In this post, Tenny Kristiana explores the long-term relations between South Korea and China. She argues that Beijing’s increasing importance as an economic partner helps explain the economic and political upheaval in Seoul following China’s strong reaction to the South Korean decision to allow deployment of the THAAD missile defence system in 2016.
In 2016 Pyongyang’s fourth nuclear test brought a change in missile defense system layout in East Asia. Following this, South Korea’s Ministry of Defense policy chief, Ryu Jae-seung, together with the commander of the United States Forces Korea (USFK) Eighth Army, Thomas Vandal, announced the deployment of Terminal High Altitude Area Defense (THAAD), a ground-based anti-ballistic missile defense system. The deployment was permitted on the grounds that it was in South Korea’s national security interest to defend itself from such North Korean threats.
It was Beijing that reacted most strongly to this deployment, however. It argued that the THAAD radar weakened Chinese nuclear deterrence and second-strike ability, was part of the US strategies to keep China in check by spying on Chinese ballistic missile activities, and would directly damage Chinese strategic security interests. This reaction can be explained by the fact that China, since the Cold War period, has developed a military doctrine that assumes the US theatre missile defense is targeting China, not North Korea.As such, the Chinese government has, since 2014, continually pushed Seoul to reject THAAD deployment, warning of the worsening relations between both countries. Therefore, when Seoul approved the deployment, Beijing wasted no time giving official statements opposing the action, such as that by the Chinese Foreign Minister during his speech to the UN General Assembly.
Yet the fallout went beyond worsening of diplomatic ties. Beijing slammed economic sanctions on Seoul, affecting its business, tourism, and entertainment sectors with Lotte-predicted losses of USD $2.2 billion. This, in turn, provoked administration change in South Korea with the new president immediately opting for proactive engagement with the Xi administration in China. In order to understand the disastrous effect of the Chinese sanctions and the subsequent political upheaval, it is necessary to look at the historical antecedents of China’s importance as a trading partner for South Korea.
The Korean War separated Seoul and Beijing into different alliances, the former siding with Washington whilst the latter allied itself to Pyongyang. In the 1970s, with US-China relations improving, Seoul also began to explore the possibility of bilateral relations with Beijing. These relations started as social interactions, such as academic, postal or athlete exchanges, and evolved into limited trade through Japanese, Hong Kong or Singaporean channels. The indirect trade between South Korea and China took place under the “gate remains closed but not locked” policy and within a decade Seoul became Beijing’s seventh largest trading partner.
Direct economic cooperation began in 1988 under President Roh Tae-woo. The president initiated “Nordpolitik” and “Yellow Sea Plan” which led to the increase of direct trade share from 22% in 1988 to 42% in 1991. In 1990 Beijing and Seoul agreed to have semi-official trade offices and, by January 1992, a trade and investment agreement was signed by both governments. In August that year, both countries achieved diplomatic normalization and, within a matter of months, economic cooperation between the two parties enhanced trade share. Beijing became Seoul’s third largest trading partner in 1993, surpassed Tokyo to reach second place in 2001 and, three years later, replaced Washington as South Korea’s top trading partner, a position it has retained until the present day. (Ye, 2016)
In addition, China is South Korea’s biggest importer and exporter: the trade value between the two countries increased from US$ 19 million in 1979 to US$ 79 billion in 2004. This number continued to increase and, by 2014, surpassed US$ 290 billion. In 2012, 32,000 Korean firms were reported to be conducting business in China. Both countries continue to deepen their economic integration by entering into Free Trade Agreement negotiations which were concluded in November 2014, with the agreement being signed by both parties the following June. In the investment sector, China overtook the US in 2002 as South Korea’s main target destination. A year later, South Korea invested around US$ 1.6 billion in China, making them the third largest investor behind Hong Kong and Japan. Similarly, in 2014 China became South Korea’s third largest investor, spending approximately US$ 490 million in that country.
It is not only economic relations that were improving; China and South Korea also developed their non-political relations, especially in the areas of human resources, student exchange, cultural programs and tourism. In 2012, 62,855 (approximately 26% of) Korean students enrolled in Chinese universities, while similar figures were recorded for Chinese students studying in South Korea. The total personnel exchange had reached as high as 8.22 million in 2013. In the area of tourism, there are more than 800 flights between Chinese and Korean cities every week, bringing millions of tourists from both countries.
On the political stage, too, relations have continued an upward trajectory. The friendly cooperation enjoyed since 1992 became a mutual cooperative partnership in 1998 and was expanded into an inclusive cooperative partnership in 2003 under President Roh Moo-hyun. The partnership was agreed under a policy of balance whereby Seoul positioned itself between Washington and Beijing. In 2008, President Lee Myung-bak enhanced the relationship to mutual strategic cooperation, a path that was expanded and developed under President Park Geun-hye.
