[EAI Online Seminar] After Trump Series 4. U.S.-China Economic Decoupling under the New U.S. Administration and South Korea`s Choices

YouTube 링크 : https://www.youtube.com/watch?v=kr0dkDAlH_U

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The East Asia Institute(President Yul Sohn) invited you to the 4th online seminar of the series, titled “US-China Economic Decoupling under the New US Administration and South Korea’s Choices.” Amid intensifying competition and economic decoupling between the US and China, the international society remains attentive to prospects of US foreign economic policy following the presidential election. During this seminar, experts discussed economic policies related to TPP, multilateralism and technology alliance and whether they would contribute to bringing pre-Trump normalcy under the Biden administration.

• Date & Time: Nov 26(Thurs) 10:30 -11:40 (KST)
• Speakers: Barry Eichengreen(George C.Pardee and Helen N.Pardee Professor of Economics and Political Science, University of California, Berkeley), T.J. Pempel(Jack M.Forcey Professor of Political Science, University of California, Berkeley)
• Discussant: Seungjoo Lee(Chair, Trade, Technology, and Transformation Research Center, EAI ;Professor, Chung-Ang University)
• Moderator: Yul Sohn(EAI President; Professor, Yonsei University)

영상 스크립트

welcome to eai webinar uh i'm your son um today's host uh i'm the president of the east asia institute and a youngster university professor uh today is the fourth and the last of uh eai's so-called after trump uh webinar series today's theme is u.s china economic decoupling under the new uh idaho administration and korea's choice um a great economic decoupling are looms large as uh u.s china economic relations uh are in danger of tariff wars uh trade diversion plants um tackle tariffs on the following and then some other

chinese companies and industries this is a profound challenge to not only uh two big powers but also uh countries like south korea uh for korea china is the largest market of course and um so there is a idea yet asymmetric uh economic interdependence between the two countries uh united states is south korea's military ally but also it's a technological superpower uh with which south korean economy has developed a highly independent relationship as well so uh south korea needs to accommodate china while at the same time supporting

support and engagement from the united states militarily and technologically so any sort of community coupling along the line of u.s china um you know rivalry will be a great challenge to uh south korea now the biden administration is coming um and we want to uh discuss if the current trend of decoupling um change course um and if uh you by the way i mean if we see a return to uh you know uh pre-trump normalcy um and uh would it be the china policy for the next uh administration uh and uh economic

regional regional economic architecture and some implications for south korea um with that said i'm very very excited to uh introduce to you our guest two great great scholars uh in the field of international economics and international political economy dr barry eichengreen and tj pentel both from the university of california berkeley professor eiken green is the world leading economic historian and the foremost international economist today he is the george parvee and the holland party professor of economics and

political science at berkeley uh he has written many many important books including uh paul of mirrors uh exorbitant privilege and globalizing um pj campell uh is jack m4c professor of political science at berkeley um a world leading east asianist uh with so many important works in the field of japan uh east asian political economy and east asian international relations um um tj is presidentially uh appointed commissioner on u.s and uh friendship commission and an active participant as well um last but not least uh we have

an excellent uh discussion today uh julie of uh university a leading ip scholar in korea header he also serves the chair of trade technology and transformation research center at eai he squarely works on uh political economy of international trade and new technology with regional focus on each teaching for the audience uh we are welcome to uh raise questions uh during uh the seminar uh you use uh your q a function at the bottom of the zoom uh and you can leave some comments to ea step also uh through to the eai's official

youtube channel lives now the live stream channel um so uh let's uh get it started let me begin with a question to uh barry uh first um in your most recent book uh the populist temptation you nicely delineated the historical processes by which uh economic insecurity uh combined with you know identity crisis led to destructive uh populist politics and policies can we um make sense of the short fluctuations uh in the u.s foreign economic policy years under trump by uh trump presidency in that way um

and will we see uh a return to uh trump normalcy uh so you've asked a very complicated question i think um one thing i can put in simple terms is that we've reached the point of no return i think that in in the sense that uh u.s chinese relations have changed in a fundamental way uh they can now change for the better i think but that's not uh the the same as saying they will return to their pre trump status my view of the explanation for those fluctuations in in u.s stance is they reflect partly fundamental economic

tensions what economists in the us call the china shock china's wto accession and the surge of exports to the us and the rest of the world but these shifts also reflect individuals and personalities and here i would uh point not only to president trump but also to president xi whose rise to to power and now firm grasp on power has changed the relationship as well so there was discomfort before trump over the intensity of chinese competition uh china we in the u.s accused china of being a currency manipulator not formally but

