<![CDATA[K-pop stars and Huawei help South Korea win global 5G race, as Chinese trade trumps US fears]>
South Korea on Friday became the world's first country to roll out nationwide 5G networks, with one of its three telcos using Huawei technology, at a time when the United States has accused the embattled Chinese firm's technology of being used to spy for Beijing.
Unlike other US allies, Seoul has not restricted the firm from taking part in its next-generation networks, championed by President Moon Jae-in as a means to revive a flagging economy and drive innovation in areas ranging from smart cities to self-driving cars.
LG Uplus, the smallest of the country's three carriers, has opted to use Huawei base stations and transmitters for its 5G network, continuing its previous partnership and ensuring compatibility with its 4G network. SK and KT, South Korea's biggest and second-biggest carriers, respectively, have chosen Samsung Electronics, Ericsson and Nokia as their preferred suppliers of equipment, but have put those decisions down to cost and technical reasons, rather than security.
"The desire of Moon Jae-in, who is pursuing a pro-China policy, to continue exchanges with China, should be seen as a factor in the exchanges with Huawei despite the opposition of the US," said Kim Jong-ha, a security expert at Hannam University in Daejeon.
The US, Australia and New Zealand, members of the "Five Eyes" intelligence alliance, along with the UK and Canada, have either temporarily or permanently banned Huawei from their 5G networks over concerns about its links to Beijing. Other allied countries such as the UK and Germany have flagged the firm for special scrutiny.
Although South Korea hosts some 28,500 US troops as part of a security alliance with Washington forged after the Korean war, China is by far its biggest trading partner, receiving more than one-quarter of its exports.
"The recent memory of the THAAD controversy " where China opposed the instalment of the US-backed missile system and retaliated against South Korea by imposing a ban on K Pop and cosmetics " still lingers," Cho said. "Any spat with China has the potential to turn to economic retaliation that South Korea cannot afford."
South Korea has a 95 per cent rate of smartphone ownership, higher than that of any other developed economy. Photo: Bloomberg
In 2017, at the height of the THAAD controversy, the number of Chinese visitors to South Korea plunged 48 per cent to 4.16 million. During the first nine months of that year, the economy suffered related losses of US$6.8 billion, according to the National Assembly's Budget Office. While arrivals rose 12 per cent in the first 10 months of last year " after a recently-elected Moon embarked on a flurry of diplomacy aimed at thawing relations with Beijing " visitor numbers have yet to recover to their peak.
South Korea's 5G roll-out for the general public on Friday saw it beat Japan, the US and China in the global race to launch the wireless technology, which is up to 100 times faster than 4G and has the potential to revolutionise industries ranging from online gaming to health care and transport.
The launch came after the country's three mobile carriers on Wednesday began services early for some celebrity customers " including two members of K-pop group EXO and ice-skating star Kim Yu-na " to get the jump on US carrier Verizon's introduction of 5G to parts of Chicago and Minneapolis. SK described the celebrity customers as "the world's first 5G smartphone subscribers".
China is due to commercialise 5G services next year, with nationwide coverage seen as feasible by some analysts as soon as 2023.
Although the US has already brought 5G to some urban centres, national coverage is believed to be years away due to the extensive amount of infrastructure building required. Japan plans to begin some 5G services this year but is not expected to have widespread coverage until before the Tokyo Olympics next July.
South Korea has long prided itself at being at the forefront of technological innovation, boasting the world's fastest internet speeds. Its 95 per cent rate of smartphone ownership is higher than that of any other developed economy.
Economic growth, however, has been anaemic in recent years with an estimated GDP rise of 2.6 per cent for 2019 on track to be the lowest in six years.
"South Korea's economic growth in almost all areas it once dominated, from manufacturing to ship-making to steel, are all declining, largely due to China's rise," Cho said.
"IT has been the sole exception, so they are doubling down on IT, which includes infrastructure. In lots of ways, like China, South Korea wants to move away from dependence on manufacturing to services. They see the 5G network as a foundation for this."
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This article originally appeared on the South China Morning Post (SCMP).
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
