[US-China Economic War Series] ① Balancing Economic Interdependence and National Security: The Case of the US-China Economic War

I. Introduction

As the US-China relationship, the most critical bilateral relationship in the world, enters a phase of strategic competition, theoretical and practical interest in the relationship between economic interdependence and national security is surging. While the continuous expansion of trade and investment between the two countries in the 21st century has been a driving force for economic growth not only for them but also for the global economy, the acceleration of US-China strategic competition has led to attempts to reduce or sever interdependence, so-called decoupling, in various areas. The United States and China are raising tariff barriers against each other, restricting investment, and expanding controls on key technologies. The repercussions are not only affecting the economies of both countries but also hitting third countries with close economic ties, threatening global safety and prosperity. Can economic interdependence and national security competition coexist between the two major powers of the US and China? How and to what extent does economic interdependence cause security conflicts? If economy and security are linked, what are their international and domestic foundations? Are the intensity and direction of the economy-security linkage changing? In the case of the US and China, is the future direction towards decoupling?

For Korea, the United States and China are major trading partners and key partners in global supply chains, as well as strategically vital major powers. Therefore, if the strategic competition between the two countries escalates into trade and technology wars, the economic and strategic dilemma for Korea will inevitably intensify. Already, in the 2010s, amidst escalating US-China strategic competition, Korea passively responded to the US request to join the Trans-Pacific Strategic Economic Partnership (TPP), considering China's objections. It also showed a reserved stance until the last moment regarding China's request to join the Asian Infrastructure Investment Bank (AIIB), fearing US opposition. Furthermore, Korea had to endure China's economic retaliation following the deployment of the US Terminal High Altitude Area Defense (THAAD) system (Sohn 2019). Recently, with the implementation of the US Inflation Reduction Act (IRA) and the CHIPS and Science Act, which aim to reduce dependence on China in strategic industries, Korea is being pressured to reduce its economic interdependence with China.

This article analyzes the nature and trajectory of the US-China economic war. It begins with a theoretical review of the economy-security nexus, specifically the relationship between economic interdependence and national security. Then, it traces the changes in US-China economic relations since the mid-2010s, using them as a case study. Finally, it presents the practical implications for Korea through the debate on US-China decoupling and de-risking.

II. Economic Interdependence and National Security

With the advancement of neoliberal globalization in the 21st century, supply chains have expanded and deepened globally through the flow of capital, goods, services, information, and human resources across borders, and nations have become integrated into networks of economic interdependence. Simultaneously, the uneven distribution of benefits from economic interdependence has created winners and losers, leading to domestic and international political conflicts. As social and political conflicts over income inequality and redistribution become widespread, there are instances of externalizing conflict by seeking adversaries abroad (Eichengreen 2018). Meanwhile, the relative decline of the United States and the rise of China have led to strategic competition between major powers, creating incentives to regulate, utilize, or misuse economic interdependence for national security. In particular, advanced technologies, which are crucial for achieving economic and strategic superiority between nations, have the nature of dual-use technologies (civilian-military), making their protection, development, and the maintenance of superiority a critical strategic challenge from a geopolitical perspective.

Thus, with globalization, strategic competition, and technological advancements, the issue of the economy-security nexus, and more specifically, the linkage between economic interdependence and national security, has become practically important.[1]There are two theoretical perspectives on the relationship between economic interdependence and national security. The liberal tradition posits that the advancement of economic interdependence drives political cooperation (Doyle 1997, Ch.8; Oneal and Russett 1997). Increased trade and investment foster more frequent interactions and communication at both the private and state levels, creating an environment for political cooperation. A more sophisticated argument is that when economic transactions with foreign countries generate economic benefits, stakeholders support political and military cooperation with those countries. They argue that policymakers are pressured to avoid political and military conflicts because political risks or conflicts threaten the benefits derived from trade. In essence, the core of the liberal argument is that a free and open economic order contributes to the maintenance of national or international security relations (Keohane 1990).