uh in so many words trump articulated that discomfort i think he framed the issue in an inappropriate way he looked at the competition between the us and china in the same way a businessman might look at the competition between samsung and and lg uh the the market share of the two players the us and china is not what it's all about but trump did present uh the interaction as a zero-sum game and bring the discomfort to a head um he came along at a time when there was growing awareness of domestic problems in the united states

like the opioid crisis and he could point to the decline of manufacturing in the us and the rise of china rightly or wrongly as a cause um i think his focus on uh inappropriate concern the bilateral trade imbalance caused his critics to instead identify and articulate valid concerns like forced technology transfer industrial espionage inadequate intellectual property rights um china did its part uh at as well i think by holding on to its poor country concessions in the wto long after it was no longer a poor

country by its non-transparent belt and and road lending to developing countries with the advent of president xi it then became clear to american observers that the hope that engagement would lead to democratization in china or to something like democratization that hope was disappointed assumptions needed to be revised and i think the relationship will change permanently uh as a consequence china has become more assertive and more nationalistic in its uh foreign policy again requiring assumptions to be

revised uh china has become a foreign policy player to be reckoned with uh causing cons uh security assumptions to be uh revised that plays into the controversy over 5g and now the united states has human rights concerns about china as well and that those are not going to go away to the contrary with the change in u.s administration so the short answer to the question will we see a return to quote pre-trump normalcy now the short answer is no i think the new intellectual property concerns foreign policy concerns human rights

concerns are not going to go away concern about china is now a bipartisan shared position in the united states it may be one of the few bipartisan shared positions in the united states all that will change is how the us seeks to advance its goals systematically rather than in a scatter shot fashion by building a coalition of like-minded governments rather than uh proceeding unilaterally on the basis of uh america first i don't think the united states will build that coalition by joining that trans-pacific

partnership i think the republican party in the u.s has gone over to the dark side it's become protectionist biden is a centrist but he has to accommodate the progressive wing of his party and that progressive wing is firmly opposed to trade agreements including ppp um biden may be more uh pro trade janet yellen is more free trade but biden campaigned against great agreements back when he was uh going for the the nomination so i think the prospects for multilateralism are better than uh they they were

last year or in uh um 2016 but they're worse than uh they were in the obama years because biden or uh no biden the u.s is now viewed understandably uh as a as a less reliable bilateral and uh multilateral alliance partner let me let me stop there you uh thank you very very nice i um so you you said that they're the source of change uh in trade policy uh from the united states and also from china too and um you know one one important consequence of those changes is economic decoupling as i mentioned

earlier given the dangers of economic coupling you know question to ej can baiden administration push back against the coupling pressures and hopefully i'll move to uh more nuanced uh china policy yeah i guess i guess the way i'd answer your question is to start with a comment or two about just why this uh discussion of decoupling has taken place now because up until uh a few years ago really the most policymakers in the united states were pretty much committed to a win-win situation with regard to china

basically presumed that china would accept the broad outlines of america's uh global economic order uh maybe with minor caveats here and there that china would stay focused uh in turn on its hide and bide uh philosophy and continue its peaceful rise and as we've seen with uh and certainly barry mention this uh with trump and the tariff wars the uh attacks on huawei wechat uh uh tick tock uh videos uh and the like uh as well as the expansion of the treatment of china now by pence pompeo national security strategy as an

existential threat the situation has moved it seems to me in the united states from simply an economic problem to something that is being portrayed and painted as a much more fundamental combination of economic and security challenges uh that is is quite serious and of course uh the uh as barry mentioned washington dc now has really become bipartisan in its worries about china and this is an issue that is going to be very difficult uh to address in what i think is a is a sensible way because of the combined fears of china

on both the republican and the democratic side but of course as as barry also mentioned china has not been at all free of blame in this deterioration of relations and the focus on decoupling with its emphasis on uh intellectual property theft on decoupling from the rest of the global internet particularly with regard to information that's available to its citizens uh the banning of social media companies such as google or twitter or facebook from from access to chinese citizens and the like and of course the human rights

violations are combined with foreign policy expansions and crackdowns on xinjiang on hong kong and chinese efforts to drive a wedge between the united states and many of its allies the phrase that you hear now is in china is very much outdated cold war alliance structures created by the united states so all of this uh decoupling talk has it seems to me been exacerbated by the colvit 19 situation airline flights have been canceled uh trade shows have been postponed tourism has halted we've seen uh investment flows drying up

uh high-tech exchanges have been truncated etc etc uh clearly i i'm a firm believer in the fact that decoupling uh and discussions of decoupling is extremely dangerous for the united states but also for other countries most fundamentally i the two economies are deeply enmeshed with one another you can talk about the trade relationship but you can talk about chinese investment in the united states american companies investing in in china but even more tangibly a number of u.s companies and u.s sectors

