Moon, support from both the US and China is crucial in resuming diplomacy with a defiant North Korea, a last-ditch effort to cement his legacy before he leaves office in May.
Separate from the complicated diplomacy between the two superpowers, South Korean firms, especially chip makers like Samsung Electronics and SK hynix, are already feeling the pinch of renewed pressure from the US.
Last month, the US government requested that Korean chipmakers disclose sensitive information on technology, clients and inventories. The companies, reluctant to do so, are asking for government intervention, with the Nov. 8 deadline nearing.
By Lee Ji-yoon