As artificial intelligence (AI) is shaping the global economy and society as a general-purpose technology, concerns are growing that disparities in countries’ capacity to adopt AI may further widen. While AI holds significant potential to enhance productivity, foster economic growth, and expand trade, its benefits could be increasingly concentrated in a limited number of leading countries and firms due to the unequal distribution of technology, capital, talent, and data. In particular, many developing countries face structural constraints in adopting AI as a result of insufficient digital infrastructure, limited human capital, and underdeveloped institutional frameworks. Over the medium to long term, these constraints risk exacerbating global growth gaps and socioeconomic inequality.

Against this backdrop, this study focuses on countries’ AI adoption capacity and analyzes disparities in AI readiness across income levels, with the aim of identifying cooperation strategies tailored to the characteristics of different country groups. It also examines the agendas, policies, and initiatives introduced by leading countries−such as the United States, China, the European Union, Japan, and Singapore−as well as by multilateral cooperation frameworks to support capacity building for AI in developing countries. Through this analysis, the study closely reviews international trends and derives policy implications for Korea’s role in this evolving landscape.

To explore customized cooperation strategies by country group, Chapter 2 employs the IMF’s AI Preparedness Index (AIPI) to assess national AI adoption capacity and analyzes the relationship between AI readiness and SDGs achievement indicators by income group. Significant disparities in AI preparedness exist across countries. Most low-income countries face urgent needs in infrastructure development and basic human capital formation. By contrast, developing countries that have achieved a certain level of infrastructure and human capital have reached a level where technology and innovation cooperation is feasible, and they have also made considerable progress in regulatory frameworks. These cross-country gaps are closely linked to differences in both the level and quality of progress toward the Sustainable Development Goals (SDGs), underscoring the need for differentiated cooperation strategies tailored to country-specific conditions.

Chapter 3 examines the policies and programs of major AI-leading countries−including the United States, China, the European Union, Japan, and Singapore−toward developing countries, analyzing government-led initiatives, public-private partnerships, and multilateral cooperation efforts. International cooperation in AI by leading countries reflects a combination of market-expansion objectives and broader goals related to geopolitical and economic stability. In the context of strategic competition between the United States and China, the role of countries that share similar positions with Korea has become increasingly important. Under these circumstances, it is desirable for Korea to support the adoption of AI based on shared values within the international community and to promote economic cooperation that facilitates its diffusion.

Chapter 4 reviews discussions on AI-related cooperation and initiatives for developing countries within major multilateral frameworks, including the G7, G20, OECD, United Nations, ITU, multilateral development banks (MDBs), and the WTO. These institutions recognize limited data access, inadequate digital infrastructure, and shortages of skilled human resources in developing countries as core challenges. At the same time, they are strengthening efforts to link development cooperation with AI ethics, safety, and standards. Such multilateral efforts complement bilateral cooperation while serving as critical platforms for coordination and the formation of global AI governance.

Based on the foregoing analysis, Chapter 5 presents Korea’s AI cooperation policy as follows. First, cooperation should be customized based on country-specific gaps, with the content and form of cooperation differentiated according to income levels and AI readiness. Second, cooperation should focus on priority areas in which Korea has comparative strengths. Korea should prioritize its areas of strength and develop cooperation projects aligned with the partner country’s level of development, while projects should be designed to contribute simultaneously to partner countries’ SDG achievement. At the same time, cooperation grounded in shared values−such as AI safety, data security, and personal data protection−should be pursued. Third, both bilateral and multilateral cooperation frameworks should be considered in parallel. While AI diffusion serves bilateral interests, it also requires participation in and contributions to multilateral frameworks, given considerations of objectives and scale. Accordingly, Korea’s active role in multilateral cooperation mechanisms is essential, and collaboration with like-minded partners will be particularly important in3 this process.

Over the past two decades, China has systematically promoted the semiconductor industry as a central pillar of its national development strategy. In recent years, this effort has intensified as technological self-reliance and supply-chain security have been elevated to core national priorities. Against the backdrop of escalating U.S. export controls and heightened geopolitical tensions, China has accelerated investments in advanced semiconductor technologies while seeking to reduce structural dependence on foreign suppliers.

China’s semiconductor development strategy can be characterized by three interrelated features. First, it is underpinned by strong state-led industrial policies. Through major strategic frameworks such as Made in China 2025 and the Guidelines for the Development of the National Integrated Circuit Industry, semiconductors have been designated as a strategic core industry. These initiatives have been supported by extensive policy instruments, including large-scale fiscal support, tax incentives, and systematic talent development and recruitment programs. Second, China has pursued the localization of critical technologies with the explicit objective of achieving technological self-sufficiency. Particular emphasis has been placed on increasing domestic production capacity in semiconductor equipment and materials, where reliance on foreign technologies has historically been most pronounced. Third, from a medium- to long-term perspective, China has sought to establish China-centered industrial clusters amid the ongoing reconfiguration of global semiconductor supply chains, thereby fostering a domestically anchored semiconductor ecosystem.