are deeply enmeshed in the china market and any kind of decoupling would be severely detrimental to them whether you're talking about boeing or whether you're talking about qualcomm or whether you're talking about tiffany's or whether you're talking about starbucks or um iowa soybean soybean farmers and the like so numerous sectors of the american economy numerous companies are just deeply dependent on the china market and in addition it seems to me american universities are deeply dependent on chinese students

for a good deal of their income and for teaching assistance and the like some one-third of all foreign students studying in the united states come from china and interestingly enough and positively enough when i checked the numbers about 20 percent of the stem graduates coming from china stay in the united states wind up working for american companies and in many cases become very powerful players in the success of american the american technological breakthroughs and lastly i think it's important to recognize that there

are uh numerous scientific exchanges between the two countries that are very positive and powerful whether it's the who on pandemics or whether it's simply science and technology uh more generally so it seems to be a realistic decoupling china policy for the non-decoupling china policy for the biden administration will not lead to a return to any pre-trump era or some imagined ideal time in the past i think it's necessary and i think this is picking up on what barry was saying to move in a in a somewhat new direction

and i guess the the starting point for me is to recognize that for the united states and for other countries china is a challenge of course but it's also an opportunity and i would want to suggest that there are basically five things that a biden administration has to take into account in order to create a very effective china policy first of all it has to acknowledge the simple fact that asia is the most dynamic economic area in the world it's going to be that for the medium and long-term range

but in the short-term range because of asia's success in dealing with colbit it's also going to be a very powerful engine of global economic growth in the short term so any any thought of getting out of asia i think is uh is ridiculous but the second point uh that i want to raise for biden administration would be to say that without decoupling the united states must still confront china's what i call it embedded mercantilism but uh distorted economic practices uh china's intellectual property theft

china's demand for access to global markets while at the same time cutting off global access to its markets promoting its soes state-owned enterprises providing incredible subsidies for that and doing its best to nationalize the benefits of economic growth within the country in ways that play unfairly with regard to uh other companies from other countries the third thing that's critical and i again this is something that barry said but i want to underscore it is the importance of multilateralism

there are numerous countries and numerous companies that feel very much like the united states does about the unfairness of china's practices and i think was a mistake for trump to move into this america first mindset and think that that was the way to deal with china when in fact companies across western europe in many parts of east asia are also anxious to confront um china on some of these specific practices and it seems to me that's that's a direction that has to be uh pursued additionally i think the long

run strategy for the united states has to be to compete with china in a head-to-head way on the cutting-edge technologies so the united states really needs to get its house in order on areas like um uh intellectual pride advanced um a uh 5g on on high-speed rail on science and technology on global warming on moving toward renewable energies on a whole host of things that china is now doing extremely well in and the united states has been very sluggish in particularly uh during the trump administration with

the efforts to promote fuel uh fossil fuel and to return to an economy hypothetically looking like the 1950s the fourth point i guess is that the united states just has to reject the trumpian links to multilateralism and focus on alliances but at the same time i think the last point that i want to make is that the biden administration has to recognize the tremendous damage that has been done to the united states image across the region um countries are not just waiting for the united states to come and take

leadership because they've been through the changes that went from clinton being positive on asia bush being much less positive on asia uh to an obama that was positive on the asia pacific to now a trump that was much less positive and i think countries in governments and foreign policy establishments across east asia are going to be scratching their heads and wondering what happens in four years biden may look very favorably on multilateralism but is that going to change in 2024 so i think the long-term

prognosis for u.s asia cooperation is something that the u.s and the bible administration are going to have to work very very seriously seriously about and i guess the last thing that the administration needs to think about in this regard is that asia has been moving ahead with a lot of things in terms of multilateral institutions free trade agreements uh rcep cptpp all of these things are pulling countries together in ways that are going to be somewhat of a disadvantage to american firms as american firms face tougher

regulations or tougher tariffs than some of the countries that are now part of these fdas and uh and the like the last point i want to make in regard to the united states is just the tremendous domestic obstacles that are going to be faced by abide in administration we first have the you know the incredible economic problems the united states is facing huge debt uh 3.1 trillion dollars in in the deficit right now and the uh that runs up against the fact that to make america competitive again is going to require

huge amounts of money it's going to require tax reforms it's going to require a willingness to take on borrowing for long-term benefits but that's going to run headlong into the protectionist sentiment that barry correctly identified as being bipartisan as well it's not just the mega trumpets but also a big wing of protectionists in the in the democratic party that are firmly convinced that globalization is the heart of the problem rather than technology and they're going to resist efforts by biden to

improve some of the things that need to be improved in terms of globalization and then finally i think it's just important that foreign analysts and observers recognize the deep partisan character of the american polity these days and so the binding administration regardless of what it's trying to do is going to face a republican establishment that is going to do its best to deny giving biden any kind of victory whatsoever the senate is likely to remain in republican hands the courts are completely under

