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Historic Summit at Camp David

Aug 22, 2023

On August 18, US President Joe Biden hosted South Korea's President Yoon Suk Yeol and Japan's Prime Minister Fumio Kishida for a summit at Camp David, the same place where Jimmy Carter helped brokering peace between Egypt and Israel in 1978. The meeting at the presidential retreat signified the first official meeting among President Biden, and the leaders of Asia's two largest economies after China, his South Korean counterpart, Suk-yeol, and Japanese Prime Minister Kishida.

The summit serves as yet another testament to President Biden's continuous efforts at reestablishing America's alliances within a region inherently vulnerable to geopolitical fluctuations. This further emphasizes the importance of collaborative ties in maintaining stability and effectively addressing common challenges. These shared challenges, as anticipated, revolve around China's increasing assertiveness in the Asia-Pacific region, coupled with a recent series of North Korean missile tests.

Despite a relationship that has remained strained since Japan's conclusion of its 35-year occupation of the Korean peninsula in 1945, the two East Asian states have become increasingly apprehensive about these challenges. This amplifies the significance of the summit's facilitation, where South Korea, in particular, demonstrated its willingness to join a US-led trilateral alliance with fellow Quad-member Japan; which is increasing its defense spending and is projected to possess the world's third-largest defense budget by 2027.

The trilateral concerns regarding China have evolved significantly, particularly in the realm of national security and critical technologies. This stems from the reiterated focus on shared security worries regarding China's assertive behavior across the Indo-Pacific waters, South China Sea, and the Taiwan Strait. The joint statement from the summit, dubbed “The Spirit of Camp David,” introduced fresh frameworks and consultation mechanisms in the areas of finance, supply chains, and advanced technologies. The alignment among the three states concerning China and the Indo-Pacific is further emphasized through the introduction of annual meetings involving foreign ministers, defense ministers, commerce and industry ministers, and national security advisors, as well as the establishment of an annual Trilateral Indo-Pacific Dialogue.

The summit represents a positive stride towards simultaneous multilateral defense and supply chain cooperation; with a particular focus on semiconductors. Yet, the effectiveness of this collaboration in ensuring the three states' unrestricted access to high-end semiconductors can only be ascertained during moments of utmost criticality—specifically, when the geopolitically charged environment of overlapping tensions transitions into an armed conflict.

The undeniable presence of persistent geopolitical tensions involving Japan, South Korea, and Taiwan — all pivotal participants in the semiconductor supply chain — is a major concern, as the likelihood of a substantial disruption to the complete supply chain increases significantly if any of these crucial players were to face a real threat. Consequently, each of the three states strives to enhance self-reliance, minimize vulnerabilities, and de-risk their technology sectors in relation to China.

Taiwan’s semiconductor ecosystem, particularly for advanced chips, has proved very difficult to replicate, and its so-called ‘silicon shield’ looks set to remain strong at least for the medium term. Nonetheless, the notable high-end semiconductor industry manufacturing giants of Taiwan and Japan, namely TSMC and Samsung, have made commitments to invest in new fabrication facilities abroad. However, their emphasis on producing high-end chips, as mentioned earlier, is expected to continue being centered within their respective countries.

And China? The CCP will be closely observing if any fresh tech agreements emerge, providing insight into the extent to which each state is prepared to distance itself from the world’s second largest economy. Furthermore, the evolution of cooperation after the summit, particularly in defense and security, will be of outmost concern to Beijing.

In summary, this endeavor involves a delicate equilibrium, as the economies of the US, Japan, and South Korea are intricately intertwined with China's, where China is indeed the largest trading partner of the two latter. One would assume that none of these three wishes to excessively distance themselves from Beijing, given that more stringent measures targeting China, which are expected to emerge, could inadvertently set in motion an unforeseen downward spiral, potentially rendering the current volatile landscape unmanageable.