Despite these sustained policy efforts, China’s semiconductor industry remains heavily dependent on foreign technologies in several critical process stages. This dependency is especially evident in extreme ultraviolet (EUV) lithography equipment, advanced electronic design automation (EDA) tools, cutting-edge manufacturing equipment, and specialized materials. These structural vulnerabilities have become primary targets of U.S.-led export control measures. In particular, the strengthened restrictions implemented since October 2022 have imposed material constraints on China’s ability to produce advanced semiconductors. Empirical evidence indicates that China’s semiconductor imports from the United States declined by approximately 31 percent following the implementation of these measures—a contraction more than three times larger than that observed for non-sanctioned items.

The main policy effects identified through Event Study and Difference-in-Differences (DID) analyses can be summarized as follows. First, U.S. export controls have functioned not as a temporary shock but as a persistent structural constraint, with their impact concentrated on key process inputs such as high-performance chips, high-purity materials, and advanced manufacturing equipment. Second, although import substitution through alternative sourcing channels initially mitigated some of the supply disruptions, these channels have become increasingly constrained over time. Third, the coordinated export controls imposed by the United States and its allied countries have exerted sustained pressure on China’s capacity to secure alternative supply sources, further tightening supply-chain bottlenecks.

Importantly, the policy effects have exhibited a dynamic temporal pattern rather than a one-off disruption. Semiconductor imports fell sharply in 2022, showed partial adjustment in 2023, and declined again in 2024, suggesting that export controls have generated cumulative and reinforcing constraints rather than transitory effects. This pattern underscores the structural nature of the restrictions and highlights the growing difficulty China faces in sustaining advanced semiconductor production under an increasingly restrictive external environment.

From an academic perspective, this analysis contributes to the existing literature by providing quantitative evidence for policy effects that have often been discussed primarily in qualitative terms. By empirically tracing both the magnitude and temporal evolution of import reductions, the study offers a more rigorous assessment of how export controls reshape semiconductor supply chains over time.

Several policy implications emerge from these findings. Korea faces both risks and opportunities as China advances its semiconductor self-reliance strategy amid global supply-chain reconfiguration. In the short term, Korea may benefit from opportunities to supply advanced equipment and materials to China, partially filling technology gaps created by U.S. export restrictions. In the longer term, however, Korea must simultaneously safeguard its proprietary technologies and strengthen supply-chain resilience. This calls for a dual strategy that combines the strategic utilization of production bases in China with reinforced domestic capabilities aimed at sustaining technological leadership.

In conclusion, China’s semiconductor industry is undergoing rapid transformation under the combined pressures of external constraints and internal strategic realignment. As competition and selective cooperation among major economies reshape the global semiconductor landscape, Korea stands at a critical strategic juncture. Carefully calibrated and balanced policy responses will be essential to maximize emerging opportunities while effectively managing long-term risks. This study provides an empirically grounded framework to inform such strategic decision-making, offering deeper insights into the evolving structure of global semiconductor competition than those available in previous research.

Brazil, Latin America’s largest economy, maintains high tariff and non-tariff barriers but has shifted toward open trade policies since President Lula’s 2023 inauguration. While the Trump administration’s trade disruptions accelerated this shift, Brazil’s diversification reflects deeper structural imperatives driven by three core motivations:

First, reducing trade concentration with specific partners to mitigate risks amid rising global protectionism. Second, overcoming premature deindustrialization through industrial cooperation. Brazil deindustrialized at income levels far below advanced economies, prompting Lula’s New Industrial Policy (NIB) to revitalize manufacturing. Trade agreements serve as institutional frameworks for technology transfer, investment attraction, and supply chain integration beyond market access. Third, expanding multilateral trade to secure strategic autonomy, reducing dependence on major powers while strengthening Brazil’s negotiating position within the U.S.-China bipolar structure.

Following these priorities, Brazil concluded agreements with the EU (December 2024) and signed FTA with EFTA (September 2025). Also Brazil conduct various industrial cooperation with European countries. Analysis of these trade agreements and industrial cooperation reveals key characteristics:

Brazil adopted sector-differentiated opening strategies, protecting strategic industries while liberalizing manufacturing to enhance competitiveness. Brazil secured policy autonomy for industrial tools including export tax authority, exclusion of the public health system (SUS) from procurement commitments, restricted bidding for innovation projects, and offset requirements. Services and investment followed positive-list approaches—fully opening manufacturing-related sectors while minimally opening strategic areas and preserving space for domestic preferences. The agreements introduced environmental norms linking trade to sustainability to promote cooperation in sustainable development. However, European agricultural protections through geographical indications and tariff-rate quotas may limit Brazil’s market opening benefits. In industrial cooperation, Brazil seeks to encompass technology transfer, joint development, local production, and workforce training beyond simple product supply.