the control of the federalist society these days many state governments are under tight republican control and for the most part they're going to line up against any kind of changes in the tax structure they're going to line up against many uh re-regulation of environmental rules et cetera et cetera so for the binding administration it's going to be a very tough uh path to pursue and it's not going to be very easy and i think he's going to be facing problems both in asia and in washington dc as he tries to

move forward so let me stop on that note thank you uh thank you tj uh the fascinating uh tremendous obstacles uh sound frustrating um now uh let's uh turn to our um discussion uh uh over to you thank you oh yeah actually both variant tj touched upon many issues well but i would like to take up two issues one is about decoupling of supply chains and another is about rsap actually of course uh tj also mentioned uh mentioned about the rsa in a passing way i would like to highlight some aspects of the answer for

my as a second question uh my first question is of about decoupling but because these days the coupling is a kind of buzzwords these days and in the wake of the global proliferation of kobe 19 the vulnerability of global value chains has been clearly revealed uh that's one of the reasons why we are having a numerous discussions about the restructuring of global value chains at the same time u.s china strategy competition emerged as another factor that facilitates the restructuring of global value chains so my question here

is that what do you think would be the future trajectory of the global value chains in the coming years uh how and how much do you think will geopolitical factors affect the global value chains reorganization process and another related question would be that what kind of policy changes will byton administration will make in terms of the trump administration's decoupling policies also do you think the vitals administration will continue to seek economic prosperity network as a means to induce cooperation from allies and

partners well it will be abandoned or and on another related question would be that what kind of cooperation dividend administration will seek from south korea in the process of decoupling that is to my first set of questions and the second question would be about i'll say as is well on the east asian countries finally managed to conclude also negotiations which took almost eight years how do we define the primary nature of the rsap and what would be the impact of ourselves on the asian regional economic

order and also given that also was understood as an initiative led by china and the president-elect biden made it clear that not china but the u.s can write the trade rules in the 21st century and also he made it clear that he will seek to strengthen cooperation with them democracies in the region so my question here is that what would be the primary nature of the regional economic strategy of the united states particularly under the biden administration in the coming months and and related question would be what kind of

cooperation dividend administration would expect from south korea particularly in redesigning the regional order after the isaf conclusion let me stop here thank you do you um want to pose those two set of questions to both speakers or do you want to designate each one and the second one is directed to tj thank you so um great questions but as soon as you you're supposed to answer them not only pose them as discussant um i think the notion of decoupling is misplaced or mistaken uh tj put it well the two

economies are too interdependent for anything that any any picture that springs in your mind about what decoupling would entail to become reality um i think you know apple is going to continue to assemble uh iphones in china under almost any conceivable circumstance that was true through four years of trump and it will certainly be true through uh four years of biden uh i think the strategy the the goals of of the biden administration are to on on the narrowly economic front to try to encourage china to continue to

allow its currency to be more market determined just as it has recently uh to strengthen its uh intellectual property rights regime to make clear that soes are not engaged in in what we might call industrial espionage and beyond that there will be two-way flows of uh foreign direct investment into sectors that are not sensitive from a defense and security point of view and i i would expect that to continue the question is how will it go about uh trying to advance or achieve those goals number one through

engagement with china which has not exactly been a strength of the trump approach engagement constructive engagement rather than antagonistic confrontation and trying to get other governments like seoul to be on the same wavelength in terms of pushing china in those directions let me uh let me try to pick up one or two threads from that and uh and then move on to the question of rsep and and alliances and the like i guess the the other thing that i would add on the uh on the trump i mean on the economic policy for east

asia would be that my guess would be that biden will continue to keep the tariffs in place that uh are there now i don't think we're going to see those shredded very quickly much as you might argue against them they do provide a powerful weapon for the biden administration and it's dealing with dealings with china i think you're going to see um you know tariffs are not going to be continued on various of the american allies whether japan or korea or elsewhere but i think those on china are likely to continue at least in the

short run but um in terms of our sep and other regional organizations regional economic uh arrangements my guess would be that the biden administration is not going to join those simply for the for the simple reason that that i tried to lay out earlier that there's such a strong protection of sentiment in the united states against these multilateral bodies i think the the multilateral approaches that the byte administration will try to make will be much more along lines of apec the east asia summit

etc where you can go out you can schmooze with with leaders from other countries try to deal with multiple issues simultaneously and try perhaps to press for greater liberalization i think though that as i tried to suggest american companies are going to be at a singular disadvantage with regard to many of these mini lateral or multilateral free trade agreements including rcip because tariffs are being reduced or regulations are being reduced i think barry can probably speak to those much better than i but my sense is that

