South Korean companies have high hopes for the imminent launch of a new U.S.-led economic plan, dubbed the "Indo-Pacific Economic Framework" (IPEF), to address supply chain disruptions and improve deteriorating relations with Japan. But they remain cautious about the anti-China tone of the new plan.

According to the "Korea Herald" report, the issue of South Korea's participation in the IPEF is expected to be the top topic of the summit meeting between President Yoon Sek-yue and President Biden this Saturday (21st) in Seoul. South Korea, Japan, Singapore, Australia and New Zealand are widely expected to join the program.

IPEF aims to strengthen U.S. partnerships with Indo-Pacific countries in a wide range of areas including digital trade, supply chain resilience, infrastructure and green technology. Biden seeks to dedicate resources to the Indo-Pacific region to reshape global supply chains and effectively counter China's growing influence in the region. The Indo-Pacific region is home to top companies in chip manufacturing and related industries.

The US president will most likely announce the official launch of the new program during his trip to Asia this week. He will arrive in Seoul on the 20th for a three-day state visit to South Korea, and then visit Japan on the 23rd and 24th.

According to the report of the Korea International Trade Association, apart from China, the Indo-Pacific region accounts for 44.8% of the world's GDP and 35.3% of the world's trade volume, making it a huge market. Among them, only South Korea's trade volume continued to grow. Last year, South Korea accounted for 47.1 percent of total Indo-Pacific exports, up 5.3 percent from 41.8 percent in 2015. During the same period, mainland China's share remained almost constant at 31%.

In the case of semiconductors, regional supply chains are already established, the report said. South Korea leads in memory chips, while Taiwan leads in foundry. Japan is a major supplier of chip equipment and materials. ASEAN countries are considered major production bases for smartphones and other electronic products.

Another survey conducted by the Korea Chamber of Commerce last month showed that nearly 80 percent of chamber members expressed support for joining the IPEF. They cited the platform's effectiveness in addressing supply chain disruptions and enhancing responses to decarbonization calls. Some analysts believe that this will also play a certain role in improving Sino-Japanese relations.

However, IPEF faces several headwinds. First, Republicans opposed Biden's new plan ahead of the U.S. midterm elections in November, saying the nonbinding alliance would do little to expand market access. Depending on the outcome of the election, the president risks losing momentum.

Another problem is the expansion of the alliance. To gain momentum, it needs more ASEAN countries to join.

The report said the U.S. has recently taken a more cautious approach to China. "The U.S. also reiterated that it will not force member states to decide between the U.S. and China," said Park Seon-min, an analyst at the agency. "South Korea should also seek practical ways to maximize national interests."

The South Korean government has also begun discussing joining the China-led Trans-Pacific Partnership (TPP). “Because it is still in an early stage, we are closely monitoring the progress,” said a senior executive of the South Korean company, who asked not to be named. “The government should handle this issue carefully so as not to cause damage to companies doing business with China.”