Seoul Looks at a New China Under Xi

The Communist Party of China held its 19th National Congress in 2017. Its focus was then on a “New Era,” a slogan that fills the billboards along China’s streets. It declares that the Communist Party of China will prepare for a “different century” as it celebrates its centennial in 2021.

China will not subvert the existing liberal world order, but its competition with the US over institutions, discourse and political structures will intensify. It announced its “proactive” foreign policy and has started to design institutions to support it. In this vein, China proposed a community of common destiny, combining new concepts on security, loyalty – emphasizing both righteousness and interest – and civilization. It especially attempted to secure a bridgehead in global power by focusing its diplomatic force projection in Asia, China’s “periphery.”

The traditional fault lines – the East China Sea, the South China Sea and Taiwan – resurfaced. The Korean Peninsula issue came into play as US President Donald Trump put the North Korean nuclear issue high on his foreign policy agenda. This made it harder for South Korea to form its policy towards China. It left South Korea in a trilemma where Korean Peninsula issues will be dependent on the China-US relationship, regardless of whether they cooperate with or confront each other.

However, South Korea could not determine its own path in foreign policy during its nine years under conservative administrations. It either bandwagoned with the US or adapted to the new order brought about by China’s rise. It was ineffective even in issues that were directly involved with its core national interests and pride. This was the result of path dependency, while losing democratic dynamism and the link between domestic politics and foreign policy. Therefore, South Korea should attempt to reflect the people’s will expressed in the candlelight vigils that brought about the downfall of former President Park Geun-hye.

Two Views on China

One sees that China does not consider South Korea to be an equal sovereign state. Huang Zunxian, a politician in the Qing Dynasty, proposed in his book A Policy for Joseon, that Korea should strengthen itself by befriending China, allying with Japan, and banding with the US in order to fend off Russia. This reflected the Qing world view, that Joseon was not its equal.

Some argue that this sense of Chinese superiority is being revived. Moreover, they see that China doesn’t have the will to fundamentally help resolve Korean Peninsula issues by strongly pressuring North Korea, but rather has been employing loopholes in international sanctions against North Korea and not concerning itself with regime transition in North Korea. They argue that China is seeking to establish a 21st century version of the tributary system, pursuing beggar thy neighbor policies, and strengthening its territorial obsession with the Korean Peninsula.

Disappointment in China’s crude diplomacy on the issue of the deployment of the US THAAD missile-defense system in South Korea confirmed this prejudice. They believe China will recognize South Korea’s strategic value as South Korea strengthens its alliance with the US in attempting to overcome China. They have amplified the idea of China as a threat and that South Korea should be on alert and give up the belief that cooperating with China will result in changing North Korea.

Another view is to accept China “as is,” a realist view. This argument says that South Korea’s core national interests – unification and resolution of the North Korean nuclear issue – cannot be achieved without China’s help. It is not realistic or possible to demand that China, the patron of North Korea, enforce more sanctions against Pyongyang. Moreover, China helped South Korea’s economic dynamism by being both the world’s largest market and a neighboring country at the same time. South Korean companies cannot innovate or compete globally without accessing China.

Decreasing dependency on China through diversification, the Japanese method called the “China+1,” is only possible theoretically. Since the Moon administration’s inauguration, China and South Korea’s policies are converging as North Korea’s struggle to be recognized as a nuclear state unfolds. The two countries’ sense of a shared goal of the denuclearization and evolution of the North Korean regime is increasing. Cooperation between South Korea and China can lead to improvement not only in inter-Korean relations but also in the North Korea-China and North Korea-US relationships.

Thus, the practical strategy of using China is worth considering. It also incorporates the view of the Trump administration as hurting multilateralism and international openness, fundamentals of the liberal world order, while pursuing a policy of “America First” and playing power games with bilateral agreements such as the KORUS FTA and levying harsh trade tariffs.

The New Normal

South Korea and China established their diplomatic relationship in 1992. China was seeking an international breakthrough against international sanctions following the Tiananmen Square protests of 1989. South Korea’s Roh Tae-woo administration wanted to pursue its Nordpolitik. It was a relatively smooth process because China did not request economic aid as the Soviet Union did of South Korea. The critical issue between them was confirming the “One China” policy, not economic issues.

Since then, the South Korea-China relationship has elevated from good-neighborly to a comprehensive and strategic cooperative partnership, as the administrations in South Korea have changed. Ironically, the Lee Myung-bak administration, which emphasized South Korea’s alliance with the US, established a “strategic” relationship with China in 2008. The Park Geun-hye administration was also active in improving the South Korea-China relationship, such as participating in the Second World War anniversary parade in Tiananmen Square, despite tacit opposition from the US; participating in the Asian Infrastructure Investment Bank (AIIB); and signing the South Korea-China FTA. Trade between the two countries dramatically expanded from $6.4 billion to $240 billion in 2017.