they're not going to be huge incentives for the participants to trade with one another but they're still going to present substantial barriers to uh to many american firms as we saw with the tpp when it became the cptpp and the the american american government under trump quickly insisted to japan that the us be given the same agricultural access to the japanese market that it would otherwise have had if it was in tpp uh clearly it was being disadvantaged uh in favor of agricultural products from thailand or

from australia or from new zealand etc so my guess would be that the united states is going to try to cut as many deals as it can for as many powerful companies as it can but without joining those organizations but i think we'll still see a planting of the american flag at these other uh institutions that america is part of like the east asia summit or apec or arf and i think there's going to be a lot more efforts to improve multilateral diplomacy with regard to north korea for example and avoid the kinds of showboating

and photo op silliness that that trump was engaged in with north korea that's not going to be an easy issue to deal with and it's certainly going to be a lot easier to deal with if the united states can get along and get cooperation from south korea from japan and even from china thank you um uh before i'm moving um on to uh the questions from the audience i have um a couple questions uh to you one is um is that uh barry just uh touched upon um the issue of national security and uh in trade uh in economic policies it's like

it's about uh the balance between um you know economic independence and national security um here in china yes there are economic problems and also you can invoke national security in certain practices like following certain vulnerability in the networks of whole and also trump made it explicit that we don't want to try to uh challenge the united states so we want to slow down and put every uh way of uh measures to uh slow down or deter uh the chinese rides et cetera so all um you know different uh

the cases of uh protecting american interests so how we you know differentiate or make it separate and you know have their own um logics of applied to a particular trade policy and muster support from your neighbors your allies for example um the third element that i mentioned it's kind of you know protection for the ceremony competition it's really hard for countries like south korea to accept and then take side with the united states um and also the national security clause for example section 232 that applied to

right korean steels and aluminum and it's hard to swallow so uh how uh can we view this um invocation of natural security in so i think trump's uh recourse to security concerns uh in order to slap tariffs on uh shiny steel uh discredited in a way uh those security concerns more broadly i i i would say that uh uh good security relations and good economic relations go together uh south korea and the us have a strong trading relationship in part because they've historically had a strong security relationship as well my own

work uh looks at at financial flows and reserve holdings countries hold the the currencies of their alliance partners as reserves the economics on the one hand and the security relationship the alliance uh go together with one another and conversely to the extent that uh there are greater tensions in the security relationship between the us and china that does spill over obviously into economic tensions no doubt um you said one thing i i kind of disagree with which is that uh the goal of the united

states is to slow down china's emergence as an economic force in a security force i don't think we can slow china down all we can do is to try to speed the us up and tj had some ideas about how to achieve that just for fun let me uh modestly disagree with a couple of things that tj said uh i disagree with the point that uh the u.s is constrained by its debt because the uh interest rate on the debt is below the growth rate of the economy and in my view that's going to remain the case for many years now going forward

which means that we can outgrow our debt and we can add more without creating a problem i put complicated economics in a in a very simple way but that is my view um the other point uh i i would stress is that i i think it's the in uh in terms of u.s engagement with the world it's the domestic politics in in the united states that are the binding constraint but in a different way than we've talked about so far re-engaging globally uh re-engaging multi multilaterally turning back the economic isolationist

measures requires addressing the concerns and problems that led those measures to be adopted in in the first place and created some popular support for trump namely we don't have an adequate social safety net in the united states we don't provide access to health care for people that need it we don't have an adequate minimum wage we don't invest enough in uh preschool education is the republican-controlled senate assuming there is a republican-controlled senate going to go for any of that and if not uh the us is not going to

re-engage let me jump and not just defend myself on one point that barry made i think he made perfect sense economically that it would make its view it should not be constrained by its debt i fully agree but i do think that the republican republicans in the senate are now laying the groundwork to say that my god we've got tremendous debt uh yes we created it but we can't put any more in play opposition to the uh continued financial and uh fiscal stimulus for dealing with the coronavirus problems

whether it's local government uh whether it's uh ppe uh stimulus checks whatever all of this is now being resisted in part because the republicans are claiming that the debt is too large we can't afford any more so i fully agree that economically it makes perfect sense to borrow money and do infrastructure and do a whole variety of these things but i think for political reasons that's likely to be um opposed and uh i want to just make uh one or two more points uh very briefly but um i think that the that the economic and

security links are certainly going to be very important my guess will be that the united states will probably take a much lower profile with regard to its economics in terms of engaging with east asia trying to win friends and allies for tangible and specific targeting of problems in china but i think the us is going to be equally focused on trying to resuscitate some of the security alliances and uh to do its best to build up ties with south korea with japan with vietnam etc but i would point out one more thing

