Integrating the supply chain, China, Japan, and South Korea have significant economic and trade interests

According to trade data released by Japan, Japan had a trade deficit of 604.1 billion yen in February, compared to a previous deficit of 3181.8 billion yen. Japan has been running a trade deficit for 19 consecutive months, and if nothing unexpected happens, this data will continue.
The exports of South Korea, another export powerhouse in East Asia, are also not satisfactory. According to data released by the South Korean Customs Agency on April 11th, the total export value of South Korea from April 1st to 10th was $14 billion, a decrease of 8.6% from $15.3 billion in the same period in 2022; The import volume also decreased by 7.3% to $17.4 billion. The contraction of South Korean exports is mainly due to the decline in semiconductor exports, most of which is due to the decline in chip exports to China.
Even against the backdrop of a continuous trade deficit, Japan implemented export controls on 23 types of semiconductor manufacturing equipment, including China, at the end of March, which will be implemented in July this year. Japan's proposal to launch this plan is not accidental. After the introduction of the Chip Act in August last year, the United States tried to attract Japan, South Korea and Taiwan, China to form a "four party alliance for chips", but South Korea refused to do so. This year, the United States formed a semiconductor "blockade alliance" with Japan and the Netherlands, collaborating with Nikon, Tokyo Electronics, and ASML from the Netherlands to strictly control the export of semiconductor lithography machines. Recently, a spokesperson for the Ministry of Commerce of China responded to Japan's announcement of plans to implement semiconductor export controls and stated that China has filed a lawsuit with the WTO.
Due to a lack of innovation, the Japanese automotive industry is currently facing significant challenges in the context of increasingly updated international automotive technology. Car manufacturers are relatively backward in the field of electric vehicles, with the most obvious being the old Japanese car companies represented by Toyota being forced to test the water in the pure electric field. However, a series of operations have been carried out with little emphasis and lack substantial progress. In the past decade, after repeated deliberation by Japanese car manufacturers, Japan has chosen the path of "hybrid+hydrogen fuel cells" in the fields of electric vehicles and hydrogen vehicles, and has invested a lot of resources in it. Due to a series of issues such as the production cost and safety of hydrogen energy, Japan has lost its lead and a large market in the field of electric vehicles, and has shaken its position as a "major automobile country". The significant sign is that from January to February this year, China's automobile exports surpassed Japan for the first time, becoming the world's largest automobile exporter. This makes Japanese car companies, who have always been proud of the automotive industry, very embarrassed. As the product with the longest industrial chain in the manufacturing industry, the gains and losses of automobiles play a crucial role in the rise and fall of a country's economy. Nowadays, Japan has missed a turning point in the global automotive competition due to a mistake in track selection. Faced with the rapid development of electric vehicles in China, it is inevitable that Japan has a complex heart. In the face of China's industrial competition, South Korea also faced the same situation as Japan. For example, in the automobile and shipbuilding industries, South Korea faced the challenge of the rapid development of China's related industries in the international market. Just as China encourages the development of electric vehicles, electric vehicles are also a sunrise industry vigorously developed by the South Korean government. According to data released by the South Korean Ministry of Industry, Trade, and Resources, in 2022, South Korean automobile exports increased by 16.4% year-on-year, with new energy vehicle exports increasing by 36.8% year-on-year to 554000 vehicles. Currently, South Korea is seeking a significant increase in the production of electric vehicles, with plans to increase production capacity to 3.3 million units per year by 2030, bringing the share of local automakers in the global electric vehicle market to 12%. On April 11th, South Korean President Yoon Seon hyeon attended the opening ceremony of an electric vehicle dedicated factory at the Kia Motor Park in Wah City, Gyeonggi do. He stated that he aims to increase South Korea's electric vehicle production capacity to five times its current level by 2030, and develop South Korea into one of the three major automobile powers in the future. In the future, with the saturation of the international electric vehicle market, the situation of face-to-face competition between China and South Korea's electric vehicle industry will eventually come, which will have an impact on the economic and trade relations between China and South Korea.
In the shipbuilding, the competition between China and South Korea is becoming increasingly fierce. With more domestic shipyards entering the liquefied natural gas (LNG) industry in 2022, Chinese shipyards have undertaken a total of 59 LNG ships, accounting for 32% of the market share. In the same year, South Korean shipping companies received 122 LNG ship orders, with a market share of 67%. Currently, China and South Korea shipyards are engaged in a LNG ship production capacity competition, each hoping to share a larger share of the cake. Faced with the latecomer of Chinese shipping companies, Korean media stated that a major issue faced by Korean shipping companies is that Chinese shipping companies are preparing to launch an offensive in the high value-added ship market, including LNG ships, through price competition. With the intensification of homogeneous competition in exports between China and South Korea, the economic and trade relations between South Korea and China have shown a different situation from before. On April 10th, South Korea's Deputy Prime Minister in charge of the economy and Minister of Planning and Finance, Chou Kei ho, stated that the era of large-scale trade surplus between South Korea and China has come to an end.
But on the issue of semiconductors, South Korea's attitude is not entirely the same as Japan's. Due to pressure from the United States, South Korea is not allowed to export high-end chips to China, nor is it allowed to export high-end chip manufacturing equipment and technology to China, which directly impacts South Korea's export trade with China. However, even so, South Korean semiconductor companies are still unwilling to give up on the Chinese market, mainly because multiple South Korean semiconductor companies have established core production bases in China, including chip giants Samsung, SK, and other companies. It can be said that China is the most important semiconductor market in South Korea. Due to deep ties with China in semiconductor interests, South Korea has always held a non cooperative attitude towards pressure from the United States. But in the future, with China's rise and development in this field, South Korea's attitude towards China in the semiconductor industry may change.
After decades of development, the economic and trade relations between China, Japan, and South Korea have become increasingly interconnected, while competition has also become more intense. Although the demand for signing a free trade agreement among the three parties is urgent, years of efforts have been unsuccessful. The economic and trade relations between China, Japan, and South Korea have always been in a process that needs to be straightened out due to their respective and mutual reasons. At present, there has been a turning point in the relationship between Japan and South Korea, but the trend of intensified competition and weakened complementarity in China's and Japan South Korea's export commodities has added to it, making the economic and trade relations between China, Japan and South Korea still in a state of continuous cutting and chaos. But fortunately, the Regional Comprehensive Economic Partnership Agreement (RCEP), which was implemented last year, fully incorporated China, Japan, and South Korea into the regional free trade agreement, establishing free trade relations between China, Japan, and South Korea for the first time, filling the gap in the multilateral free trade zone in Northeast Asia. Former Chairman of the Sejong Research Institute in South Korea and former Special Assistant to the President of South Korea for Unified Diplomacy and Security, Wen Zhengren, clearly saw that "South Korea, China, and Japan will benefit greatly from strengthening tripartite economic integration, including integrating supply chains. Conversely, if any country withdraws from cross regional supply chains, all three countries will face losses