Implications for Korea-Brazil relations include: Korea’s value as a diversification partner given Brazil’s high concentration with China and the EU; urgency to resume stalled TA negotiations during pro- diversification administrations like Lula’s; cooperation opportunities in NIB priority sectors, particularly critical minerals (Brazil holds all 10 Korean strategic minerals and ranks second globally in rare earths); balancing Brazil’s policy autonomy with opportunities for Korean companies rather than demanding unconditional liberalization; establishing long-term government cooperation platforms beyond past episodic efforts; and activating private sector cooperation through industry associations given the TA’s likely lengthy timeline.

Amid the intensifying U.S.–China semiconductor conflict and the Russia–Ukraine war, the vulnerabilities of global value chains (GVCs) have deepened, elevating technology from a mere industrial asset to a strategic lever shaping national trade, diplomacy, security, and politics. The United States has pursued an innovation-based economic security strategy that integrates R&D, supply chains, and emerging industries through the CHIPS and Science Act and the IRA, while Europe has responded by advancing the concept of technology sovereignty. Technology sovereignty emphasizes a nation’s ability to independently develop and procure critical technologies essential for national prosperity and competitiveness, thereby mitigating unilateral dependencies.

Against this backdrop, escalating U.S.–China technological rivalry has driven countries to pursue Sovereign AI strategies aimed at designing data, computing, models, cloud, and regulatory ecosystems in ways that are controllable within their own borders. Sovereign AI can be defined by applying the four pillars of technology sovereignty to the AI domain: (1) identification of strategic technologies, (2) dependency management, (3) governance design, and (4) social and democratic context.

The Korean government has also positioned Sovereign AI as a national strategic priority and is implementing aggressive promotion policies, including a 100-trillion won investment, the establishment of a National AI Computing Center, expansion of GPUs and data centers, designation of AI special zones, development of domestic foundation models, and strengthened cooperation with NVIDIA. However, Korea faces structural limitations compared to the United States and China in terms of financial resources, talent pool, domestic market size, technological breadth, and global influence. Additionally, concerns have been raised regarding the constraints of a government-centric approach, fragility of private-sector consortiums due to competition among major corporations, and excessive expectations placed on Korea’s strengths in memory semiconductors and telecommunications infrastructure.

This study aims to redefine the concept, boundaries, and stratified levels of the Korean model of Sovereign AI from the perspective of technology sovereignty and to present Korea’s strategic positioning and policy roadmap through comparative analysis of major countries. To this end, the study reconstructs Sovereign AI typologies (Full-stack, Hybrid, and Leverage-oriented) by applying the core elements of technology sovereignty to the AI domain, and analyzes the AI, semiconductor, and digital strategies of the United States, China, Japan, France, and others to identify policy elements that Korea should emulate or avoid. The analysis further identifies domains that Korea can realistically secure based on its resources, talent, market characteristics, industrial structure, and technological capacity, and proposes actionable policy directions including public-private-international cooperation strategies.

The research methodology integrates literature and policy document analysis, focus group interviews (FGIs), and interviews with international experts. The literature review examined AI, semiconductor, and digital strategies as well as technology sovereignty and economic security policy materials of major countries, while key indicators such as the Stanford AI Index were used to compare AI capabilities and policy outcomes quantitatively. FGIs were conducted with experts in AI, technology management, industrial policy, and public policy to identify policy gaps, institutional bottlenecks, and on-site needs related to Sovereign AI. Interviews with overseas experts provided insights into the objectives, policy design principles, and distinguishing features of each country’s Sovereign AI strategy, as well as elements that may be applicable to Korea’s policy environment.

The analysis shows that major countries commonly regard AI as a ‘core strategic infrastructure and a pillar of technology sovereignty.’ AI is conceptualized not as a standalone ICT technology but as an integrated national strategic infrastructure that combines data centers, GPUs, cloud computing, networks, data, and human capital, supported by long-term investment and regulatory development. Consequently, data sovereignty, computing capacity, public-private collaboration, AI safety and ethics governance, and international standards competition have emerged as universal strategic pillars of Sovereign AI policies.

Despite these commonalities, each country configures these elements differently according to its technological, industrial and geopolitical conditions. The United States aims to maintain overwhelming technological superiority by reinforcing a private -sector-driven AI ecosystem, whereas China seeks full-stack autonomy—from chips to frameworks to operating systems—to eliminate U.S. dependence. The United Kingdom focuses on maximizing access to the U.S.-led ecosystem and enhancing regulatory and normative influence, while Japan pursues a leverage-oriented strategy by embedding itself deeply in the global ecosystem.

A comparative interpretation suggests that Korea, while possessing world-leading competitiveness in telecommunications and memory semiconductors, faces structural constraints in GPUs, data, and upstream-downstream industrial linkages, and the overall level of AI utilization across the public and industrial sectors remains limited. Therefore, rather than pursuing a full-stack Sovereign AI model in the short term, Korea’s most realistic pathway involves initially operationalizing a ‘leverage-oriented Sovereign AI’ strategy—using existing technological strengths as a bargaining asset to increase global ecosystem participation and negotiating power—followed by a gradual transition to a ‘hybrid Sovereign AI’ model through targeted capability reinforcement.

