By: Shim Jae Hoon
At their first summit talks in 11 years, China and South Korea skirted their mutual security agenda, dealing with North Korea’s growing nuclear threats, making it clear their first priority lies in boosting economic and trade ties, not dealing with security concerns and passing that problem to the Americans.
On security, currency, and trade issues, both sides were making it clear that, despite the pyrotechnics of the Trump machine’s scramble through Asia last week, there were two Asian countries making decisions outside a weakening Washington’s orbit. At their 90 minutes of talks inside a serene museum chamber in the ancient city of Gyeongju on the sidelines of the Asia Pacific Economic Cooperation Summit forum over the weekend, the two hammered out agreements on bilateral trade, and currency swaps that left the US dollar out of the picture.
In a striking dearth of comments regarding North Korean leader Kim Jong Un’s regime’s growing nuclear arsenal, which South Korean officials claim is now capable of producing 15 to 20 atomic bombs a year, both Chinese leader Xi Jinping and South Korea’s freshly elected Lee Jae Myung claimed that the issue is primarily an American concern.
“The situation has changed much,” Chinese foreign minister Wang Yi, the leading Chinese official handling the North’s denuclearization talks years ago, was quoted as saying. It now appears Beijing regards the denuclearization issue to have passed beyond reversal. Lee and Xi are taking their hands off the issue, with both saying it has become primarily a concern of the Donald Trump administration.
President Lee’s top security adviser, Wi Sung Lac, said no detailed discussion took place on securing a dialogue with Pyongyang. Wang Yi, according to South Korean news reports, said the nuclear issue has now passed beyond the purview of Chinese concern, evidently meaning that although Beijing remains keen to help maintain peace on the Korean peninsula, the task remains essentially an American one.
At the end of their talks, Xi and Wang appeared so circumspect that they even failed to issue a joint communique on what each side holds on the critical issue of security, earning criticism from the conservative opposition People Power Party, whose spokesman issued a statement describing the outcome as “an empty carriage, carrying nothing.”
The failure to delineate where each side stands on the key issue of the peninsula’s security represents a sharp departure from the 2014 Sino-Korean summit, in which Beijing “reaffirmed” its opposition to the development of nuclear weapons, albeit in a frame ostensibly meant to apply to both sides of the Korean peninsula. It was clearly a Chinese face-saving formula, as South Korea doesn’t possess nuclear weapons.
Why is China taking its hands off the North’s ever-expanding nuclear weapons program? According to Chung Dong Young, Seoul’s Unification Minister, North Korea today represents the third most dangerous country capable of attacking the US mainland, behind China and, of course, Russia. The Kim regime is now developing intercontinental missiles capable of hitting New York, courtesy of Putin’s help in exchange for supplying troops to help reclaim the Kursk region of Ukraine.
The security picture has now changed, according to one of the few comments attributed to Wang Yi, a participant in the earlier round of talks to denuclearize North Korea. He apparently thinks Kim’s nuclear program has grown so advanced that it is too late to arrest it. On the other hand, China’s hands-off posture, claiming it is now mainly the Trump administration’s task, may have something to do with China’s own response to Seoul’s recent decision to acquire a set of nuclear-powered submarines from the United States. That would also complicate Beijing’s security calculations.
US President Donald Trump, before leaving Gyeongju, declared the US would provide Seoul with nuclear-powered submarines on condition that they would be built in the United States at the South Korea-owned Philly Shipyard recently acquired by Seoul’s Han Hwa Ocean. But some experts say the facility is much too small to construct a sophisticated nuclear-operated submarine. Seoul wants to build them in Korea, evidently to acquire technology.
Although Xi and Wang have refrained from publicly commenting on the issue, Seoul’s acquisition of nuclear-powered submarines – presumably in multiple numbers – does represent a significant game-changer strategically. The sea around the Korean peninsula has long been prowled by Chinese and Russian nuclear subs, prompting concern not only in South Korea but also in Japan. Seoul’s decision has been partly prompted by its own concern over China’s expanding naval power lapping ever closer to the Yellow Sea boundary.
In recent days, Seoul has made several representations over China’s placing floating markers ever closer to the maritime border between the two countries. That topic was taken up at the summit level this time.
In a related development, China has also sanctioned Han Hwa Ocean for helping US shipping liners. While that has added another source of strain in the bilateral ties, the two countries have just been recovering from the strains produced by Seoul’s 2016 decision to allow the basing of US Terminal High Altitude Area Defense (THAAD) missiles on its soil.
Although the THAAD deployment is aimed at countering North Korea’s potential missile attacks, Beijing has regarded it as a threat aimed at China. With Beijing’s official spokesman calling the episode a case of “a small country challenging the security of a big power,” it triggered tension between Seoul and Beijing, prompting China to start imposing trade restrictions.
The THAAD crisis escalated further over the Covid-19 pandemic, with many Koreans blaming the spread of contagion on China. In the public mind, China’s refusal to aid North Koreans escaping from their country also fueled the animosity that China basically remains a hostile communist dictatorship.
Although tourism has recovered in recent months, Seoul remains alert to any sign of assertive Chinese domination of the South Korean economy. A recently enforced law prohibits foreigners, mostly meaning Chinese, from acquiring properties for the purpose of investment.
But the issue of bilateral trade remains an entirely different matter. Discussion inside the serene museum chamber in the ancient city of Gyeongju was almost entirely taken up with the promotion of economic and trade relations. The two sides signed six “memoranda of understanding” on boosting trade and other economic sectors, among them a five-year won-yuan currency swap deal worth 400 billion yuan and 80.206 trillion won, the equivalent amount of Korean currency, to help ease payment and promote trade. Specifically, this makes wider use of the yuan as a payment medium for bilateral trade as China continues its effort to supplant the US dollar with the yuan as the world’s reserve currency.
The 95-minute summit talks were almost entirely taken up in discussion of growing two-way trade that reached beyond US$300 billion last year, placing China as the top destination for Korean goods. The two actually joked about cyber-espionage, usually a sore subject, when Xi gifted Lee with Chinese-made phones with Korean-language displays. Despite occasional political tension, China makes an exception for the simple fact that it depends on Korea for parts and components needed to produce finished goods for export.
“Our trade has benefitted both sides,” said President Lee, mentioning that Chinese markets have helped Korea to grow, while helping China to increase its exports, a win-win game helping both sides, a favorite phrase of South Korean leaders. The only question mark on the horizon is the unpredictable factor of North Korea, troubling Beijing as much as it does Seoul.
Kim Jong Un’s presence last September, standing next to Xi Jinping together with Vladimir Putin for the celebration of the end of World War II, was emblematic of China’s political balancing act. Xi would happily hand over Kim’s burden to Trump. In a rare convergence of interests, Seoul’s Lee seems to have agreed.