South Korea negotiates with the United States on “restrictions on investment in China”

“South Korean industry submits opinion letter to the US government on ‘restricting investment in China’, and South Korean companies must not be harmed.” South Korea’s Dong-A Ilbo reported on the 16th with this title that South Korean industry submitted an opinion letter containing concerns to the US government as the policy of restricting US capital investment in China’s cutting-edge industries is about to be implemented. Because the regulations are vague, South Korean companies that have local legal entities in the United States or accept US investment may also be unable to invest in China.

According to the report, in June, the US Treasury Department legislated a comprehensive ban on Americans and US companies from investing in China’s cutting-edge semiconductors, artificial intelligence (AI), quantum technology and other cutting-edge industries, which are expected to be determined and implemented within the year. Although it is aimed at US capital, due to unclear policies, if a little US investment is accepted, it may also become a restriction target. These include local US legal entities of South Korean companies, South Korean companies with Americans participating in decision-making, and US companies with factories in South Korea.

In response, the director of the International Trade Department of the Korea Chamber of Commerce and Industry stated in the report that there are potential regional risks in the restricted objects, and the regulations are relatively vague, and the policies and regulations that foreign companies should follow should be clearly defined. South Korea’s Asia Daily reported that if the new rules are extended to foreign citizens, it may hit the actual investment that the United States can make, thereby weakening the competitiveness of the United States, and cooperation with South Korea and other countries will also be affected.

According to South Korea’s Herald Economic Daily, this is the first time that the Korea Chamber of Commerce and Industry has sent a formal opinion on the U.S. Treasury’s legislative notice. The opinion submitted this time was written after listening to the opinions of relevant Korean companies, and the Ministry of Trade, Industry and Energy of South Korea also participated in the discussion of materials.

Related people in the Korean industry said that the US government is still collecting opinions and the progress is attracting much attention. Before the final bill is introduced, the relevant departments hope to reflect the opinions of the Korean industry to the greatest extent and not have too much impact on themselves. The person also added: “At the current level, the number of companies affected is very wide, which is worrying.”

If the new US regulations are introduced and implemented, the investment in China by Solidigm, a local company established in the United States, which was acquired by South Korean chip manufacturer SK Hynix for 11 trillion won (about 58.9 billion yuan), may be affected. Because NAND used in large-capacity data storage devices, the core business of Solidigm, is produced in Chinese factories. In addition, artificial intelligence ventures that have received investment in the United States and Korean companies based in Silicon Valley may not be able to enter China.

The Dong-A Ilbo quoted a Korean business person as saying, “There are less than 80 days left before the US presidential election, but no matter which candidate comes to power, the position of public regulation may not change.” He added, “If the US regulation of public investment in high-tech industries is implemented in its current state, Korean companies will be very uncertain.”

In addition to the concerns of the Korean industry, local US industries, including the Semiconductor Industry Association (SIA), also opposed the proposed regulations, saying that “unilateral restrictions on public investment will damage the industrial ecosystem and lead to a decline in the competitiveness of US semiconductors.”

Source: Huanqiu.com