S.Korean lawmaker warns: US strategy to contain China will backfire

By Al Mayadeen English
Source: Agencies
6 Aug 2023 14:09

A South Korean lawmaker and former Samsung executive cautioned that the US actions might provoke strong retaliation from China.

American and South Korean flags hang from the Eisenhower Executive Office Building on the White House campus, Washington Friday, April 21, 2023 (AP)

Former Samsung executive and South Korean lawmaker, Yang Hyang-ja warned the US that their strategy which aims to curb China's semiconductor industry by persuading Asian allies to impose restrictions on China, could lead to the disruption of supply chains and push other nations to form alliances against the US, Sputnik reported citing a statement by the official.

"If [Washington] continues to try to punish other nations and to pass bills and implement ‘America First’ policies in an unpredictable manner, other countries could form an alliance against the US," Yang said in an interview with the Financial Times.

Moreover, Yang cautioned that the US actions might provoke strong retaliation from China, which could further exacerbate the situation and disrupt global supply chains.

"The US should abandon its current approach of trying to get something out of shaking and breaking the global value chain," the South Korean lawmaker said.

The US has already taken significant steps in its efforts to impede China's semiconductor progress. In October 2022, the US placed restrictions on 28 Chinese tech companies, preventing them from accessing semiconductor schematics that rely on US technologies, a move that further escalated tensions between the two economic giants.

As the situation unfolds, policymakers and industry stakeholders will closely monitor the potential ramifications of these actions, seeking to balance economic interests and global cooperation while maintaining competitive advantages in the technology sector.

Earlier in May, an analysis published by Philip Pilkington for The Post revealed that the US is still lagging behind China in its semiconductor race despite efforts to contain or isolate China's semiconductor industry in the global market.

This was particularly evidenced by a ban by the Chinese government, outlawing semiconductors from the American company Micron among operators of "critical infrastructure" in China. According to Pilkington, things could have been far worse, had Beijing banned imports of the chips altogether. But even that simple regulatory measure has severe consequences on the US company as it generates about 16% of its profits from China.

Right after the announcement was issued, South Korea made it clear it would not prevent the Chinese from purchasing chips from their own companies as a means of substituting the American-made semiconductors. They said that it was up to South Korean company owners to decide whether or not to sell their own chips to China. As per the words of an industry leader who was quoted by the Financial Times, "Even if we increase our supply to Chinese customers, how can they examine all these deals individually and judge that the increased volume comes from us, replacing Micron’s?"