During his 2022 presidential campaign, current South Korean President Yoon Suk Yeol called for a “new era of co-operation” with China based on “mutual respect” (Gallo, 2021). The first-ever Korean Indo-Pacific Strategy document, released in December 2022, reiterated this core tenet. Namely, it stated that “With China, a key partner for achieving prosperity and peace in the Indo-Pacific region, we will nurture a sounder and more mature relationship as we pursue shared interests based on mutual respect and reciprocity, guided by international norms and rules” (ROK Ministry of Foreign Affairs, 2022).
Since the establishment of an official diplomatic relationship between the two countries in 1992, the Republic of Korea (ROK) has found itself in a delicate position, between the need to maintain security ties with its most important ally in the East Asia region, the United States (U.S.), and the desire to expand its economic partnership with the People’s Republic of China (PRC). Even though the bilateral trade volume between the two countries grew from $6.38 billion in 1992 to $310.3 billion in 2022, with China becoming South Korea’s largest trading partner in 2004; recently, their ties have come under increasing strain due to several points of friction (Kim, 2023). These include a dispute on the origins of kimchi and hanbok, the source of air pollution contaminating Korean cities, and the handling of the Covid-19 pandemic in China (The Economist, 2021; Turcsanyi and Song, 2022). South Korea’s relationship with Beijing has been defined by complexity, closely intertwined with the ongoing competition between the PRC and the U.S. in the East Asia region.
Therefore, to properly understand the geopolitical significance of this bilateral relationship, it is necessary to look at how the latter is being affected by external issues, which influence how Beijing and Seoul see each other, while at the same time bearing repercussions for the whole East Asia region. Three determinants of instability in the current state of the PRC-ROK relationship are of particular relevance, with the U.S. having a consequential role in all of them. The first of such determinants represents what has arguably been the turning point in the recent history of their diplomatic ties: the deployment on Korean territory of the Terminal High Altitude Area Defense (THAAD) system.
The THAAD system
When the U.S. and South Korean governments announced that they had reached an agreement deploying a Terminal High Altitude Area Defense (THAAD) system in the territory of the Republic in 2016, the PRC’s diplomatic reaction was harsh, leading to a prompt economic retaliation on Seoul. The THAAD system, currently placed in the Korean city of Seongju, is designed to intercept and destroy short, medium, and intermediate-range ballistic missiles in their terminal phase, at a high altitude of 40 to 150 km (Panda, 2016; Park, 2017). Beijing’s concerns are not related to the interception system per se, which would not work in the event that ballistic missiles were to be fired at the United States from Chinese territory, but rather on issues of national security. What the PRC’s administration fears – albeit an unfounded fear – is that the THAAD’s radar system may be able to track the movement of Chinese military hardware inside China, thus representing a way for Seoul, and Washington indirectly, to gather intelligence data and undermine the PRC’s strategic security.
South Korea and the U.S. maintain instead that the sole purpose of the THAAD system is to offer protection against a potential North Korean attack on South Korean territory. The PRC’s government retaliated by strongly limiting the accessibility of Korean cultural products in China, such as K-pop and K-dramas. More importantly for the bilateral economic relationship, it imposed a ban on tour groups from Korea. Furthermore, measures were taken to undermine the operations of South Korean conglomerate Lotte, which provided the land for the THAAD installation to the Korean government. Over 18 months from January 2017, Lotte suffered losses amounting to 1.7 billion USD in China (Diaz and Zhang, 2017; Stangarone, 2019).
Although the THAAD deployment took place during the administration of then President Moon Jae-in (in power from 2017-2022), the issue is still relevant under Moon’s successor, Yoon Suk Yeol. An environmental impact assessment, concluded in June of the present year by the Korean government, will lead to the completion of the necessary infrastructure to reach the fully-fledged deployment of the defence unit, whose status was still considered temporary (Song, 2023). Assurances –termed the “Three Noes” commitment –were made in 2017 by the Moon government in order to revive the damaged bilateral economic relations. The commitment was categorised by no additional deployment of THAAD batteries, no South Korean integration into a U.S.-led regional missile defence system, and no trilateral alliance with the United States and Japan (Stangarone, 2019).