To realize a hybrid Sovereign AI framework, it is critical to recognize that AI-driven economic value is ultimately generated in the application and service layers. Accordingly, activating an AI application ecosystem is imperative. Korea must reform its policy environment so that companies developing AI services and solutions applicable across diverse industries—not only manufacturing—can grow and scale. By moving beyond the ‘basic self-reliance’ phase centered on AI models and computing infrastructure and expanding AI utilization across industrial and economic activities, Korea can systematically transition toward a sustainable hybrid model of Sovereign AI.

Brazil has become one of the most attractive partners, especially in light of recent changes in the global environment. Rising uncertainty and instability call for the need to diversify trading partners. As of 2024, Brazil’s GDP has reached 2.2 trillion US dollars. Brazil ranks as the world’s seventh-largest economy, following the United States, China, the European Union, Japan, India, and the United Kingdom. Despite its significance, however, relatively little research has been conducted in Korea to investigate and understand the Brazilian economy. This report aims to analyze Brazil’s consumer market through the lens of the informal economy in particular. The informal economy refers to economic activities that would be included in GDP if monitored by the government but are not officially documented due to institutional or regulatory contexts. The size of Brazil’s informal economy is so large that understanding it is essential to understanding the Brazilian economy in depth. More specifically, the informal economy share in Brazil amounts to 33.4% of GDP. This figure is significantly high for a country with a decent level of GDP per capita compared to other Latin American countries.

This report exclusively investigates three features of the Brazilian economy, all of which are closely related to the informal economy. First, the low-income and low-wealth groups experience severe and the poverty rate is high. Both income and wealth mobility are low. Inequality is pronounced not only in a static sense but also in a dynamic sense. Second, access to financial intermediaries is limited for both low-income (low-wealth) households and small and medium-sized enterprises (SMEs). As of 2025, the Selic rate is 15%. Borrowing rates for households and SMEs are particularly high, as household borrowing rates typically exceed 50% annually. Although fintech has recently made access more feasible, demand for cash transactions still remains high. Lastly, informal labor contracts are prevalent. Approximately 37.9% of total employment is informal.

Furthermore, Brazil is well known for its inequality and polarization. Although the income Gini coefficient has declined over the last 30 years, it remains high, exceeding 50. The top 10% income share in Brazil is 39.1%, which is higher than the Latin American average of 34.2%. Meanwhile, the bottom 10%’s income share is 1.4%, which is relatively lower than the Latin American average of 1.7%. Brazil also demonstrates a high degree of urban concentration, contributing to heightened regional inequality.

Using a simplified macroeconomic model, this report provides a theoretical foundation for the underlying mechanisms through which the informal economy exacerbates the above-mentioned features. Limited access to financial intermediaries and the prevalence of informal labor worsen inequality and generate a poverty trap. Low returns on assets for wealth-poor households raise their marginal propensity to consume, leading to low savings. As the informal economy grows, capital accumulated in the formal sector shrinks and the rate of return rises. Wealthy households benefit from the high returns, and polarization widens on the right tail of the wealth distribution. The model quantitatively evaluates the potential gains that the Brazilian government could achieve through implementing policies aimed at improving financial accessibility.

This report examines Brazilian policies that partially mitigate the informal economy. Of course, few policies are designed to directly target the informal economy. However, the Brazilian government has implemented numerous policies to support low-income and low-wealth households, improve financial accessibility nationwide, secure tax revenues through formalization, and increase aggregate productivity through worker education. All of these policies are closely related to the informal economy.

Next, the report analyzes consumption patterns among Brazilian domestic consumers. Due to Brazil’s high level of income inequality, it is common practice to classify households into five groups—A, B, C, D, and E. With Group A representing the highest-income class and Groups D and E representing the lowest-income classes, these polarized consumers tend to exhibit distinct consumption patterns. The report also presents case studies of marketing strategies targeting low-income and low-wealth households as well as top income earners. In general, expanding the consumer base and improving financial inclusion play key roles in low-income markets. Regardless of income level, consumers rely heavily on the established images of companies.

Finally, we suggest several broad policy implications based on the observations discussed above. Due to the Brazilian government’s multifaceted policy efforts related to the informal economy, there is substantial potential for public-sector cooperation between Korea and Brazil. Brazil has recently established the Ministry of Entrepreneurship, Microenterprise, and Small Business (MEMP), signaling a strong policy commitment to supporting SMEs. In this context, cooperation through Korea’s Ministry of SMEs and Startups and the Knowledge Sharing Program (KSP) appears promising. Bilateral programs could also be pursued within the framework of the Global Alliance Against Hunger and Poverty, which was launched under Brazil’s leadership. Moreover, due to the polarized nature of Brazil’s domestic consumer market, Korean firms could benefit from entering the Brazilian market through strategies such as product differentiation and image-based marketing.