Indeed, relations between the two countries changed drastically during President Park Geun-hye’s administration. In her early presidential period, Seoul adopted a foreign policy which made Beijing a priority. President Park sent her first special delegation to Beijing and she visited China before Japan after her first state visit to the US in 2013. She also participated in a Chinese military parade to commemorate the 70th anniversary of China’s victory in Sino-Japanese war. Moreover, South Korea agreed to be a founding member state for the Chinese Asian Infrastructure Investment Bank/AIIB, and President Park used “trustpolitik” policy to enhance trilateral United States-South Korea-China relations. Under this latter policy, Seoul relies more on sticks (sanctions and preconditions) than carrots (humanitarian assistance and trade & investment) in its actions toward North Korea.
China has indicated its support for South Korea’s “China as priority” policy by stating that its eastern neighbor is an important co-operational partner. Further, in July 2014 President Xi Jinping made the novel decision to visit South Korea before North Korea. However, Seoul did not get quite the payment it expected for weakening its alliance with Washington in favor of Beijing. One of the big issues for both countries’ relations was the sinking of South Korea navy warship “Cheonan” by North Korea in March 2010. China, together with Russia, did not support an investigation into the incident and did not apply UNSC sanctions to North Korea. Moreover, when, months later, North Korea carried out an artillery bombardment of Yeonpyeong Island, China supported North Korea by saying that South Korea’s conducting of military drills in the area provoked the attack.
Yet these two incidents did not have a large impact on the changing relations between two countries. That shift came in 2016 when, after Chinese inactivity in the face of repeated North Korean nuclear tests, the Park administration decided to consider the THAAD deployment by open official discussion with the US Force in Korea.
On April 20th, 2017, the USFK deployed two THAAD radars and two launchers. Beijing’s initial response was to put economic pressure on Seoul, but this began to ease as the South Korean Constitutional Court decided to impeach President Park following a massive corruption scandal involving political and business elites. President Park was sentenced to 24 years in prison and ordered to pay US$ 17 million fines for charges of bribery, abuse of presidential power, and leaking state secrets charges. Korea elected a new president, Moon Jae-in, whose campaign displayed a cautious attitude toward THAAD. Beijing officials quickly welcomed the chance to reset both countries’ ties. In late 2017, the two countries agreed to get their relations back on the “normal track”. The new Moon administration decided to review THAAD deployment and halted the four other THAAD batteries poised for deployment. Further, it ordered an environmental impact assessment which it later informed China would take around 10 to 15 months to complete.
The result was that the Moon administration appeased Beijing by providing the “three no’s” assurance: (1) Seoul would not consider deploying additional THAAD units; (2) Seoul would not join US missile defense networks; and (3) Seoul would not join the US and Japan mutual alliance. President Xi’s response indicated that China was willing to work on the THAAD dispute and put Chinese-South Korean relations back on track.
President Moon made an effort to improve the relationship by visiting China in December 2017. He announced a “new start” for Seoul-Beijing relations and both countries’ leaders agreed on four principles to secure peace and stability on the Korean Peninsula: (1) war on the Korean Peninsula could never be tolerated; (2) the principle of denuclearizing the Korean Peninsula would be firmly maintained; (3) all issues, including the denuclearization of North Korea, would be peacefully resolved through dialogue and negotiations; and (4) improvement in inter-Korean relations would be ultimately helpful in resolving issues involving the Korean Peninsula. The President also made a special visit to Chongqing, the home of a major Hyundai factory and a Chinese-South Korean industrial park.
The relations between Seoul and Beijing which were built during the Cold War continue to develop and make Beijing as an important trade partner for Seoul. The change in the trade composition between both countries has led to a South Korean dependence on China. This helps explain the administration and policy change following the decision to deploy the THAAD defense system in 2016 and the subsequent deterioration in Seoul-Beijing relations. China also plays an important role for South Korea on the North Korean issue, especially given Moon’s eagerness to improve relations with Pyongyang. However, the South Korean president’s proactive approach toward Beijing also serves China’s interest. Jung H. Pak (2020) argues that China sees South Korea as a critical part of its effort to establish its preeminence in Northeast Asia, where Seoul’s status as linchpin in the US alliance architecture, its central role in North Korean issues, and its geographic proximity as well as economic dynamism, are all important to Chinese regional strategy. The Moon administration seems to have succeeded in effectively deploying THAAD for its security interest while simultaneously normalizing the diplomatic ties with Beijing, thus maintaining good relations with both the US and China. However, the worsening relations between these two great powers and the new US presidential administration bring new questions about whether Seoul will pick sides or whether it will choose to remain a “Shrimp among Whales” in the Northeast Asia sea?
Tenny Kristiana is a member of the Pacific Forum’s Young Leaders Program. She has completed her second postgraduate degree in International Relations from Graduate School of Asia-Pacific Studies, Waseda University. Previously she studied at the University of Indonesia, majoring in Japanese Studies.
Featured Image: President Park Geun-hye and Chinese President Xi Jinping at a joint press conference on June 27, 2013. Photo by Cheong Wa Dae on Wikimedia Commons.
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