외교안보연구소 발간자료

Outlook for the Yoon Suk Yeol Administration’s China Policy and Policy Recommendations

Outlook for the Yoon Suk Yeol Administration’s China Policy and Policy Recommendations

Outlook for the Yoon Suk Yeol Administration’s China Policy and Policy Recommendations

중국

대한민국

미국

Ⅰ. Introduction
Ⅱ. Diplomacy and National Security: Promoting Cooperation with China Based on the Solid ROK-U.S. Alliance
Ⅲ. Economy and Trade: Managing the Global Supply Chains and Seizing the Upper Hand in Cutting-edge Technologies
Ⅳ. Society and Culture: Promoting Quality-oriented Exchange Opportunities and Managing Bilateral Relations with a “Soft Security” Approach
Ⅴ. Conclusion


Ⅰ. Introduction

August 2022 marks the 30th anniversary of South Korea and China’s establishment of diplomatic relations. Over the past decades\ the two countries’ bilateral relations have faced opportunities and challenges on multiple fronts  – economic\ social and cultural\ political\ military\ and security affairs. In particular\ since the U.S. and Korea agreed to deploy the Terminal High-Altitude Area Defense (THAAD) in July 2016\ South Korea and China’s bilateral relations have never been fully restored. Nevertheless\ compared to 1992 when their diplomatic relations were first established\ the two countries have made tangible progress in various fields despite ups and downs.
 
In line with recent changes in the U.S.-China relationship\ South Korea as a U.S. ally has focused on making diplomatic spaces whenever sensitive\ critical issues that could sour the U.S.-China relationship through strategic ambiguity\ or strategic prudence\ based on the framework of separately seeking security cooperation with the U.S. and economic cooperation with China. However\ amid the intensifying U.S.-China strategic competition\ ambiguity has gradually been losing its strategic value\ and economic and security issues have become interconnected and overlapped more frequently. Against this backdrop\ it is crucial to examine the feasibility of Korea’s two-pronged strategy of separately seeking security cooperation with the U.S. and economic cooperation with China\ and effectiveness strategic ambiguity between Washington and Beijing.
 
In addition\ at a time when the asymmetry of Korea-China relations is increasing with the Korean and Chinese people having unfavorable views of each other\ a majority of Koreans view that the new administration’s China policy should seek to advance South Korea-China cooperation based on mutual respect and promotion of substantive cooperation. With this in mind\ this article aims to forecast the new Yoon Suk Yeol administration’s China policy and provide policy recommendations in diplomatic\ security\ economic and trade\ social and cultural domains. 


Ⅱ. Diplomacy and National Security: Promoting Cooperation with China Based on the Solid ROK-U.S. Alliance

After establishing diplomatic relations in 1992\ the basic contour of South Korea’s China policy has been formulated and implemented to strengthen Korea-China cooperation based on the solid ROK-U.S. alliance. Of course\ the South Korean administrations over the past decades had different political characters and faced diverse external environments. Although the previous administrations swayed between consolidating the ROK-U.S. alliance and promoting cooperation with China because of these factors\ their fundamental focus was on striking a balance between the ROK-U.S. alliance and Korea-China cooperation.   
 
On the onset of the Moon Jae-in administration\ President Moon and his team were tasked with restoring Seoul’s relationship with Beijing which began to turn sour due to the Park Geun-hye administration’s decision to deploy THAAD in South Korea. Although the Moon administration’s appeasement policy toward China has improved the two countries’ relationship in part\ the growing asymmetry in how the two countries perceive each other complicated the picture over time. For instance\ right after President Moon took office\ the seating arrangement for the president’s special envoy to China when the envoy visited China to meet President Xi Jinping sparked controversy in Korea. And later\ the Moon administration was criticized for its overly low-profile attitude toward Beijing when China made a diplomatic discourtesy by not properly arranging President Moon’s luncheons and dinners with high-ranking Chinese officials during his state visit to China. To make matters worse\ the Korean government came to grudgingly face a strategic environment created by a two-pronged challenge – stalled efforts at salvaging Korea-China relations and dwindling strategic trust in the ROK-U.S. alliance.   
 