that i think where i at least i'm starting to recognize and that is that the belton road initiative and china's use of aiib money is increasingly moving in the direction of southeast asia central asia around south asia and in many ways this provides china with a way to advance its economic and security profile globally while avoiding the more touchy issues or touchy geographical spots in northeast asia that the united states has traditionally found its biggest partners in so china will be in many ways not contesting the united

states links to japan or south korea or even taiwan directly but it can expand substantially in areas where the united states has traditionally not been deeply involved thank you um pj uh one question to you like i said before korea um is uh economically uh dependent or asymmetrically independent with china so uh that means that uh china has uh leveraged to influence korea's foreign policy um if united states uh like you know barry mentioned four economic issues uh you know urge south korea to be in their side which obviously uh

you know country did chinese interests and should be a legitimate worry uh from korea that china will retaliate with various economies we saw that in so-called the fat case in uh you know 2018 that uh you know korean people sad equipments to korea right uh created huge foreign policy crisis here so that's the case and also we see um so in that sense uh how uh if united states sort of you know trying to make a collective approach to china on various issues if any of the countries in asia your friends

are in danger of retaliation what would it be the next step what what can you know uh united states and uh u.s allies and partners can do uh or some sort of you know collective approach to uh potential chinese retaliation um and uh relating to that uh you know japan last year uh you know mr abellos kind of you know uh followed uh trump by uh you know making export controls right to uh a few uh you know semiconductor uh components uh uh to south korea and you invoke national security uh to justify

that uh economic that actual control behavior so uh that also um is kind of uh related to uh this broader issue of national security i mean it's a powerful and important question powerful important question and i guess i would simply say that china will do its best in every situation to deal with countries bilaterally because 99 times out of 100 china will be the stronger of the two partners of the two negotiators certainly that's true in south korea it may not quite be true with japan but certainly it's true with all 10 of

the asean countries it's certainly true with regard to taiwan etc and so i'm i'm i mean i i shouldn't be giving cheap advice to uh to korea but it seems to me that one of the problems that uh the blue house faces is that it does allow itself to get boxed in on this bilateral relationship with china rather than reaching out to uh probably ready allies whether you're talking about japan and i know that's very difficult or the asean countries etc uh you know in my view uh korean policy makers spend an inordinate amount of time

thinking about the korean peninsula as a territory unto itself when in fact now the you know the issues that involve the dprk or possible invasion or possible security uh threats go much deeper and at the same time korea has potential allies in many other parts of the region so i would love to see less focus on the korea question and the self-absorption of korean scholars and policy makers with what do we do with the north and how is everybody going to help us deal with the north uh and start thinking a little bit more

about what positive role can korea play in the rest of the region how best can it cooperate with countries that will allow it to enhance its own uh bargaining with regard to countries like china you know japan plus korea plus the united states dealing with china is a lot more likely to be effective on something like intellectual property rights or pushing back against uh cutting off of particular key components then korea is ever going to be able to do by itself so um you know that that it seems to me is

uh is something korea has this look south policy now which i think is probably a plus but as i understand it it's still largely focused on economics and i think looking south would be something that asean countries would welcome certainly taiwan would welcome warm relations with korea and a little bit more effusive and expansive south korean policy with regard to the rest of the region would probably be a plus and if the administration could do anything to facilitate that i think that would be a

plus but clearly the first hurdle as you and i know is going to be just getting any measure of cooperation between japan and korea um you know it's it's easy to cooperate with uh with singapore the issues there aren't uh quite so deeply embedded but japan hasn't been the greatest player in this relationship either but uh getting those two to look at 2021 instead of 1930 or 1925 or 1940 would be a plus in my view one point about the possibility of china's economic retaliation on south korea actually this is not the

uh like problems that only south korea faces actually these kind of problems actually widely shared with other east asian countries so i i don't think the south korea can come up with the one one policy or rather uh i think it's gonna be better for south korea to come up with the kind of the combination of many policies to deal with the uh possibility of china's economic retaliation the first one is that like strengthening the bilateral cooperation with the united states would be the very useful means to reduce the

possibility of china's economic retaliation but at the same time secondly so uh i think it's gonna be very difficult if not possible very difficult to deal with china's economic sanction by resorting to bilateral relations or bilateral diplomacy that's one of the reasons why we need the regional strategy a regional diplomacy because there are many other countries in the region that share similar concerns with south korea so we we better to seek cooperation with those countries in the region so we have to combine the bilateral

cooperation with the united states on the one side and as well as the regional cooperation on the other side at the same time lastly uh we also have to deal with the uh we try to make an effort to reduce the structural uh limitations of our structural vulnerabilities that's one of the reasons why we have to uh proceed the reorganization or restructuring of the global value chains so we have to approach this issue and not in terms of the decoupling but in terms of the diversification of the economic relationships or

