[Eric Kim] G-7 2023: Are we repeating history?

I did a recorded interview two weeks ago for the G-7 summit held in Hiroshima. This year’s summit marks the 50th year of G-7, which started in 1973. South Korea was invited as a guest amid the United States pushed for an initiative to decouple with China.

The latest G-7 summit was seen as a parallel to the 1980s when Japan started to rise against the US on the global stage. Japan’s rapid rise came after the US transferred semiconductor technology to Japan, laying the foundation for the emergence of major Japanese electronics and automobile companies such as Sony, Panasonic, Toyota and Honda.

The development, however, resulted in the US trade deficit with Japan from the 1960s through 1980s by importing a large volume of Japanese electronic goods and cars. The strong exports of goods helped Japan to gain full confidence for its supremacy in the global economy.

Symbolizing the growth of Japan as an economic power was the book titled “The Japan That Can Say No.” It was published in 1989 by Shintaro Ishihara, a former minister of transport and a leading member of the Liberal Democratic Party in collaboration with Akio Morita, Sony co-founder and chairman, to assert the superiority of Japan.

Things have changed. In recent years, China has emerged as a global economic player. If published today, there would be a book titled “The China That Can Say No,” written by one of the party leaders of China and a CEO of a major Chinese tech company.

The US eventually made Japan sign the Plaza Accord in 1985 to strengthen the yen to resolve the problem of the US trade deficit with Japan, as part of a proceedings to the G-7 discussion.

But this is now interpreted as an initial event that triggered a series of developments that made Japan struggle in the “lost 20 years“ after the real estate bubble burst in 1991.

During the recent summit between President Yoon Suk Yeol and US President Joe Biden, a journalist asked Biden whether the Chips and Science Act is designed to keep China at bay. Biden replied that the US invented semiconductors and it allows manufacturers to build chips domestically or overseas.

Biden’s comment sums up the consistent position of the US, which leads the global economy while considering its technological supremacy and trade balance.

The US requested Korea to participate in the trilateral tech alliance. The Korea-US-Japan alliance offers opportunities to Korea, as the country is the front-runner in the global semiconductor industry and Japan manufactures vital raw materials for semiconductors. This marks a major reshuffle of the global semiconductor supply chain, with the three nations moving to strengthen their partnership for the chip supply chain.

The principle of diplomacy is to give and take. As Yoon said that Korea will take a more active role in international society during the Korea-US and Korea-Japan summit talks, it is high time for Korea to fully leverage its leadership in the technology sector and persuade its partners so that Korea can join the G-8. This is a long-term project. Korea should make efforts with a focused vision to become a member of the G-8 in the future.

Sung Soo Eric Kim

Sung Soo Eric Kim is adjunct professor at Hanyang University and Ulsan National Institute of Science and Technology (UNIST), and the founder and CEO of Datacrunch Global. -- Ed.