Although Northeast Asia functions as a core axis of the global economy, it faces a structural dilemma where economic cooperation is restricted due to political and security tensions between regional states. This study focuses on the cruise industry as a strategic alternative to break through this rigid environment. Due to its nature as a tourism sector, the cruise industry carries a relatively low political burden. However, it generates significant economic ripple effects across both upstream and downstream industries, ranging from port infrastructure development to the advancement of service sectors. Consequently, the industry can serve as a strategic medium for strengthening economic cooperation between nations.

The primary objective of this study is to establish a multilateral cooperation model for Northeast Asia by leveraging the cruise industry and to evaluate its practical feasibility. To do this, cruise trends in global and Northeast Asian markets and policy environments were analyzed, alongside a review of North Korea’s tourism strategies and relevant cases. Furthermore, by analyzing the limitations of existing shipping routes and regional consultative bodies, improvement tasks were derived. Ultimately, by establishing South Korea as a core hub and mediator of the Northeast Asian cruise network, this study proposes a phased policy roadmap to entice North Korea into a multilateral cooperation framework and achieve the advancement of the regional cruise industry.

Unlike previous studies that approached individual topics such as market analysis, national policy comparisons, or inter-Korean tourism in a fragmented manner, this study integrates these to analyze a comprehensive cooperation system connecting the ‘Global-Northeast Asia-North Korea-Multilateral’ levels. In particular, this study offers policy implications that differ from existing research by specifying phased scenarios for connecting North Korean ports of call, while accounting for realistic constraints such as sanctions. Furthermore, it proposes the formation of a working group as a multilateral governance mechanism to support the implementation of these scenarios.

The main contents of each chapter are as follows. Chapter 2 provides an analysis of cruise industry trends and the policy responses of Northeast Asian countries. The global cruise market recorded 34.6 million tourists in 2024, surpassing pre-pandemic levels, but Northeast Asian countries are showing differing policy stances in response. South Korea is moving away from past quantitative growth-oriented approaches and is pursuing the “2nd Basic Plan for Cruise Industry Promotion (2023-2027)” with the goal of a “qualitative transition.” With a vision of “Cruise in Daily Life,” it is focusing on industrial recovery and structural improvement by expanding the domestic demand base, supporting the launch of national cruise lines, and expanding the “Fly & Cruise” model linking air and sea travel. Japan aims to recover to 2.5 million inbound cruise tourists by 2025, significantly strengthening port receptivity and seeking to improve infrastructure and standardize CIQ (Customs, Immigration, and Quarantine) procedures. China aims to transition into a “Cruise Manufacturing Powerhouse,” succeeding in building its own large-scale cruise ships and implementing aggressive market expansion strategies, such as the full implementation of a 15-day visa-free entry policy for foreign tour groups. Russia has established its own development strategy for cruise tourism in response to Western sanctions and is attempting to reorganize its industry around domestic markets and friendly nations. It is concentrating its policy capabilities on modernizing old infrastructure and developing new routes along the Far East and Black Sea coasts.

Meanwhile, existing consultative bodies such as the Greater Tumen Initiative (GTI) and Asia Cruise Cooperation (ACC) are facing difficulties in leading substantial policy coordination due to structural incompleteness— failing to encompass all major regional stakeholders—and a lack of legal binding force. Therefore, the creation of a new dedicated body to supplement these is required.

Chapter 3 reviews North Korea’s tourism development strategy and cruise tourism cases. Under the Kim Jong-un regime, North Korea maintains a stance of “Managed Openness,” utilizing tourism as a means of securing foreign currency and promoting the regime. The recently enacted “Tourism Law” (2023) and “Wonsan-Kalma Coastal Tourism Special Zone Law” (2025) provide institutional support for this strategy. Analysis of past cases, such as the Mt. Kumgang cruises (1998–2004) and the Rason-Mt. Kumgang pilot operation, confirmed that while rich tourism resources and the special zone system are positive factors, vulnerabilities such as lack of infrastructure (port depth, terminals), unfavorable profit structures, and safety issues still persist. This suggests that future cooperation should be designed to compensate for these structural constraints.

Chapter 4 specifies plans for expanding Northeast Asian multilateral cooperation. The core is the construction of a “Multi-nodal Loop Route” that connects four to five countries, going beyond simple bilateral round trips. In the West Sea region, a short-distance circulation model connecting Incheon-Nampo-China (Dalian/Dandong) was proposed, and in the East Sea region, a northern logistics-tourism complex route connecting Sokcho/Busan-North Korea (Wonsan/Rason)-Russia (Vladivostok)-Japan (Sakaiminato) was suggested. In doing so, the operation of small and medium-sized cruise ships and the application of the “Fly & Cruise” model are essential, considering sanctions against North Korea and the shallow water depth (8–11m) of North Korean ports.