diversification of the global value chains yes it's gonna be a very useful means to reduce the korea's economic vulnerability in dealing with possible china's economic sanctions so my point here is that we have to combine various policies in order to effectively deal with china's economic sanctions thank you thank you for your prescriptions um for the government um now uh the audience question um i got a bunch of questions uh one um this one goes to uh barry um this is where you uh excels everybody uh there's a looming

courtesy uh this question uh from uh professor of korea university uh looming currency competition as china is rising you wrought sometime after 2008 financial prices that there will be a multi-currency system coming do you still hold that uh position and what's your prospect for the status of chinese currency i do still hold that uh position i've been um predicting movement in the direction of a more multi-polar monetary and financial system and i'll keep predicting it until i'm right um i do think the united states can't

provide safe and liquid assets all by itself to the rest of the world indefinitely because the rest of the world will to an extent catch up to be expand relative to the us so there is going to have to be a more diverse supply of those safe and liquid assets and just like biodiversity makes for a a safer place i think financial diversity will also the question is where the diversity will come from um i think it will come first from europe because europe is more open financially europe is more developed

financially europe is having its mini hamiltonian moment financially whereas china has a lot more ground to make up if you look at transactions through swift the society for worldwide international financial transfers china accounts for 1.8 percent in the most recent month reported where the u.s accounts for 50 percent and and the euro area for 30 percent so uh the renminbi is coming as a global currency but it is starting out way behind china has a strategy for renminbi internationalization that

suffered some setbacks in 2015-2016 i think it remains committed to the goal in the same way that a first-class country should have an aircraft carrier and a national flag airline it should have an international currency the argument goes and i think chinese officials believe that they're just going to have to be very patient thank you uh uh the question uh to uh tj professor kampala nation that one policy prescription for the united states in order to compete with china is uh there's a series of areas

such as high-tech renewable energy where the united states is sluggish could you elaborate more uh on this point uh how how can united states yeah i mean basically i start from the i start from the premise that the united states particularly under the trump administration has been very slow to provide support for science and technology it's focused very much on fossil fuels it's focused very much on manufacturing i think america's future is clearly going to lie america's economic future is clearly going to lie

in greater success in higher tech in advanced industries and the like much as china i think has recognized it with its made in china 2025 logic so the united states has to begin moving for example away from fossil fuels and into solar or wind or other renewable energies we know that more jobs are being created in those sectors of the economy than in fossil fuels or in coal or anything of the sort and i think it becomes you know an important selling point for the biden administration to make clear

particularly to folks in the in what you might think of as the red states that if the united states can begin moving in this direction there are jobs to be had for people who don't have a college education who are capable of you know installing solar panels or you know racing towers uh for uh wind energy et cetera et cetera i think it's also important to do more in terms of supporting um the science that's linked to dealing with vaccine problems dealing with world health returning to the world health organization but

bolstering the american scientific uh community and i think the united states really has a great deal more to be done in terms of support for artificial intelligence uh and the like so you know it seems to me that american does not lack in in ingenuity on these things i think it's really a matter of putting a little bit more government shoulder behind the wheel and the last thing that i think is important in this regard is you know a change in immigration policy in the united states would be in all likelihood a very positive

uh impetus for greater technology we we know the numbers in seoul in in silicon valley but a huge number of the startup companies there are formed by immigrants who come to the united states with uh not a whole lot of money but an awful lot of brain power and you know companies like google um are uh you know are very dependent on uh you know on on immigrant uh immigrant workers and i think all of that would be um moving away from it it would be embracing shrimpitarian creative destruction simply recognizing that the united

states is no longer going to be a great manufacturing company some things should be manufactured in the us but that's not where the future is going to lie it's going to lie in services it's going to lie in higher tech et cetera harry uh let me just uh um issue a little bit more uh in your book that i mentioned you know the populist temptation um you know after the election still we were saying you know trump isn't after trump or donald trump um do you do you think that this you know populist tendency

will continue during the violent administration and or so the um simple explanation for populism i offer in my book is that it reflects a pair of concerns number one economic insecurity and number two identity politics fear of the other which is weaponized by certain politicians um as i said before i have my doubts about whether we will effectively uh deal with uh the economic and security problem anytime soon because that doing so will require cooperation between the administration and the congress

it will require the house and senate to pass bills that uh either uh address uh the source of that insecurity or better provide the kind of uh compensation and and adjustment assistance that uh people who are hurt by the destruction part of tj's creative destruction are are very aware of i think we know how to address those concerns and the issue is do we have the political will to do so or not on the identity politics i think that really uh reflects uh fear of the other and the way that fear of the other is

