South Korean authorities charged marine technology firm SI Innotec with violating trade laws for its work on Taiwan’s new military submarine program, citing the risk of Chinese economic retaliation, according to a police document and sources familiar with the matter. The South Korean police affidavit stated that the deal with Taiwan directly impacted the overall security of South Korea, and authorities were concerned about economic retaliation from China similar to the sanctions imposed after the THAAD missile system deployment in 2016. SI Innotec, along with two other South Korean companies, was charged with breaking trade laws, and one of their chief executives was accused of industrial espionage. The investigations into these companies have been influenced by political considerations related to the risk of an economic rupture with China, South Korea’s largest trading partner.
The affidavit revealed that many firms with submarine expertise avoided helping Taiwan due to the potential economic damage that could result, including a possible Chinese ban on South Korean exports. Seoul’s foreign ministry expressed its disapproval of the subcontractor KHNT’s work with Taiwan to the Defense Acquisition Program Administration (DAPA), which resulted in the disapproval of the deal by the ministry. This article highlights the impact of geopolitical tensions on South Korea’s investigations into these companies and the cautious stance taken to avoid provoking China. Both SI Innotec and Park Mal-sik, the executive director of SI Innotec, deny any wrongdoing and have appealed the charges.
The article emphasizes the larger context of rising military tensions between China and Taiwan. Taiwan’s new homegrown submarines are seen as a strategic deterrent to China’s naval power projection in the Pacific. The expanded Taiwanese submarine fleet could complicate a potential invasion by Beijing, but U.S. officials caution that Taiwan should also focus on smaller weapons for asymmetrical warfare. South Korean expertise, including that of retired naval officers, has been involved in Taiwan’s submarine program. These officers, who worked for SI Innotec and KHNT, did not seek permission before working overseas. SI Innotec was accused of violating the Foreign Trade Act, while KHNT is alleged to have illicitly transferred a submarine component to Taiwan.
Overall, this article sheds light on the complicated dynamic between South Korea, China, and Taiwan regarding military cooperation and trade relations. The fear of economic retaliation from China has influenced South Korean authorities’ investigations into companies involved in Taiwan’s submarine program. The article highlights the careful balancing act South Korea must execute to avoid damaging its relationship with China while supporting its neighbor Taiwan.