In contrast, the realist tradition maintains that increased economic contact can lead to security conflicts, thus providing states with political justification for reducing foreign trade. Gilpin (1981), for example, argued that the benefits of trade (or economic interdependence) are unevenly distributed among states, which alters power relations between them and causes military conflicts. That is, states selectively pursue interdependence due to its non-economic externalities (Grieco 1988; Gowa 1994). Specifically, Hirschman (1945) analyzed the political consequences of asymmetric interdependence in his seminal work, "National Power and the Structure of Foreign Trade," introducing the concepts of the "coercion effect" and the "influence effect." The former refers to the effect of economic coercion exerted by a less dependent state on a more dependent state within an asymmetric interdependence relationship. The latter refers to the effect where asymmetric interdependence alters the economic incentives of social actors, influencing domestic politics and consequently redefining national interests. In short, the more a country's economy is externally dependent, the greater the damage if the trade flow is disrupted, leading to changes in foreign policy based on sensitivity to the other party's gains and awareness of its own vulnerabilities.National Power and the Structure of Foreign TradeThe crucial factor here is the connectivity of trade flows that are politically and strategically sensitive. When connectivity is stably guaranteed, states can reconcile economic interdependence with national security interests. If a robust international regime (e.g., a free trade agreement) exists that guarantees connectivity, then the separation of politics and economics, where economic interdependence is maintained despite political conflicts, can be upheld. Conversely, if connectivity is weak, economic interdependence and national security become mutually exclusive, requiring the sacrifice of economic interests for geopolitical or political gains, or the compromise of geopolitical or political interests for the expansion of economic benefits. Furthermore, as Farrell and Newman point out, certain states can leverage their superior position in highly interconnected global supply chains to "weaponize" economic means and influence the foreign policy of other states (Farrell and Newman 2019). They exploit their dominant position in global supply chains to target the "chokepoints" of other nations.

The weaponization of interdependence is a key instrument of geoeconomics. Geoeconomics refers to the use of economic means to achieve geopolitical objectives. According to Baldwin, it is also a form of "economic statecraft" used to pursue foreign policy goals (Baldwin 1985). The background for the full emergence of geoeconomics in international politics since the 2010s lies in the advancement of neoliberal globalization and the backlash against it. The increase in interdependence due to globalization brings benefits to the relevant actors but also creates asymmetries in dependence, increasing the incentive for certain countries to strategically exploit this. Blackwell and Harris emphasize that geoeconomic power has become a major tool on the diplomatic stage, pointing out that countries with a state-capitalist character, such as China and Russia, are pursuing strategies to expand their spheres of influence by leveraging the power of state-owned enterprises and sovereign wealth funds, and they call for a geoeconomic strategic response from the United States (Blackwell and Harris 2017).

The weaponization of interdependence is a primary tool of so-called geoeconomics. Geoeconomics refers to the use of economic means to achieve geopolitical objectives. According to Baldwin, it is also 'economic statecraft,' which involves selecting economic means to pursue foreign policy objectives (Baldwin 1985). The background to the full emergence of geoeconomics in international politics since the 2010s lies in the advancement of neoliberal globalization and the reaction against it. While increased interdependence due to globalization has brought benefits to relevant actors, it has also created asymmetries in dependence, thereby increasing the incentive for certain countries to strategically exploit this. Blackwell and Harris emphasize that geoeconomic power has become a major tool on the diplomatic stage, pointing out that countries with a state-capitalist character, such as China and Russia, are pursuing strategies to expand their spheres of influence by leveraging the power of state-owned enterprises and sovereign wealth funds, and consequently call for a geoeconomic strategic response from the United States (Blackwell and Harris 2017).

Here, the imposition of export or import restrictions and financial sanctions as tools of interdependence also restricts the economic activities of domestic businesses and consumers, leading to economic losses for certain groups. For example, if the United States imposes sanctions on China, US companies with significant trade with China may petition their government for relief. In response, the government emphasizes threats from other countries, evokes nationalism, and highlights national security objectives to justify geoeconomic measures, specifically the weaponization of interdependence through the disruption of connectivity. Various economic measures are justified under the name of "economic security."

Originally, economic security can be defined as securing the lives and property of citizens, social order, and territorial integrity by utilizing various available economic means against external "economic risks." Economic risks refer to situations where shocks to a nation's economy or factors detrimental to the economy pose a substantial threat to its defense industry, key industries, legal order, or political stability. Traditionally, disasters and calamities fall into this category. The 3.11 Great East Japan Earthquake, the COVID-19 pandemic, and the Russia-Ukraine war can be cited as risks that caused difficulties in raw material supply and supply chain disruptions. Financial crises such as the 1997 Asian financial crisis and the 2008 Lehman crisis are also sources of economic risk that can lead to systemic crises like "state bankruptcy."[2]