Therefore\ it is recommended that the new Yoon administration re-calculate the Moon administration’s policy of appeasement toward China\ and make policy efforts to square its shoulders in dealing with China by clearly defining Korea’s values\ identity\ and national interests regarding critical pending issues. To that end\ it is critical for the Yoon administration to build a consensus with its people first on Korea’s values\ identity\ and priorities in the pursuit of core national interests. Once the consensus is made\ it is necessary to re-establish Korea-China relations. It is important to clarify its strategic goals by agenda and formulate detailed responses to sensitive issues driving a wedge between Beijing and Washington - safeguarding human rights and democracy\ developing supply chains\ participating in the IPEF\ the South China Sea dispute\ and cross-strait issues. 


Ⅲ. Economy and Trade: Managing the Global Supply Chains and Seizing the Upper Hand in Cutting-edge Technologies

Since 1992\ South Korea has endeavored to make the most of its diplomatic relations with China to maximize economic benefits\ which at times ended up making unnecessary concessions. In the meantime\ China’s continued economic growth propelled itself to form a G2 with the U.S. It seems that South Korea sought to deepen its economic ties with China superficially without a profound analysis of the strategic implications of China’s economic rise\ which resulted in policy inertia.   
 
Giving priority to forging close economic ties with China has complicated the problems of South Korea’s strategy of reaching out to the U.S. for security cooperation and China for economic cooperation. In other words\ the previous administration’s efforts at economic cooperation with China have raised Washington’s doubts about South Korea’s commitment to the ROK-U.S. alliance. This is because Washington’s strategic thinkers viewed that Seoul’s increasing economic dependence on China will likely erode the alliance’s solidarity by adding new factors to Seoul’s security calculations. Consequently\ Seoul has been struggling with growing risks that could lead its relations with Beijing and Washington to go downhill amid fierce strategic competition between the two powers. 
  
However\ Korea-China economic relations\ which used to be characterized by the lopsided gains for Korea\ have undergone fundamental changes over the past years\ transforming into mutually beneficial or competitive ones. Economic exchanges between Korea and China kept surging until 2010\ which remained mutually beneficial and complementary around that time. However\ Beijing’s economic retaliation against Seoul’s decision to deploy THAAD hit hard on the Korean economy. Although some expected that Seoul and Beijing could go back to the previous level of economic cooperation before the THAAD dispute if the two sides negotiate a political settlement\ such expectation turned out to be unrealistic. Instead\ with China’s continued economic rise\ the Korean economy is experiencing stagnant exports to China\ decreasing trade surplus\  and economic competition between Korea and China is intensifying across many industries. 
 
The fundamental factor at play is that the Chinese economy has undergone structural changes\ discarding its previously market-oriented policy and reinforcing the CCP’s grip on the economy through active industrial policies. Over the past years\ Beijing has pursued the “dual circulation” strategy\ which aims to shield China from growing economic uncertainties amid the intensifying strategic rivalry with the U.S. The overarching goal of the “dual circulation” strategy is to boost the external circulation\ with a focus on the inner circulation by invigorating the domestic market as the primary driver of economic development. The primary objectives of the strategy include attaining higher levels of self-sufficiency in key areas by enhancing technological innovation and securing critical inputs by diversifying supply chains. This shows that Beijing has re-set the nature of its economy by distancing itself from its reform and opening up policies to promote economic security based on the domestic market.
 
The U.S. has been decoupling its economy from the Chinese economy since the Trump administration began to impose tariffs on China. And Beijing’s response to the decoupling pressure with efforts to refashion its economy toward a more self-sufficient one. Under these circumstances\ it is inevitable to re-organize the current global supply chains tightly woven with China’s economy\ and South Korea will likely be affected by such changes in the coming years. 
 
Most importantly\ China’s economy has been facing serious downward pressure in recent years. As strategic competition between the U.S. and China is increasingly characterized as part of a broader conflict between democracies and autocracies\ Beijing’s efforts to highlight the strengths of socialism with Chinese characteristics have led to undesired results stunting China’s economic growth. President Xi’s pursuit of “common prosperity\” which is the ideologically laden initiative\ backfired and slowed the economy. And Beijing’s zero-Covid strategy has led to critical shutdowns of megacities like Shanghai\ dealing another serious blow to the Chinese economy. In addition\ the aging population and the subsequent reduction of the working-age population will eventually make a decline in China’s long-term growth inevitable. As the continued growth of the Chinese economy is no longer a fixed constant\ the Korean government needs to explore a bilateral relationship based on mutual respect\ and veer away from the old lopsided cooperative relationship.  
 
