The world has been changed by COVID-19, which first broke out in Wuhan, China in December 2019. Now, the world is devising ways to put an end to the coronavirus and to overcome the Corona Shock. The global economy was hit the hardest from this Corona Shock. According to Nouriel Roubini, a professor at New York University, the current situation of the global economy is expected to be more severe than that of the Great Depression era.

The U.S., which plays a key role in the global society, is also going through a tough time and causing great confusion to the global economy. The U.S. is working on various policies to recover its domestic economy, but the large fiscal deficit and debt will not be easy to resolve. This has caused the U.S. to lose not only the public trust internally but also a global reputation externally.

The severe situation brought up the following question: Will the U.S. maintain its hegemonic power even in the post-Coronavirus era? Some argue that the U.S. has failed to fulfill its role as a hegemon and that its status as a leader will soon be taken over by China. This seems reasonable as there has been intensifying conflicts between the U.S. and China over hegemon even before the outbreak of the coronavirus. The dispute over the future hegemon has become even more serious regarding who owns the viral responsibility for the coronavirus pandemic. Will China, an emerging economic powerhouse, be able to take advantage of the U.S. economy’s slowdown and re-organize the world order? If so, what position should South Korea take amid such situation?

U.S.-China war

The competition between the U.S. and China has been going on for a long time. It stems from China's diplomatic policy under the agenda of the "China Dream" which is a counterpart of the “American dream”. A typical example of the China Dream is "One belt, One Road" which refers to a new Asia-Pacific order centering China in the middle of interchanges as it was in the modern era. Since the implementation of this policy, the U.S. has been keeping its eyes on the growth of China. Especially, the current U.S President Donald Trump has been insisting protectionism against China. In August 2017, Trump signed an executive order to investigate the controversial and unfair practices committed by China. This led to a competition between two countries: they started to impose tariffs and sanctions on each other’s goods and companies. Later such competition stretched out to the issue of China's ruling system when the U.S. Department of Defense released a report in June 2019 stating Taiwan as a country, breaking the "One China" principle. As a counter-attack, the Chinese Ministry of Education warned its students to be wary of studying in the U.S., while the Foreign Ministry restricted tourism in the U.S. Affected by such trade-war, the overall world economy has slowed down.

On June 30, 2019, both countries agreed to make trade negotiations. However, the trade war recurred in August 2019 when the U. S. announced it would impose a 10 percent tariff on Chinese products again. Eventually, on Oct. 11, 2019, the two countries drew a mini-deal, a partial agreement, in trade negotiations, and finally signed the first phase of the trade agreement in January 2020. However, many say that it was just the first phase of the agreement, and the second phase may not be as easy as it was in the first phase.

There are considerable concerns that a Trade war Ⅱ could take place after the coronavirus since various issues, such as the exclusion of Chinese companies from the U.S., are still underway. The two countries are also struggling with regard to some issues caused by a coronavirus. After the outbreak of the coronavirus, the U.S. has been claiming that China has the full responsibility for the current situation. The U.S government criticized that the whole world has been damaged by China's attempt to cover up the initial proliferation of the coronavirus. Mike Pompeo, U.S. Secretary of State, said at a press conference that the Chinese Communist Party did not inform the World Health Organization (WHO) of the coronavirus outbreak in time. As such, the U.S. announced to stop funding the WHO, accusing it of taking "China's side." However, China blames the U.S. for the coronavirus arguing that the U.S. army brought the virus to China in the first place.

The U.S. losing its leadership

Since the coronavirus outbreak, the U.S. has shown signs of crisis and division. First of all, a series of unprecedented measures have been put forward by the U.S. to cope with the economic disaster caused by the coronavirus. Zero-interest rate policies are expected to create numerous bankruptcies and defaults in the private sector. And Furthermore, re-shoring, which is strongly pushed by the government, is expected to make companies suffer a huge deficit. The U.S. growth rate for the second quarter is already in the -20 percent range and also expected to plunge in the second quarter. In addition, the nationwide social conflict triggered by George Floyd's death caused another chaos in the U.S.

Before the coronavirus broke out, the U.S. has emphasized that it is the one and only hegemonic power by calling itself the “police of the world”. However, the attitude the U.S. showed while dealing with the coronavirus crisis was just putting “America First”.

When the U.S. lost its credibility from other countries, the power of China emerged in the global world. China is making various appeals to the world to qualify as a leader. China highlights that it is the first country in the world to overcome the coronavirus. Since March, when the coronavirus began to calm down in China, Xi Jinping has been promoting the excellence of China's quarantine model to the world. Ministry of Foreign Affairs of the People's Republic of China held video conferences with more than 120 countries to advise them on measures to prevent the spread of infections and is also working on providing medical supplies such as respirators, masks, and protective clothing. These efforts made by China are seen as an attempt to take on the hegemon by turning the coronavirus victim countries into a "pro-China" country.

China's weaknesses

Nevertheless, China has yet to meet enough conditions to become a hegemonic country. First of all, a leading country should have some strong points that all countries in the world admire and want to follow. However, China's political and social system is still far from democratization and is being harshly criticized by the world. As China does not have a good acknowledgment in terms of freedom and other indicators of human rights, taking over the position of the hegemon from the U.S. is unlikely to be easy.

Besides the political aspect, China is still powerless than the U.S. Although China is growing rapidly in economic and military terms, the U.S. dollar and military strength are still overpowering. Among them, the GDP gap per population is particularly noticeable. Furthermore, China still falls short of the U.S. in infrastructure, education, and relations with neighboring countries.

David Shambaugh, a professor at George Washington University, said in his book "China Goes Global" that China is neither yet influential in international events nor does it have the capacity to directly impact the actions of other countries.

South Korea, caught between the G2

The hegemony struggle between the U.S. and China is expected to continue even in the post-coronavirus era. It is unclear which country can lead the world. South Korea is in a difficult position among them since it has military ties with the U.S. and economic ties with China. To make the problem worse, Trump professed to reorganize the existing global supply chain: exclude China and establish a new supply chain centered on the U.S. and its allies. If this becomes real, South Korea's position will become even more complex as South Korea can’t lose nearly 30 percent of its GDP in its trade with China.

Then, what attitude should South Korea take between the U.S. and China? Getting forced to choose one between the two countries would the most un-wanted scenario for South Korea. In particular, South Korea had suffered from China's retaliation over the THAAD system for choosing the U.S. side. For now, the most meaningful solution could be taking flexible actions between the two and developing Korea's own technology to stand by its power. Recently, the South Korean government's quarantine measures to the coronavirus has been praised by numerous countries. Likewise, South Korea should develop its soft power and technology-intensive industry like semiconductors to grow into a cultural powerhouse and a key trading partner.

Dealing with the Post-Coronavirus era

Due to the coronavirus, a race for self-sufficiency seems to have led the global society to lose the universal value of cooperation and co-prosperity. In this chaotic situation, in addition to a rivalry between a will-less America and a powerless China, such a race is driving the global community into the corner even more. If the U.S. wants to remain as the hegemonic power in the future, they must continue to provide global public goods as they have done so far. On the other hand, China needs political democratization before challenging the U.S for the hegemonic power. It is hasty to challenge the U.S. without its own public's support. What the U.S. and China both should keep in mind is that if they continue to stimulate each other, it will result in a zero-sum, as discussed in the prisoner's dilemma. Especially during a situation where the war against the virus is expected to continue, the value of cooperation is even greater.

The world order keeps on changing. The S. Korean government should make a wise choice in the world's flow. If it turns the crisis into an opportunity to gain an international reputation, it will be reborn as a promising country respected by the world.

Sung Jung-min, Hwang Yun-seon