weaponized we are now going to have a president who will ratchet down the rhetoric and try to counter the efforts of others who weaponize that fear and that will be a positive uh to be sure unfortunately i think the uh uh uh addressing uh the that concern more broadly will take time i think about how to uh deal with these identity pro uh uh politics problems in my book and i say well there there's a lot of literature in sociology and economics and elsewhere that shows when people actually encounter immigrants they

grow less fearful of them or when they actually interact with people of other religions they are less suspicious of them so what can we do we can promote residential integration we can promote the integration of schools and that will go a long way to solving the problem over a period of decades in other words it will take time for those attitudes to change and that worries me given where where we're at at the moment another question to you uh china is on the way to develop this digital currency how will this play in the religions

among u.s south korea and china i i think not very much um china will be the first country of consequence to roll out a digital currency and that will uh at least modestly enhance the attractiveness of using its currency the renminbi for cross-border transactions but i also saw a survey of merchants in seoul a couple of months ago where they were asked uh are you happy to take alipay and from chinese tourists when they buy something from you and everybody said yeah sure and then they were asked would be you be happy to take a chinese

digital currency in payment for uh purchases by tourists and they said tell me first whether that uh digital currency would have a back door whether it would be a a mechanism for for surveilling my transactions as well as those of chinese residents so i think more generally uh every consequential international currency in history has been the currency of a political republic or democracy that china you know china's the people's republic of china but it doesn't have the checks and balances on executive power in place that would

reassure people who might otherwise be tempted to use its currency digital or otherwise i see thank you um i think uh that's going to be the last question to uh tj um you mentioned uh mercantilism we saw that in uh almost uh every phases of uh academic growth in east asian political economies japan korea taiwan so is it um that uh the mercantilism that you mentioned is isn't just uh the same um just stage of economic growth that we saw in the history of east asian academic development or is it just a

different kind i mean is it really a different kind so that you need a different kind of approach to deal with this yeah i guess i mean the the the success of uh japan korea and taiwan did in my view rest very heavily on the fact that they could protect their domestic markets from a great deal of competition while having relatively open access to global markets but i think the united states uh as one of the leaders of that global liberal order by the time the cold war began to wind down and i would start it in asia with you

know china's moves toward accepting the deng xiaoping reforms uh so it's you know you don't have to wait till 1991 for the collapse of the soviet union to see the cold war breaking down but the united states for domestic reasons and uh and global reasons really began to push back against particularly against japan but also against korea uh in particular and uh began to push for more openness more uh domestic liberalization uh for radical currency uh readjustments and so forth uh for the most part

the united states has tolerated and i guess the rest of the world to a large extent has tolerated that same philosophy within china and barry put it in the context of china demanding uh to be treated as a poor developing country when in fact its living standards are you know have vastly improved and it's no longer in that situation so my feeling is that um that this is not just a stage that countries go through it was one that was very deeply linked to america's and to a lesser extent europe's tolerance of japan

korea and taiwan but the heavy dependence of all of their exports on the u.s market made it powerful for the united states to not be pushing back now we're starting to see some pushback against china and my sense is that china is going to be anxious to move toward more of a service economy i don't know how barry feels about that but to move toward higher tech and the like and move away from some of the low end packaging and manufacturing that were endemic to its uh its original growth but i don't i don't see ultimately

china wanting to see non-chinese at the heads of corporations non-chinese taking out big chunks of money non-chinese shaping the direction of the economy i think the communist party wants to very much remain that final authority and i think ultimately it's going to want to be able to cut deals with han chinese in the advance of the economy and do its best to uh prevent foreign intervention in any way or foreign penetration in in serious ways and that it seems to me is is where western european countries

companies and the united states and and south korea and japan have a collective interest in trying to dismantle that economic policy of the economic regime that's been so successfully advancing china's growth thank you um i uh yell time's up after 11 40 a.m here in korea so uh let me uh let me conclude um uh thank you so much uh barry and pj for your uh wisdom um and you know intellectual power uh commanding all the sorts of uh issues and questions and also i uh thank you for your great participation today

um this is uh the fourth and final of uh you know after trump's series and we have uh you know covered uh you know election and domestic politicians in the united states uh you know by the administration foreign policy and the alliance between us and um korea uh under violent administration and then foreign um rough conclusion uh is uh yeah by the administration you'll see uh continued change but not much uh more than expected in in various uh aspects of food policy uh and economic policy so though

and also kind of you know common uh conclusion that the new administration will be stifled uh with the domestic policies uh shockingly divided you know politically ideologically and racially so um you know we have uh very keen interest in china and chinese development uh change and also we really need to look closely into uh what's going to happen uh in the united states politically economically policy so with that said uh let me conclude uh thank you so much i still have uh many questions left on

insert um from the audience but i'm sorry about that um again thank you so much and thank you bye thank you for having me thank you for organizing it thank you