Envisioning a different Korea-China relationship does not mean Seoul can afford to ignore its economic ties with Beijing. Given the sheer size of China’s market and its economic power\ Korea needs to constantly cooperate with China in the economic arena. With the global supply chain growing more fragile amid the U.S.-China rivalry\ we need a ‘China Plus One’ strategy to manage supply chain disruption risks and seek economic diversification. Moreover\ efforts should be made to conclude the follow-up negotiations on the Korea-China Free Trade Agreement\ which will provide an institutional framework for cooperation between the two countries.
 
Amid intensifying competition with China across various industries\ Korea desperately needs a competitive edge in semiconductor manufacturing and other cutting-edge technologies. The focus of the strategic rivalry between the U.S. and China is gradually shifting towards winning the technology race. This is why the U.S. has pushed for decoupling from China in the cutting-edge technology arena. And China\ for its part\ has been investing heavily to develop its own innovations. Korea has achieved technological advancements successfully based on close ties with the United States. Maintaining a relationship built on trust with the U.S. in the advanced technology arena will help Korea protect its national interests in the coming years. 


Ⅳ. Society and Culture: Promoting Quality-oriented Exchange Opportunities and Managing Bilateral Relations with a “Soft Security” Approach

Since the establishment of diplomatic relations\ Korea and China have made significant efforts to promote cooperation and exchanges on social and cultural fronts. Owing to such efforts\ there have been constant improvements in some indicators related to social and cultural exchanges. For instance\ data shows that Korea and China both have sent more visitors and students to each other. But there are always some parts of the relationship that remains unquantifiable\ such as how Koreans and Chinese people view each other. The numbers often fail to capture the true reality of Korea-China relations\ which creates a misleading impression that the relationship has constantly been in good shape across all spheres.
 
In fact\ there has been a constant increase in the number of Koreans holding unfavorable views on China\ and this trend has also upset the Chinese public. With the public on both sides frequently trading bitter remarks\ the relationship between the Korean and Chinese public has soured over the years. The bitterness between the two sides is now spilling over into politics. The new Korean president will inherit the daunting task of managing the country’s complex relationship with Beijing. 
 
To address this issue\ the two governments agreed to make efforts to foster favorable views of each other to build a stable long-term relationship. Promoting friendly sentiments was one of the main agendas the Korean Minister of Foreign Affairs Chung Eui-yong and Minister of Foreign Affairs of China Wang Yi discussed at their meeting in Xiamen on April 3\ 2021. Also\ the declaration of the Year of Korea-China Cultural Exchanges (2021-2022) has facilitated cultural exchanges between the two countries across 160 private sectors. 
 
Among the 110 national tasks to be announced by then-president-elect Yoon Suk Yeol’s transition committee\ the 96th task was “pursuing East Asia diplomacy based on liberal democratic values and shared interests.” This includes expanding the scope of cultural exchanges in an effort to bolster Korea-China relations\ indicating that the Yoon government will continue to pursue the initiatives designed to boost cultural exchange opportunities. Seoul and Beijing have continued to promote cultural exchanges\ even during the days when diplomatic frictions strained bilateral relations. But as the latest wave of anti-China sentiment in Korea demonstrates\ merely increasing the number of cultural exchange opportunities will not by itself make bilateral relations more amicable.
 
The current approach focused on increasing exchange opportunities could complicate the matters in two ways. First\ the two governments often stress that Korean and Chinese culture share some similarities to encourage cultural exchanges. This cultural similarity\ however\ is at times a double-edged sword; it could connect and divide the two countries at the same time. The latest flurry of conflicts between Seoul and Beijing has revolved around cultural appropriation and history issues. These are structural problems that often plague a country’s relationship with the neighbors touching its borders. Increasing the opportunities for exchanges and interaction\ therefore\ is not a panacea. Culture is central to national identity\ so in many cases\ making compromises in a row over culture is rarely an option. 
 