Trade and investment between the two countries is based on mutual compatibility and comparative advantage, deepening economic co-dependence and creating various venues for cooperation. Increased personal interchange worked as a buffer whenever high politics were unstable.

Diplomatic relations were complementary during the 25 years after their establishment. China was not a rule maker in the world, so there was a lot of room to cooperate. Conflicts were on soft security issues such as history and trade. Their resolution was relatively easy and did not take long. During the decade of progressive administrations in South Korea, South Korea and China narrowed their policy gaps through the two inter-Korean summits. The two countries shared the principle of peacefully resolving the North Korean nuclear issue, the most critical issue on the Korean Peninsula. They established a multilateral security regime, including the Six-Party Talks, to enhance trust in policies.

The Moon administration was able to resolve the THAAD issue early in its tenure because the two countries shared similar goals on where South Korean foreign policy is headed, on the similarity of policies towards North Korea, and on the importance of improving South Korea-China relations. This shows that future development of South Korea-China relations will depend on how much will and capacity South Korea has to affect and move the US and North Korea.

However, China’s policy toward the Korean Peninsula has the possibility to experience a fissure in perceptions, approached from one perspective of regional issues and from another encompassed under US-China relations, and is no longer a question of bilateral relations. Due to the change in China’s economic structure and the improvement in its industrial competitiveness, economic competition between South Korea and China is gradually growing while mutual complementarity is disappearing.

Excluding a few sectors such as semiconductors and petrochemicals, where the Trade Specialization Index is relatively high, South Korea’s companies are losing their competitiveness against Chinese companies. If this trend continues, there is a fear, which is not unfounded, that South Korea could become China’s subcontractor base within the next decade. On top of this, because South Koreans have a long historical memory of the tributary system, and have a different political ideology, it is difficult to chemically bind the heterogeneous identity of South Koreans and Chinese under the “humanities community,” as has been done with the “Chinese character community” and the “Confucianism community.”

Exogenous Factors and Challenges

Current South Korea-China relations have become more complicated as exogenous factors, mostly third-party factors, have intervened. First is the problem of unification of the Korean Peninsula. China has continuously supported the unification of the Korean Peninsula in principle and officially, and has argued for a voluntary and peaceful method of unification. However, North Korea is virtually promoting a “two Koreas” policy, and in a situation where US influence is strong, it is difficult for South Korea and China to easily agree on the end game for unification of the Korean Peninsula.

Moreover, China is uncertain whether the unification of the Peninsula would be advantageous for itself, so it may prefer the status quo by supporting peaceful coexistence until the two Koreas enter a specific unification process.

Second is the South Korea-US alliance. Although dynamics have changed, past South Korean administrations have basically maintained the pillar of that alliance, and in reality weighted South Korea-US relations and South Korea-China relations differently from a strategic perspective. However, China has gradually begun to perceive, and later strongly perceive, the South Korea-US alliance as a “legacy of the Cold-War.”

Meanwhile, although China has realistically accommodated the offshore balancer role of the US, if South Korea’s inclination towards US policy deepens and inter-Korean relations are stalled, it will tend to blame the South Korea-US alliance. In other words, the level of Chinese opposition will increase as diplomatic signals shift, such as participating in the encircling net around China or attempting to change China’s policy by strengthening the South Korea-US alliance.

In particular, China has been trying its utmost to avoid a situation where South Korea-US-Japan security cooperation develops into a regional alliance targeting China.

Third is the North Korea issue and related North Korean nuclear issues. The conservative South Korean administrations have argued that China should isolate North Korea and break its desire for provocation through coercive diplomacy, and if North Korea does not denuclearize in the end, regime change should not be ruled out.

China, on the one hand, actively criticizes North Korea’s nuclear tests, while on the other hand maintaining the denuclearization stance and also supporting the “open and reform through stability policy” based on nonintervention. The Moon Jae-in administration’s perception of North Korea opposes unification by absorption and emphasizes the possibility of unification through peaceful coexistence, but this does not mean that it has deviated from the framework of the South Korea-US alliance.

Although policy similarities with China have increased, methods differ, including sanctions intensity, conditions of a possible nuclear freeze, continuance of the suspension of South Korea-US joint military exercises and North Korea’s nuclear missile testing, and conditions for Six-Party Talks.