Furthermore, to provide an incentive for North Korea’s participation, the study presented an alternative of guaranteeing indirect foreign currency income—within a range that does not violate sanctions—by charging a “Port Stay Fee” on a per-ship or per-passenger basis upon entry. As a governance mechanism to implement this, the establishment of a “Northeast Asia Cruise Cooperation Working Group” under the GTI Tourism Committee, involving member countries such as Korea, China, Russia, and Mongolia, as well as Japan and North Korea, was proposed.

Northeast Asian cruise cooperation should be promoted in stages, considering the sanction environment and infrastructure gaps. The short term is a period for laying the foundation for cooperation, activating the “Northeast Asia Cruise Cooperation Working Group” to share port and navigation information and initiating discussions on standardizing CIQ procedures to solidify the basis for cooperation. The medium term is a period for the expansion of cooperation, pursuing the conditional connection of North Korean ports of call only when safety and compliance with sanctions have been verified. The long term is the stage where the cruise network is completed, establishing a multi-nodal maritime tourism belt connecting five Northeast Asian countries (South Korea, North Korea, China, Japan, and Russia) on the premise of sanction relief and normalization of relations, and maximizing network efficiency by diversifying the functions of each country’s ports. South Korea should utilize its geopolitical advantages to play a leading role as a physical hub of the Northeast Asian cruise network and as a mediator that draws North Korea into the arena of multilateral cooperation.

This study is significant in that it designs a practical multilateral cooperation model mediated by the cruise industry, which possesses low political sensitivity and significant economic ripple effects. Amid ongoing geopolitical tensions in Northeast Asia, it presents a policy path for incorporating North Korea into the regional economic cooperation framework through South Korea’s role as a mediator. However, the phased cooperation scenarios derived in this study depend on the cooperative will of each country and volatile external variables such as the easing of sanctions against North Korea and improvement of inter-Korean relations, thus entailing realistic limitations in determining the timing and speed of actual policy execution. Therefore, future research should reflect scenarios of rapidly changing Northeast Asian situations, involve economic feasibility analysis by route, and carry out specific follow-up studies on legal and institutional detailed designs and financing plans to ensure the stable operation of the proposed multilateral consultative body.

Executive Summary

Contributors

Chapter 1. Introduction
1. Background
2. Objective

Chapter 2. The Historical Evolution, Achievements, and Collaborative Dynamics of GTI
1. Overview of GTI: Historical Background and Evolution
2. Achievements and Limitations
3. Looking Ahead: Balancing Achievements and Challenges

Chapter 3. Rationale for Legal Transition
1. Previous Discussions on Legal Transition
2. Environmental Analysis

Chapter 4. Comprehensive Frameworks and Strategic Suggestions for Legal Transition
1. Comparative Analysis of Regional Cooperation Models and Implications
2. Strategic Plan for Legal Transition

Chapter 5. Perspectives and Evaluations of Member Countries
1. China
2. Mongolia
3. South Korea
4. Russia

Chapter 6. Conclusion
1. Summary of Findings
2. Policy Implications
3. Strategic Directions for GTI’s Institutional Transformation

References

This study examines the current status of the Greater Tumen Initiative (GTI) by reviewing its establishment background and historical evolution, major activities and achievements, and the development of internal discussions on its transition into an international organization. It assesses the necessity and feasibility of GTI’s legal transformation. Over the past three decades, GTI has played a meaningful role as a platform for dialogue and cooperation in Northeast Asia; however, the absence of an independent international legal personality has imposed structural constraints on project implementation and resource mobilization. To overcome these limitations, GTI member states have formed a broad consensus in principle on the need for legal transformation, and past discussions have already laid a substantial institutional and legal foundation for such a transition. Drawing on comparative analyses of regional development and cooperation frameworks similar to GTI−such as APEC, ACMECS, CAN/CAF, and ADB−this study derives policy implications and proposes a concrete, step-by-step legal, institutional, and policy roadmap for GTI’s transition into an international organization. In particular, through joint research with participating institutions of the GTI Research Institute Network, the study synthesizes member states’ positions and perspectives on the legal transition, and explores cooperative approaches to overcoming differences and building consensus. In this respect, the study makes a significant contribution to advancing practical pathways toward GTI’s institutional transformation.

Amid intensifying U.S.-China strategic competition, the expansion of economic security legislation, and persistent geopolitical risks, global supply chains are being reorganized beyond the traditional logic of cost efficiency toward secure procurement, resilience, and technological and industrial security. Supply chains are no longer merely networks of production and trade; they have become strategic arenas in which technology, standards, data, industrial policy, and external economic policy intersect. In this context, China has emerged as a central variable in global supply chain restructuring, as it combines a large domestic market and manufacturing base with state-led industrial strategies and external initiatives such as the Belt and Road Initiative, the Digital Silk Road, and the Green Silk Road.