What, then, is the strategic efficacy of geoeconomic tools, or the effectiveness of weaponizing interdependence? Various studies have analyzed the dynamics of dependence and vulnerability arising from the connectivity of external trade flows, concluding that the effect of influence or coercion between states depends more on the degree of vulnerability than on the strength of economic power. The degree of vulnerability, in turn, depends on the structure and type of interdependence. In other words, the impact of economic interdependence on national security is determined by connectivity in various aspects, not just the volume of trade between parties, but also the degree of supply chain integration, the nature of the network (position in the network), the substitutability of goods (availability of alternative sources, indispensability), market size (substitutability of markets), structural barriers such as regulations and standards in market access, and dependence on reserve currencies. Furthermore, political variables that influence the degree of resistance to the pain inflicted by the other party's influence are also important. For example, a higher degree of stateness (state autonomy, state capacity, legitimacy) in the other country reduces dependence and vulnerability (Blanchard et al. 2000). So, what is the situation with US-China relations?

III. US-China Economic Relations

China's rise as an economic power can be described as a process of deepening interdependence with the United States. Since joining the WTO in 2001, China has emerged as a major trading nation and has become deeply integrated into the global division of labor. In 2001, China accounted for only 4% of global exports, but by 2018, it had become the world's largest trading nation with 15% of global exports, and its per capita GDP quadrupled during the same period. The backdrop to this growth was the vast US market, which absorbed its exports. China's share in US foreign trade increased significantly, from 2.1% to 7.3% for exports and from 8.3% to 21.1% for imports. Meanwhile, exports to the US accounted for an increasing share of China's total exports, rising from 6.5% in 2001 to 16.3% in 2018 (see Figure 1).

<Figure 1> US-China Trade, 1985-2018

Source: Walker 2019

The export items shifted from light industrial products such as textiles, fabrics, leather, toys, and miscellaneous goods to electrical equipment like computers and precision instruments. In 2020, foreign-invested enterprises based in China accounted for 42.9% of China's product exports. These companies established production bases in China to assemble and manufacture products labeled "Made in China" for mass export to the US through processing trade. This structure is exemplified by Apple, which outsources the final assembly of products, for which key components are manufactured by Japanese, Korean, and Taiwanese companies, to firms in China. In 2018, US-based companies accounted for an estimated 23.1% of China's exports to the US (Tamura, Taichi 2022, 40). Thus, US-China trade relations have deepened into a complex pattern of interdependence.

US-China economic interdependence was supported by the US policy of engagement with China. Since the Clinton administration, the US pursued a strategy of constructive engagement, aiming to integrate China into the international community, pursue common interests, and promote China's liberalization within the framework of globalization. This approach aligned with the liberal perspective, emphasizing multilateralism, diplomacy, international institutions, and economic engagement, as evidenced by China's inclusion in US-led international orders such as APEC and the WTO (Miller 2017).

The US-China economic relationship reached a turning point in 2018. Trump, who had pledged to reduce the trade deficit with China during his presidential campaign, agreed to a "100-day plan" with China in April 2017 shortly after taking office to address the deficit. In 2018, he imposed large-scale retaliatory tariffs on Chinese products through an executive order, initiating a trade war when China responded with its own retaliatory tariffs. The US policy towards China shifted from one of engagement based on interdependence to a realist competitive policy based on the concept of "adversarial trade."

The starting point for this policy shift was the ever-increasing trade imbalance. Between 2001, when China joined the WTO, and 2018, China's total exports to the US increased 7.5-fold, while its imports grew 5.4-fold. During the same period, the US trade deficit with China rose from 20.2% to 48.1% of the total deficit, with China accounting for half of the US trade imbalance. Robert Lighthizer, the US Trade Representative and a key figure in the Trump administration's trade policy, identified China's economic system itself as the source of the trade imbalance. He criticized previous administrations for making the critical mistake of treating China the same as other democratic/market economies. He argued that the US trade deficit with China was caused by China's mercantilist industrial policies, manipulation of economic policies, and abuses of labor and environmental standards. He contended that admitting China into the WTO without creating a "level playing field" was a mistake. He specifically labeled China's forced technology transfer to foreign companies, intellectual property theft (industrial espionage, state-sponsored cyber intrusions), and restrictions on foreign-invested enterprises' operations as "predatory industrial policies." He claimed that these policies enabled Chinese companies to enhance their competitiveness, leading to increased export competitiveness, the collapse of US manufacturing, and the loss of well-paying jobs (Lighthizer 2023).