Fourth is the issue of THAAD. South Korea and China announced the “negotiation outcome regarding THAAD” on October 31, 2017. However, China made clear again that it opposes the THAAD system already deployed in South Korea, on the basis of national security concerns. It also mentioned that it noted South Korea’s position and decided to appropriately manage related problems. In other words, China does not only see the THAAD issue as “resolved” in its current state, it also still opposes the argument that THAAD deployment is related to North Korea’s nuclear program.

For its part, South Korea was clear that it will not join US missile defense (MD), deploy additional THAAD units, or pursue South Korea-US-Japan military cooperation, but it maintained the position that THAAD is a defensive weapons system and a matter of the right to self-defense. This seems to reflect South Korean domestic public opinion on the THAAD issue. From this, if the character of THAAD deployment changes with the lapse of the general environmental impact assessment, there remains the possibility for a reemergence of the conflict with China over the issue.

Managing South Korea-China Relations

With last December’s South Korea-China summit providing momentum, South Korea-China relations have been put on track for normalization. First, ultimately, improving inter-Korean relations would help solve the Korean Peninsula issue, and it has been agreed that a peaceful and diplomatic solution is important. In particular, in a situation where North Korea-China relations are aggravated, improvement in inter-Korean relations can produce policy synergy.

The context of emphasizing “more cooperation” instead of South Korea requesting “more sanctions” from China also lies here. Meanwhile, regarding the THAAD deployment issue, the two countries conducted under-the-table talks and reduced diplomatic sensitivity surrounding the issue. South Korea clarified that it opposes additional THAAD deployments, while China wanted to prevent the issue from burdening its Korean Peninsula policy, because all pending issues in South Korea-China relations were held hostage to the THAAD issue.

Furthermore, South Korea and China announced their relationship as a strategic cooperation partnership, but the substance does not meet the title. Considering this, finding the key to relieving China’s economic retaliations, exchanging memoranda of understanding in seven areas with big potential, including the economy, trade, energy, and health, and also launching hotlines to establish a crisis management system were all possible because the two countries were loyal to the foundation of international cooperation, changing their own policy for the sake of common interests.

However, China is on the one hand active in improving relations with the Moon Jae-in administration, but on the other hand presenting a cautious attitude. This is because, after reviewing the background of the sudden change from the “historically best relations” to “historically worst relations” during the Park Geun-hye administration, it is guarding against excessive optimism regarding South Korea-China relations at this early stage.

At the foundation, with the advancement of North Korea’s nuclear capabilities, there is a difference between South Korea and China regarding the definition and perception of denuclearization, non-proliferation, nuclear freeze, peace regime, and “verification.” The Moon Jae-in administration selected “denuclearization, the South Korea-US alliance and peace” instead of the pre-existing and established formula of “denuclearization, the South Korea-US alliance and unification.”

As a result, it reduced the policy gap with China that was previously sensitive towards a sudden change in North Korea and arguments in favor of the North’s collapse. Ultimately, whether South Korea has the will and capacity to influence North Korea and the US will become the barometer of South Korea-China strategic relations. The PyeongChang Winter Olympics could be said to have been the diplomatic stage for such a path.

South Korea should prepare for a New Normal in South Korea-China relations. As South Korea-China relations develop in all directions, it has become impossible to prevent the emergence of any and all possible issues, and there is the risk of a small source of worry expanding into a big danger.

In particular, China’s socialist system is strengthening and state intervention in the market is increasing. In foreign policy, a Chinese solution is actively coming to the fore, meaning that policy conflict between the US and China will be a constant risk. This is where is it important that South Korea’s response is prompt, and further, where it needs to be bold. In reality, there is a need to accumulate diplomatic assets to say “no” to China, and to create a win-set that encompasses the issues of democracy, human rights, and freedom that came out of the candlelight vigils that led to the downfall of former President Park Geun-hye, and extensively use this win-set in South Korea-China relations.

Only by doing so can South Korea say “no” to the US. Only when the argument that South Korea should strictly adhere to its alliance with the US is overcome can South Korea’s policy options towards China expand. Thus, it is a matter of expanding room to cooperate. For this, a thick strategy towards China should emerge. However, the infrastructure of knowledge to achieve this is greatly lacking, and a method for injecting strategic structure into the policymaking process is unclear.

Being accustomed to path dependency and by focusing on managing the situation, South Korea will eventually lose leadership on Korean Peninsula issues. By capturing the perfect opportunity “after PyeongChang,” a bold breakthrough to change lanes and surpass its opponents on the curved track is needed. Time is by no means on South Korea’s side.

Hee Ok Lee is currently a political science professor at Sungkyunkwan University and has been the director of the Sungkyun Institute of Chinese Studies since its establishment. This is reprinted with permission from the East Asia Foundation.