Second\ due to the recent resurgence of nationalism around the world\ non-political\ “low politics” issues involving a country’s history and culture are increasingly morphing into security issues. As seen in the row over the deployment of the Terminal High Altitude Area Defense (THAAD) in 2016 and the Russian invasion of Ukraine in 2022\ disputes over ethnic identity and culture are closely linked to territorial and sovereignty issues. These issues can cause a real stir when conflicts take place in cyberspace. It was the online spat between internet users in China and South Korea that sparked some controversies associated with culture and history. Since the launch of the Northeast Project by China in 2002\ netizens on both sides have started the spats over the origins of Hangul\ Arirang\ Kimchi\ and Hanbok\ in 2010\ 2011\ 2021\ and 2022 respectively. Another controversy erupted in 2020 when China made a comment that to some extent distorts the cause of the Korean War. 
 
Despite a series of efforts to defuse tensions\ Korea and China have found themselves embroiled in a series of spats in the social and cultural spheres. To resolve the grievances\ we need to take a gradual\ measured approach. The two countries should first revisit the structural issues marring the relationship\ instead of seeking a quick fix. After carefully diagnosing the source of tensions\ both sides should explore ways to repair the damaged relationship. Korea and China are both major countries in the region\ and the two countries will continue to see each other as indispensable partners in bringing peace to the Korean peninsula and achieving prosperity in East Asia. Increasing cultural exchange opportunities without addressing the fundamental problems will only backfire and create new frictions. 
 
To resolve the fundamental problems facing bilateral relations\ discussions at the high level should focus on social and cultural agendas. China over the past years has avoided an open\ candid discussion on historical disputes. And when it comes to the issues surrounding cultural and ethnic identity\ China has attempted to narrow the scope of the ongoing controversy by only trying to deal with the issues associated with the ethnic Koreans in China\ also known as Joseonjok. As a result\ the two countries had very few opportunities to share candid opinions. It is important to acknowledge that an active engagement with the Joseonjok communities will help Korea enhance its national image and boost its global credentials.  
 
Most importantly\ research efforts should focus on providing accurate information and reliable content to the Korean and Chinese public to keep them away from nationalist ideas. Historical rifts and cultural spats are some of the most sensitive issues that often stoke anger among South Koreans toward China. This is why it is so important to adopt a mutually acceptable interpretation of history and culture that does not hurt Korea’s national interest. In other words\ we need a “soft security” approach to resolve the growing rift with China in the social and cultural spheres. 


Ⅴ. Conclusion

It is expected that South Korea’s new president Yoon Suk Yeol will bring about a significant shift in South Korea's policy toward China and seek a deeper alliance with the United States. Korea has tried to forge a stronger relationship with China while keeping the ROK-U.S. alliance as the key pillar of its foreign and security policies. President Yoon’s commitment to a deeper alliance with Washington\ in that sense\ is a necessary move. However\ boosting the ROK-U.S. alliance should not mean drifting away from China and not leaning heavily toward the U.S. on foreign policy. This could create another imbalance in Korea’s foreign policy\ and the new government led by Yoon should take a cautious approach to find the right balance between Washington and China. 
 
To this end\ the Korean government needs to communicate a message that it will define a Korea-China relationship based on “harmony but not uniformity (和而不同).” This means showing respect for each other’s political system and cultural values. And to confront some the thorny issues facing the two sides\ Korea needs to utilize multilateral diplomacy to induce 'limited damage' on bilateral relations. Also\ the two governments should make sure that conflicting national interests do not unleash more nationalist feelings among the Korean and Chinese public alike. 
 
Amid the intensification of U.S.-China strategic competition\ China is gearing up to build a more amicable relationship with neighboring countries\ including Korea with which it marks the 30th anniversary of diplomatic ties. Beijing’s recent efforts at diplomacy will present diplomatic opportunities for Korea as well. By working together\ the two countries may find a viable solution to repair ties and ensure that the strategic partnership between Seoul and Beijing could deliver mutual prosperity to the bilateral relationship.


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