The United States has long been considered the only superpower in the world. Now, China is challenging the United States with its economic power and achievements in advanced technology, most of which leverage huge government subsidies. Since technological leadership is key to becoming a (single) superpower in the world, the tech race between the two countries is intensifying. These nations are struggling to win the race, not only by achieving technological progress, but also by keeping the other from accessing needed resources. Attempts by the US to build its supply-chain resilience provide a good example.
Against this backdrop, the current study attempts to analyze the recent developments in the US-China tech competition while drawing policy implications for Korea. This study is organized as follows. First, changes in the trading environment resulting from the US-China tech competition are reviewed. Then, the so-called “de-coupling” issue is discussed at the country, industry, and firm level, since the US-China tech competition may have different implications for governments, industries, and firms. The impact of the tech competition is also different for the various industries and firms, and is situation-dependent. Lastly, comprehensive strategies for the Korean economy are provided based on previous discussions.
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