The Trump administration's tool for correcting the trade imbalance and reviving manufacturing jobs was the imposition of heavy tariffs on China. Lighthizer believed that imposing tariffs on China would be a highly effective policy to shock the Chinese economy, given China's significant reliance on the US market and the relatively low average US tariff rates. In August 2017, based on Section 301 of the Trade Act of 1974, he initiated an investigation into China's policies and practices related to intellectual property rights, including technology transfer. The investigation found that foreign companies operating in China were subjected to forced technology transfers, discriminatory measures in technology transactions, acquisition of US companies' assets with Chinese government support, and cyber theft of intellectual property and trade secrets. As a retaliatory measure, the US imposed a 25% tariff on Chinese imports worth $50 billion (including aerospace, IT, robotics, and machinery). When China retaliated with equivalent tariffs, the US announced an additional 10% tariff on Chinese imports worth $20 billion.

The escalation of US-China trade friction into retaliatory tariffs over China's unfair trade practices is similar to the past US-Japan trade friction. During the peak of US-Japan trade friction in the late 1980s and early 1990s, Japan accounted for a staggering 65% of the US trade deficit. The US perceived the cause of the trade imbalance to be Japan's unfair trade practices, stemming from structural issues within the Japanese political and economic system. Consequently, the US used retaliatory tariffs to pressure Japan for liberalization in various sectors. However, the US-China trade friction differs from the US-Japan trade friction in that its starting point was not merely correcting a trade imbalance, but rather friction with China as a geopolitical competitor, driven by China's expanding production capacity, technological advancements, and military innovation. The imposition of tariff barriers against China also serves as a means to reduce US dependence on China and curb its technological advancement through supply chain fragmentation and technological decoupling.

The Trump administration's "The National Security Strategy 2017" designated China as a revisionist power and declared the revival of great power competition. It set the goal of maintaining and strengthening US strategic superiority over China by leading in emerging technologies, particularly dual-use technologies, which are the foundation of economic growth and national security (The White House 2017). Accordingly, the US government implemented various policies across agencies to prevent technology leakage to China, aiming to exclude China from the innovation system of emerging technologies. To prevent technology outflow to China, the Export Control Reform Act of 2018 (ECRA) was enacted under the National Defense Authorization Act for Fiscal Year 2019 to strengthen export controls, and the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) was passed to expand and strengthen the authority to review foreign investments in the US. The Department of Commerce expanded its list of Chinese entities (entity list, a list of organizations whose activities are contrary to US national security and foreign policy interests), thereby increasing restrictions on advanced US technologies and products. In essence, the Trump administration's economic policy towards China was a combination of economic drivers, such as resolving the trade imbalance and creating manufacturing jobs, and geoeconomic factors pursued as a means of strategic competition with China under the banner of national security.

China's countermeasures are being implemented under the framework of economic security. As discussed in Chapter 7 (Kim Yong-shin), Xi Jinping's China broadly defines economic security as the "ability and capacity to maintain the sustainable development of the national economy" as the foundation of overall national security. Accordingly, China is countering the US trade offensive and technological decoupling as a means of protecting its economic sovereignty and lifeline. It has enacted an "Export Control Law" similar to the US law and has taken measures to curb third-country companies that align with US sanctions against China. Underlying this is a strategy, as seen in "Indigenous Innovation" or "Made in China 2025," to fundamentally reduce reliance on foreign technology, pursue domestic production, and particularly reduce excessive dependence on the US. It also involves a strategy to increase dependence on China within supply chains, thereby building retaliatory and deterrent capabilities against supply disruptions by other countries. This can be described as China's decoupling strategy in response to US decoupling.

IV. Decoupling Pressure on Third Countries

While the Trump administration intensified import/export controls and domestic investment management towards China, the Biden administration has continued these policies and even implemented measures to regulate outward investment, specifically restricting US companies' investments in China. Furthermore, whereas the Trump administration targeted individual companies like Huawei with regulations, the Biden administration has pursued comprehensive regulations since its inception, aiming to contain China by reorganizing supply chains for strategic goods such as semiconductors. When seeking to exclude China from supply chains or reduce dependence on China, the US requires the cooperation of reliable countries, particularly allies and like-minded countries, that participate in the supply chain. This is because reorganizing supply chains for strategic goods involves onshoring (locating key hubs within the US), reshoring (bringing production back to the US), and friend-shoring (transferring production to allied and like-minded countries).