This study examines China’s supply chain influence in the fields of the green transition, the digital transition, and biopharmaceuticals. Rather than assessing China’s influence through a single indicator or aggregate trade volume, it analyzes how China’s policy direction and industrial capacity are reflected in actual trade structures, product- level competitiveness, value chain positions, and major economies’ dependence on China. To this end, the study constructs product groups at the HS six-digit level by combining international product classifications with the U.S. critical supply chain framework under Executive Order 14017. It then uses UN Comtrade data to examine export and import values, world market shares, export destinations, import dependence on China, revealed comparative advantage (RCA), and the trade specialization index (TSI).

Chapter 2 analyzes China’s influence in green transition supply chains. China has anchored its green transition strategy to the goals of carbon peaking by 2030 and carbon neutrality by 2060, while strengthening its industrial base in renewable energy, electric vehicles, and batteries. In 2024, China’s newly installed renewable energy capacity reached 373 GW, and its cumulative installed capacity reached 1,889 GW, accounting for about 56 percent of China’s total power capacity and roughly 64 percent of global newly installed renewable energy capacity. Trade analysis shows that China’s influence is selectively concentrated in midstream and downstream manufacturing product groups such as batteries and storage devices, clean mobility, and renewable energy equipment. By contrast, its role in critical minerals is better understood as that of a processing and manufacturing hub that imports and refines minerals for use in batteries, electric vehicles, and renewable energy equipment, rather than as a dominant upstream mining country.

Chapter 3 examines China’s digital transition policies and its position in ICT supply chains. China has strengthened its digital economy through data governance reforms, the establishment of the National Data Administration, the expansion of digital infrastructure, the development of an integrated data market, and state-led projects such as the “East Data, West Computing” initiative. The trade analysis indicates that China’s ICT supply chain influence is concentrated not in raw materials but in midstream and downstream manufacturing and equipment. China maintains a strong export hub position in finished ICT goods such as computers, communication equipment, and consumer electronics, while its competitiveness in electronic components and semiconductor-related products is gradually improving. However, the TSI for electronic components, including semiconductors, remains negative, indicating that China still maintains a net import structure in these areas. China’s digital supply chain influence therefore has a dual character: strong competitiveness in finished goods and equipment, combined with continued catching up in components and semiconductors.

Chapter 4 analyzes China’s biopharmaceutical strategy and its influence in biopharmaceutical supply chains. China has pursued manufacturing self-reliance, innovation capacity, and global cooperation through the Bioeconomy Development Plan, pharmaceutical regulatory reforms, support for innovative drugs, and greater opening in biopharmaceuticals. The analysis shows that China’s influence is stronger in upstream raw materials and intermediate goods than in finished pharmaceutical products. Major economies’ dependence on China for finished products generally remains in the single digits, while dependence on China for APIs, bulk drugs, and biopharmaceutical- related intermediate goods is considerably higher — reaching 20 to 30 percent for APIs and bulk drugs in Korea, ASEAN, and Latin America, and 50 percent or above for related intermediate goods in several major economies. At the same time, China is becoming an increasingly important supplier of innovation pipelines, as the value of license-out deals by Chinese pharmaceutical firms exceeded USD 5 billion in 2024 and approached USD 6.6 billion in the first half of 2025.

Chapter 5 synthesizes the findings and argues that China’s supply chain influence is not comprehensive or uniform, but selective and concentrated in specific sectors and stages of the value chain. In the green transition, China functions as a critical minerals processing hub and a midstream and downstream manufacturing hub for batteries, electric vehicles, and renewable energy equipment. In the digital transition, China remains a major export hub for finished ICT goods and equipment while continuing to catch up in components and semiconductors. In biopharmaceuticals, China’s structural influence is stronger in APIs, bulk drugs, and related intermediate goods than in finished products. Global supply chain restructuring is therefore more likely to proceed through product- and stage-specific risk management, supplier diversification, minimum domestic or regional production capacity, strategic stockpiling, and China-plus-N diversification strategies, rather than through comprehensive decoupling from China- centered supply chains.

For Korea, these findings suggest the need for differentiated strategies by sector and value chain stage. In the green transition, Korea should strengthen supply chain monitoring, diversify procurement of key materials and components, and expand cooperation in mineral procurement, refining, and material processing. In the digital transition, Korea needs to manage geopolitical risks in sensitive areas such as semiconductors, AI, and data infrastructure, while selectively identifying areas for cooperation, including green digital infrastructure, digital ODA, and joint entry into third-country markets. In biopharmaceuticals, Korea should address upstream bottlenecks by diversifying sources of APIs, intermediates, and related intermediate goods, while strengthening regulatory and quality capabilities. With the inclusion of biosecurity-related provisions in the U.S. FY2026 National Defense Authorization Act (NDAA), Korea should also approach biopharmaceutical supply chain policy as a strategic domain that integrates economic security, regulatory response, market access, industrial competitiveness, and supply chain resilience.