Despite Moon’s pledge, the THAAD system continues to be viewed by Beijing as a symbol of increasingly tighter security co-operation between South Korea and the United States. In the current international context of political and economic competition between Washington and Beijing, this is clearly seen as a negative development by the PRC administration. In turn, Korean public perception of China was influenced by the THAAD deployment and the subsequent economic retaliation put forward by Beijing, leading to less favourable views among the Korean population compared to the pre-THAAD years (Kim et al., 2017).
From the Chinese government's point of view, the main concern remains the ongoing tilting of South Korea towards a more robust collaboration with the United States, as also demonstrated by the second determinant of instability – the U.S. proposal for the establishment of a so-called “Chip 4 Alliance”.
The Chip 4 Alliance
In recent years, the PRC has constantly been an important player in the semiconductor sector, causing many countries worldwide to heavily depend on Beijing for two reasons. Firstly, due to the so-called rare earth elements, vital components in the semiconductor industry that are mainly produced by China. Secondly, because China represents a huge market for the semiconductors produced by other countries (Yoon, 2023; Rinna, 2023). In this context, the disruptions in the semiconductor supply chains caused by the COVID-19 pandemic have led many governments to reconsider their overdependency on the PRC. U.S. President Biden’s administration put forth a proposal in March 2022 to create a semiconductor supply network formed by like-minded and allied countries, extending the initiative to Taiwan, Japan, and South Korea (Kaur, 2023).
The proposal, named the Chip 4 Alliance or Fab 4 Alliance, is not explicitly directed against the PRC, but by looking at the invited countries, it can be argued that the issue of overdependency on China for supplies of resources for semiconductors was a fundamental factor in the establishment of the Alliance. In 2021 and 2022, companies from the four countries accounted for 84 percent of the global semiconductor industry, led by key players such as the Taiwanese TSMC, the Korean Samsung Electronics, and SK Hynix (Lee, 2023). A partnership between these four countries may challenge China’s position in the semiconductor sector in the future.
The Alliance arguably constitutes another instance of the evolving competition between Washington and Beijing. Despite currently lacking a clear structure (until now the Chip 4 has mostly been visible through sporadic meetings between representatives from the four countries), it has the potential to have an important impact on the future trajectories of the China-South Korea relationship. After stating its intention to join the Alliance in December 2022, the South Korean government now faces the need to come to terms with the irreplaceable role played by China in the ROK’s semiconductor industry. In other words, Korea cannot afford to harm its economic relations with the PRC in the semiconductor sector, considering the possibility that Beijing will employ retaliatory measures as already seen in the THAAD case. Indeed, China is at the same time a fundamental export market for Korea, with the PRC and Hong Kong importing almost 60 percent of the total chips produced by Korean companies, as well as a significant source of investments made by Seoul in recent years.
Both Samsung and SK Hynix rely on companies located in Xi’an, Wuxi, and Dalian in mainland China for the manufacturing of part of their chips. Finally, more than 75% of Korea’s imports from China consists of materials that are essential to the semiconductor industry (Kaur, 2023; Stangarone, 2023; Yoon, 2023). If the purpose of the Chip 4 Alliance – albeit not explicitly stated – is to find a solution to the overdependency on the Chinese semiconductor resources and market, South Korea is the most vulnerable among the four members of the Alliance, due to its marked overreliance on the PRC. This situation could require a cautious approach from the Yoon administration in terms of its management of the semiconductor issue, especially considering that, in a country where exports account for 42% of the GDP, semiconductors remain Seoul’s largest export item (Stangarone, 2023).
The Yoon administration, by giving support towards a full implementation of the THAAD system, and by aligning with the U.S. initiative for a Chip 4 Alliance, has influenced the Sino-Korean relationship. What has arguably constituted the main novelty in the broader foreign policy context of the country is Yoon’s push for a diplomatic rapprochement with Japan. As far as China and South Korea are concerned, such rapprochement has been one of the decisive factors leading to the historic Camp David U.S.-Japan-Korea Trilateral Summit, the last of the three determinants of instability analysed here.