Through its "Indo-Pacific Strategy (2022)," the Biden administration has pursued alliances and like-minded country cooperation through networks such as the "Indo-Pacific Economic Framework (IPEF)," the "US-ASEAN Partnership," and multilateral networks like the Quadrilateral Security Dialogue (Quad) and US-ROK-Japan cooperation (The White House 2022). However, the stronger the emphasis on excluding China and building a containment network around it, the more criticism arises from countries concerned about China's backlash and retaliation. Countries, led by ASEAN nations, and even India, a key member of the Quad, have reacted negatively to economic decoupling with China. Furthermore, with the enactment of the US Inflation Reduction Act and the CHIPS and Science Act in August 2022, even key allies such as the European Union, Japan, and South Korea began to express opposition.

As discussed in "Reorganizing the Electric Vehicle Battery Supply Chain and Securing Critical Minerals (Kim Yeon-kyu)" and "The Rise of China's Electric Vehicle (EV) Industry and Its Implications for South Korea's Economic Security (Lee Wang-hwi)," the Inflation Reduction Act provides tax credits of up to $7,500 for the purchase of North American-made electric vehicles (EVs) as part of climate change and energy security measures. While it aims to counter China's rapidly growing EV sector by restricting the use of Chinese critical minerals in vehicle batteries, it also functions as a protectionist measure by compelling local production within the US, thus provoking backlash from allies. They strongly demanded a relaxation of the EV preferential treatment requirements. In response, the EU allowed subsidies for EU companies to prevent them from relocating production bases to the US and established support funds.

Meanwhile, regarding the semiconductor case discussed in "Reorganization of the Semiconductor Industry and South Korea's Response Strategy (Bae Young-ja)," the US has allocated $280 billion for R&D funding and industrial subsidies with two main objectives. The first objective is to establish large-scale domestic semiconductor manufacturing clusters by 2030, thereby securing the capacity to produce cutting-edge semiconductor chips, and simultaneously creating a robust semiconductor supplier ecosystem that includes back-end processes (packaging) and R&D facilities. The second objective is to ensure a stable supply chain by having US semiconductor manufacturers produce mid-to-low-end legacy chips used in automobiles and medical devices. To achieve this, the US is encouraging Korean and Taiwanese companies to invest in and build cutting-edge process facilities within the US. It is also compelling Japanese and Dutch semiconductor equipment companies to participate in export controls against China and has imposed "guardrail" provisions that restrict the production capacity and advanced technology cooperation of Korean companies (Samsung and SK Hynix) in China. As a result of the US CHIPS and Science Act, which embodies the US strategy of decoupling from China and fostering domestic manufacturing under a "US-first" principle, Korean companies are compelled to invest locally to receive US government subsidies, while facing strict limitations on procuring semiconductor manufacturing equipment for their Chinese factories. This situation is likely to slow down technological advancements in Chinese factories, potentially allowing Chinese competitors to catch up.

V. Decoupling vs. De-risking

The US strategy of pressuring allies and like-minded countries for decoupling while pursuing protectionism with a "US-first" approach has led to a backlash against US pressure, particularly from the EU. In March 2023, Ursula von der Leyen, President of the European Commission, criticized decoupling from China as neither feasible nor desirable, and publicly introduced the concept of "de-risking." This concept serves as a check on the US strategy of excessive separation from the Chinese economy, aiming to reduce dependence on China for strategic goods and protect critical technologies and industries like semiconductors, while continuing trade with China in other areas (von der Leyen 2023).

In response to Europe's concerns, Jake Sullivan, US National Security Advisor, accepted the concept of de-risking (Sullivan 2023). He defines de-risking as reducing or eliminating risks posed by competitors and lowering dependence on them. Sullivan identifies two categories of risks to be reduced or eliminated. The first category is "national security risks," which include "certain countries that militarily challenge the United States" and "narrowly defined technologies" that "determine the military balance." In this area, he argues that separation from China, i.e., elimination of risk, is unavoidable, which is essentially close to decoupling. The second category is "economic risks," such as excessive dependence on the Chinese economy or resources, and China's market access barriers (intellectual property theft, cyber hacking, discriminatory trade policies, the Counter-Espionage Law, etc.). For these risks, he argues that instead of complete separation, the US should pursue "manage competition responsibly" and foster "healthy economic competition" with China through appropriate trade, industrial, and technological policies. This implies risk reduction rather than elimination.