This study attempted an in-depth analysis of the changing world order under Trump’s second term and Russia’s strategy for a multipolar world. In particular, the research focused on the Shanghai Cooperation Organization (SCO), which has recently emerged as a leading multilateral organization in Eurasia. In other words, the study examines Russia’s strategy for utilizing the SCO as a key policy instrument to advance its global strategy for a multipolar world under Putin’s fifth term, adopting a multifaceted analytical perspective. Chapter 2 provides an in-depth examination of the changing world order under Trump’s second term and the international relations of major powers. To this end, the study examined the key aspects and characteristics of these changes, as well as the structure and nature of major power relations among the United States, China, and Russia. At the same time, it examined how the improvement and development of China-Russia relations were specifically realized through the SCO.

The international order is currently undergoing a major transformation. This transformation was essentially triggered by the inauguration of Trump’s second term and the shift in the United States’ foreign policy. In particular, the diplomatic and security, economic and trade environments are rapidly changing at global level. Above all, due to the Trump administration’s pursuit of an “America First” foreign policy, the world is now facing a completely unfamiliar new world order. In the familiar world of post-Cold War “globalization,” the United States, as a global leader, has played a leading role in protecting human rights and liberal democratic values, opening markets, countering aggressive authoritarian forces, and ensuring global security.

Amidst the new structure and dynamics of the US-China-Russia trilateral relationship, including the ongoing and intensifying US-China hegemonic competition, the possibility of resuming US-Russia dialogue and normalizing bilateral relations, and the strengthening of strategic ties between China and Russia, this study provides a more objective and comprehensive understanding of Russia’s vision and implementation of a multipolar world order, including its pursuit of strategic relationships with the Global South, BRICS, and the US and China.

Chapter 3 systematically examines the key contents and characteristics of the SCO’s inception and development. It also examines key directions of cooperation and key tasks following the recent expansion of the SCO. Furthermore, we assessed the SCO’s international standing and developmental potential within the international community, while comprehensively examining its development prospects.

The SCO, led by China and Russia, has recently seen its international standing and role significantly increase. With the continued expansion of SCO membership, the scope and role of cooperation are expanding. Since its launch, the SCO has undergone continuous development, evolving beyond a simple regional security cooperation organization into an integrated platform encompassing security, politics, and economics representing the global and Eurasian region. Notably, the 2025 Tianjin SCO Summit produced tangible results for the organization’s development. The summit laid a systematic institutional foundation for military and economic security (including the establishment of four new security centers and the SCO Development Bank), while also further expanding its international standing (including the expansion of member and partner countries) and role. In this respect, it can be assessed as opening a promising path toward expanding Eurasian multilateral cooperation and global multipolarity.

Chapter 4 examines Russia’s strategy for a multipolar world during the Putin era. First, we traced the theoretical origins and development of Russia’s multipolar world strategy, identifying its key features. Simultaneously, we examined the goals, direction, and challenges of Russia’s SCO utilization strategy, aimed at building a multipolar world under Putin’s fifth term from a political and diplomatic perspective. Furthermore, we examined the economic and trade relations between Russia and key SCO member states since the outbreak of the war.

The Russian leadership has outlined strategic goals for establishing a multipolar world order. In summary, first, as a countermeasure to the West’s all-out anti-Russian pressure campaign and strategic containment policy, Russia seeks to strongly check the expanding influence of the West, including the United States and NATO. To this end, Russia seeks to strategically utilize regional multilateral cooperation structures like the SCO to exert its unique influence on Eurasia and consolidate its sphere of influence. Second, Russia is working to expand its support and friendship with Russia in the global arena. Russia prioritizes enhancing cooperation with countries in the Global South, citing the greater cause of solidarity with the “World Majority,” in addition to its existing core partners such as China and India. Russia is striving to expand strategic cooperation with major regional powers such as India, Brazil, Turkey, and Iran, in addition to its strategic and comprehensive partnership with China. Third, economically, Russia seeks to overcome international isolation and circumvent Western sanctions against Russia. To this end, Russia’s primary goal is to further strengthen cooperation with countries in the Global South, including Africa and Latin America, on economic security issues such as energy and food. Furthermore, Russia is seeking to establish alternative economic systems, such as the yuan or local currencies, in trade settlements.

Chapter 5 presents policy implications and recommendations based on an objective of understanding the current situation, essential for formulating a new Eurasian and Northern strategy. This is because it is a crucial issue that is closely related to the following issues: diversifying economic security, such as securing energy and mineral resource supply lines; seeking ways to improve relations with Russia in terms of strategic management of countries surrounding the Korean Peninsula; establishing a plan to strengthen access to Central Asia with the goal of expanding the Eurasian multilateral cooperation network; expanding external support for the Korean Peninsula peace process (securing friendly forces on the North Korean issue using multilateral organizations); and establishing the external position and strengthening the capabilities of a leading middle power through multilateral and pragmatic diplomacy.