Issue Strengthening Korea's strategic flexibility and leverage with both powers

Summary

Amid a deepening and lengthening US-China conflict, the report treats strategic flexibility as the most important condition for pursuing interest-based foreign and trade strategies. It proposes strengthening Korea's existing leverage with both powers and its leverage as an alternative supplier as their economies decouple. It also calls for a stronger institutional base for flexibility, including an upgraded Korea-China FTA, a China-Japan-Korea FTA and regional agreements such as RCEP and CPTPP. From Washington's viewpoint, Korea is a key partner for building semiconductor manufacturing supply chains, restoring critical mineral supply chains and containing China technologically. Beijing, meanwhile, sees Korea as a balance lever on the front line of the rivalry, a US ally that has not fully joined an anti-China front and a small but pivotal power in China's advanced industries and supply chains.