Chinese businesses are aggressively looking for chances to invest in Korea’s battery sector to get over American EV laws and utilize it as a gateway to the American market. Five new battery plants in Korea will receive an investment of nearly 5.1 trillion won ($4 billion) over the previous four months, according to Chinese corporations and their Korean partners. This presents a challenge for the Biden administration, which wants to reduce China’s influence in the supply chain for electric vehicles.
The US has aimed to reduce China’s influence in the production of electric vehicles and the global battery market in past years. To boost domestic production, the Trump Administration put duties on imports of lithium batteries from China in 2019. Chinese businesses continued to actively hunt for possibilities to grow their operations even though these efforts had little effect on the market.
Chinese businesses are aware South Korea is among the world’s top producers of batteries and has close ties to the US market. Chinese businesses can avoid US rules and set up production close to the US market by investing in the Korean battery industry. As a result, they will be able to lower shipping expenses and raise the competitiveness of their goods.
Five new battery plants in Korea have been launched by Chinese corporations and their Korean partners during the past four months, with a total investment of 5.1 trillion won. These investments will aid in generating new jobs and accelerating Korea’s economic expansion.
At least one local government is discussing more battery industry initiatives in addition to the investments that have previously been publicized. This shows that Chinese businesses are becoming more interested in making investments in Korea. Additionally, these investments might have a long-term impact on US, Chinese, and Korean relations.