The Camp David U.S.-Japan-Korea Trilateral Summit
The Camp David Summit on August 18, 2023 marked a historic and pivotal moment in trilateral relations between the U.S., Japan, and South Korea, as it was the first time leaders from these countries met independently, outside multilateral summits. The current instability in the international security context signalled, for instance, by the ongoing war in Ukraine and the ever-present threat represented by the North Korean nuclear program, was a prime motivator for the three heads of state to meet. Still, the summit was especially made possible by the gradual diplomatic rapprochement between South Korea and Japan, whose leaders met on a series of occasions in the months leading up to Camp David. More importantly, the outcome of the summit, while not producing a structured security alliance between the three partners, is likely to have repercussions for the entirety of the East Asia region. Namely, Biden, Japan Prime Minister Kishida, and Yoon agreed to consult each other in case of common security challenges and threats in the region and to cooperate in various fields, including joint military exercises, supply chains, and new technologies. Furthermore, annual meetings among the heads of state, as well as foreign, defence, trade, and industry ministers have been agreed upon (Cha et al., 2023).
The Camp David Summit was anathema to Beijing, viewed as an audacious attempt by the U.S. to establish a so-called “mini-NATO” with regional partners. The Global Times, the nationalist tabloid published by the People’s Daily (the Chinese Communist Party’s mouthpiece), criticised South Korea’s participation in the Summit even before 18 August. Namely, they wrote: “...we hope that South Korea can remain rational and clear-headed at this critical juncture, not only for its own sake but also for the interests of the Korean Peninsula and Northeast Asia” (Global Times, 2023). Moreover, in Beijing’s view, the Summit could jeopardise the credibility of the Moon administration's “Three Noes” commitment made during the THAAD crisis, despite the absence at the moment of a real alliance between the three partners.
The uneasiness of the Chinese administration over the Camp David Summit, coupled with the interest expressed by Beijing in fortifying the relationships with South Korea and Japan, brought forward a meeting – the first since 2019 – between the foreign ministers of the three East Asian countries, who gathered on 26 November to discuss their partnership on a wide array of issues. Holding a separate bilateral meeting with Korean Minister of Foreign Affairs Park Jin, PRC top diplomat Wang Yi warned his counterpart to “...resist the tendency to politicise economic issues, instrumentalise science and tech issues, and the broad securitisation of trade issues” (Chen, 2023), a not-so-subtle reference to the decision by Seoul to join the Chip 4 Alliance. This statement, intended to put pressure on the Korean administration, does not represent a unique case. In June, Chinese Ambassador to South Korea Xing Haiming caused a diplomatic incident by remarking, "… some people seem to bet that the U.S. will prevail and China will be defeated … Those who bet on China's loss will surely regret their decision in the future" (Nam, 2023).
Therefore, not only did the Trilateral Summit make the Chinese administration realise the urgency of pushing for closer cooperation with South Korea and Japan, but it also constituted another instance, together with the THAAD deployment and the Chip 4 Alliance, of how the current ROK administration is trying to push for a stronger alignment with Washington and other like-minded partners. Such a move will surely impact the future trajectory of the China-South Korea relationship, causing uncertainty on how Beijing will respond to keep Seoul closer to its orbit.
Conclusion
The bilateral ties between China and South Korea in recent years have been characterised by a mutual balancing act. While for Beijing the ROK represents an important ally in the East Asia region in China’s attempt to contain the U.S.’s expanding influence in the area, for Seoul, the economic ties with the PRC are essential, and consequently, South Korea cannot afford to destabilise too much the relationship with its neighbour. However, instability between the two countries is on the rise, caused specifically by the tighter partnership between the ROK and the United States. The full deployment of THAAD will have an indirect impact on how South Korea manages the North Korean nuclear threat, an issue where China (the only ally of the Pyongyang regime in the region) can play a mediator role. The Chip 4 Alliance and the Camp David Trilateral Summit both represent instances, in Beijing’s view, of the progressive tilting of South Korea towards the U.S. camp. The PRC has already shown a low level of tolerance against the ROK’s perceived mismanagement in the past, as demonstrated by the economic retaliatory measures and the recent harsh rhetoric employed by Chinese diplomats. However, these kinds of responses from Beijing may prompt Seoul to align with Washington even more closely in the future. If China and South Korea want to preserve the “mutual respect” in their bilateral relationship, they will have to find solutions to the current challenges that are beneficial to both countries.
ABOUT THE AUTHOR
Davide L. Barattin 白小炟 holds a Master's Degree in International Relations and European Studies from the University of Florence. Passionate about China and East Asia, he is especially fascinated by China’s past and contemporary history. You can find him on Twitter: @DavideLBarattin and on LinkedIn: https://www.linkedin.com/in/davide-barattin/
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