The concept of de-risking as defined by von der Leyen and Sullivan differs from decoupling. While decoupling aims at the severance or separation of relationships or connectivity, i.e., the disruption of economic interdependence, de-risking aims at correcting or reducing the risks arising from dependence or imbalance within the relationship structure, rather than the relationship itself. Therefore, it implies developing a more stable and healthy relationship by correcting asymmetric dependence while maintaining the relationship, rather than severing it.

The key issue here is what constitutes a national security risk. The scope of rare resources or strategic goods excessively concentrated in China, and the extent to which advanced technologies carry national security implications, are subject to subjective judgment. As Sullivan puts it, "small yard, high fence," the "securitization" of risks is bound to be made differently by stakeholders and nations based on subjective judgment. As strategic competition between major powers intensifies, if they pursue "over-securitization" by expanding the scope of what is considered a target for separation and division, the scope of decoupling will widen, the level of regulation will increase, and consequently, the pressure on third countries will intensify.

How and to what extent do the US and China perceive risks in their economic interdependence? How does risk response affect economic interdependence? What cases adequately illustrate this causal relationship? Are risk responses realizing national security and economic interests? What impact is Korea experiencing from the US-China de-risking strategy, and how has it responded? What strategic prescriptions should Korea adopt going forward?

This series analyzes the development of the US-China economic war and Korea's response, focusing on these questions. Chapters 1 onwards present case analyses of individual industries and technological sectors where the US-China economic war is unfolding. Chapter 1 (Bae Young-ja) focuses on semiconductors, Chapter 2 (Kim Yeon-kyu) on batteries and critical minerals, Chapter 3 (Lee Wang-hwi) on automobiles, Chapter 4 (Lee Yong-wook) on finance, and Chapter 5 (Jeon Jae-seong) on military artificial intelligence, analyzing the US-China strategic competition and Korea's response. Chapters 6 (Lee Hyo-young) and 7 (Kim Yong-shin) comprehensively summarize the concepts, strategies, and policies of economic security in the US, China, and the EU. Finally, Chapter 8 (Lee Seung-ju) traces the continuity and changes in South Korea's economic security policies. ■

References

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Eichengreen, Barry. 2018. The Populist Temptation. New York: Oxford University Press.

Farrell, Henry and Abraham Newman. 2019. “Weaponized Interdependence: How Global Economic Networks Shape State Coercion.” International Security 44: 42-79.

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[1]A review of the literature on the relationship between economic interdependence and national security includes Robert Gilpin, 1977, “Economic Interdependence and National Security in Historical Perspective,” in Klaus Knorr and Trager, Economic Issues and National Security 19-66; Michael Mastanduno, 1998, “Economics and Security in Statecraft and Scholarship,” International Organization 52:4, 825-54; Rawi Abdelal, and Jonathan Kirshner, 1999/2000, “Strategy, Economic Relations and the Definition of National Interests,” Security Studies 9:1/2, 119-156; Jean-Marc Blanchard et al. (eds), 2000, Power and Purse: Economic Statecraft, Interdependence and National Security New York: Frank Cass; Edward Mansfield and Brian Collins eds., 2003, Economic Interdependence and International Conflict Ann Arbor: University of Michigan; Victoria Pistikou, 2017, Economic Interdependence and National Security London: Lap Lambert; Mikael Wigell, Soren Schovin, and Mika Aaltola eds., 2019, Geo-economics and Power Politics in the 21th Century London: Routledge.

[2]The U.S. National Security Strategy (NSS 2017) defines economic security as “the ability to maintain economic vitality, prosperity, and growth as a key element of national security,” and the Department of Defense defines it as “the ability to possess the material resources to protect or advance U.S. economic interests and overcome non-economic challenges,” thereby assigning an active and offensive concept. China, based on its “holistic national security concept,” also defines economic security as “the situation and capability to maintain the sustained development of the national economy.” Both major powers have effectively defined economic security as the foundation of national security, thereby establishing grounds for the state to extensively intervene in international economic transactions and to pose economic threats to other countries.

■ Son Yeol_Director of the East Asia Institute, Professor at the Graduate School of International Studies, Yonsei University.

■ Contact and Editing: Lee Ju-yeon_EAI Research Fellow

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