As the power struggle between the United States and China intensifies, experts argue that South Korea must leverage its semiconductor technology as a key asset in redefining its G2 relations. They also predict that China's economic stimulus measures will revive the economy in the latter half of the year.
The China Capital Market Research Association held a seminar on September 21 at the Financial Investment Association in Yeouido, Seoul, titled 'Eighteen Years of Looking at China: Questioning China's Future Again.' This seminar marked the 18th anniversary of the association and its 200th seminar. Discussions focused on strategies South Korea should adopt amid U.S.-China rivalry and the outlook for China's economy in the second half of the year.
Regarding the geopolitical crisis stemming from the G2 rivalry, Lee Chi-hoon, head of the Global Economic Analysis Division at the International Financial Center, stated, "For South Korea, it is essential to actively utilize the opportunity presented by the U.S. efforts to contain China." He emphasized that South Korea is the only country with strong manufacturing capabilities that has free trade agreements (FTAs) with both the U.S. and China, suggesting that the nation should view the G2 conflict as an opportunity.
Lee specifically identified semiconductor technology as a crucial element for South Korea in redefining its relationship with the G2. He warned, "Without strong semiconductor technology, South Korea risks falling behind not only in competition with China but also in its international relations with countries like the U.S." He stressed the importance of maintaining competitiveness in the semiconductor sector amid U.S.-China tensions.
Experts at the seminar also underscored the need for a nuanced understanding of the Chinese economy. Choi Young-jin, chairman of the China Capital Market Research Association and vice president of Hanwha Asset Management, remarked, "We need to assess how accurately we understand China's technology and manufacturing competitiveness. We must not underestimate China based on familiar perceptions, nor overestimate it based on isolated successes."
Looking ahead, the Chinese economy is expected to gradually recover in the second half of the year, bolstered by enhanced stimulus measures. Kim Kyung-hwan, head of the China and Emerging Markets Strategy Team at Hana Securities, noted, "While measures to boost service consumption and address employment issues remain inadequate, stimulus measures will begin this month. AI products are expected to lead export growth, and exports of other products will also remain robust. Notably, the share of semiconductor and computing-related exports is projected to exceed 15% of total exports for the first time."
Kim predicted that the Chinese stock market would rebound in the latter half of the year, driven by upward adjustments in earnings forecasts, the effects of stimulus measures, the seasonal peak in consumption and real estate, and the impact of U.S.-China summits. He stated, "The Chinese stock market has withstood external challenges such as interest rates and internal supply shocks, and it appears to have secured its own upward momentum starting in September."
* This article has been translated by AI.
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