KISTEP held the 108th Wednesday Forum with the theme of ‘The S&T direction of Korea in the U.S.-China war of technology hegemony’ on July 17th (Wed), 2019.


The concerns and attention of the U.S. are becoming more concrete with the rapid pace of technological development of China along with its economic growth. Preparation of strategic investment conditions is urgent to resolve the uncertainty of investment for domestic enterprises in the midst of the ongoing the U.S.-China trade conflicts, and to gain a competitive position in technology.
This forum was held to share pending issues of trade negotiation and the current status of competition of high-tech hegemony over the U.S.-China, and to seek strategies for sustainable competitiveness and alternative policy options in terms of science and technology.

▲ Sang-seon Kim (President, KISTEP)

The forum began with the opening address by President Sang-seon Kim (KISTEP), followed by the presentation of Sukin Chang (Senior research fellow, ICT & Emerging Industry Division, KIET). Panel discussion were led by Mansoo Jee (Senior researcher, Korea Institute of Finance) and Doo-won Cha (Research Institute of S&T Innovation and Strategy, KISTEP) and open floor discussion followed.

▲ Sukin Chang (Senior research fellow, ICT & Emerging Industry Division, KIET)

Senior research fellow Sukin Chang had a presentation about progresses and major issues of the U.S.-China trade negotiation and stated “In 2017, the U.S. recorded the highest trade deficit with China, and the two countries competitively imposed high tariffs on each other in the second half of 2018. Then the two countries launched high-level negotiation teams and conducted trade negotiations until recently, but failed to reach final agreements and trade negotiations are still under way.”
Also he explained the China’s strategy to foster high-tech industries, ‘Made in China 2025,’ which was emerged as a core agenda during trade negotiations and claimed that the sharp confrontation between the U.S. and China-the top economies-can fundamentally change the conventional global trade environment represented by the free trade.


He introduced the current status and prospects of major high-tech hegemony competitions between the U.S. and China and added that “The current high-tech hegemony competitions between the U.S. and China are focused on the ICT field, the key technology of 4th industrial revolution such as high-performance computing (HPC), artificial intelligence (AI), semiconductor, and 5G telecommunication technology.”
He also emphasized that “As the U.S. considers China’s industrial policies to secure its own technology capabilities as a national-level technology extortion, the competition of these two countries is expected to continue in spite of settlements of trade negotiations.”


For domestic technology innovation and strategies for developing new industries, he mentioned that “Korea’s policies for discovering and nurturing future growth engines weren’t considered enough for the status of industry development in China, and it is inevitable to modify the policies for discovering and nurturing new growth engine at a time when China is expected to emerge as a leader in some of high-tech sectors.”
He advised that “In order to survive in new trade environments derived from the trade war between the U.S. and China, we need to monitor thoroughly the ripple effects of the trade war and reduce the uncertainty of industry investments of new industry sectors.”
Lastly, he suggested that “In the new trade environment, conditions for strategic investment should be fostered, and plans for emerging industries should be reviewed from the perspective of industry rather than the perspective of government policy.”

▲ Mansoo Jee (Senior research fellow, Korea Institute of Finance)

In the following panel discussion, senior research fellow Mansoo Jee said that “The U.S. and China are negotiating for tariffs, however, in fact, technology issues are the key points, not trade issues,” and explained the two aspects on the current technology issues of the U.S. and China.
He added that “The first one is that the U.S. prevents China from its unfair pursuits in existing industry sectors such as forced technology transfer and technology theft, the second one is that it is a competition for dominating initiatives in new industries that are developing on par.”
Moreover, he claimed that “Blocking new industries without industrial standards and network will be faster than expected, and China can take advantage of it to protect new industries in its huge market.”
Lastly, he mentioned that it is more disadvantageous to have wider fields of industries and fewer number of enterprises when new industry sectors became blocked, and pointed that national level of preparations for the new industry sectors are necessary.

▲ Doo-won Cha (Research Institute of S&T Innovation and Strategy, KISTEP)

KISTEP Policy Adviser Doo-won Cha said that “China ranked in 1st place on the growth rate of articles and patents and is far ahead in artificial intelligence sector. China is also ahead in IT sector when heard from the voices at work places,” and gave high value to China's technological prowess.
Also he added that “Now is the era of service and how quickly service is made is the core part of securing competitiveness,” and “The situation of Korea lags behind compared to China that finds oversea markets with rapid services, so we will lose many opportunities if we fail to resolve regulations and other problems as soon as possible,” he warned.
Furthermore, he emphasized that cooperation between industries is important citing the car and mobility markets, and argued that this is the time to consider how Korean enterprises can establish a solid foothold in China-centered open platforms.