South Korea’s Strategic Options and Their Effects on Sino-Korean Relations

Bom Suk Kim

Researcher, Yonsei Institute for North Korean Studies

Recently, the main diplomatic challenge for South Korean leaders is having to choose between the US and China. In the beginning of 2015, South Korea was stuck in the crossroads of siding with either the US for the implementation of Thermal High Altitude Area Defense (THAAD), an anti-ballistic missile system, or siding with China by joining the Asian Infrastructure Investment Bank (AIIB).

If we take a look at THAAD, Chinese Assistant Minister of Foreign Affairs Liu Jianchao expressed China’s concerns in March claiming that South Korea’s security policy should not negatively affect its neighboring countries. The Chinese Foreign Ministry announced that no country should pursue its own security interests in the case that it will also damage or impede on the regional peace or security of other countries. To China, the deployment of THAAD does not simply mean the security of South Korea, but it is also part of the US’s own personal pursuit of keeping China’s power in check. Unsurprisingly, China opposes THAAD.

However, China’s opposition of THAAD and its associated public pressure on the subject caused a backlash in South Korea. South Korea requested China for its help for North Korea’s denuclearization and North Korea’s military threat. And South Korea criticized China as infringing upon South Korea’s national security because China is heavily opposing THAAD. This has heightened tension between the two countries.

Economically speaking, China is South Korea’s largest trading partner and investor; the FTA with China is South Korea’s largest deal. Turnover between the countries in 2014 was US$1.716 billion; South Korea invested US$39 million in China while China invested $11 million in South Korea. South Korea and China officially signed an FTA agreement this past June, which was ratified by the National Assembly to go into effect within this year. In addition to the expansion of economic exchanges, the rapidly rising number of Chinese visitors is boosting Korea’s tourism industry. In 2014, there were 6.3 million Chinese tourists who visited South Korea which was as much as a 46% percent increase from 2013. Meanwhile, the number of South Koreans visiting China increased by 4.1 million people, or a 3.6% increase on a year-to-year basis.

Aware of the importance of these strategic bilateral relations, South Korea decided to join China’s AIIB after eight months of debate. Thus this past April, China made South Korea the 58th founding member to ratify. China owns the largest stake of the AIIB, 44 percent, which means they wield the most power. Thus South Korea’s main concern is if the Board of Directors will still reflect comprehensive participation in the decision-making process, rather than just pursuing China’s interests.

Now there are three options for South Korea to react to the rise of China. The first is to adopt the bandwagon strategy. This strategy implies that South Korea accepts that China is the center of regional order, acknowledging China’s rise. By implementing the bandwagon strategy, the two countries’ relationship would improve and China can benefit from influencing North Korea.

The second option is the balancing strategy, using the tripartite alliance between South Korea, U.S., and Japan to keep China in check—a tactic that was also used in the Cold War. But because relations between South Korea and China have recently strengthened, it has become increasingly harder for South Korea distance itself from China. There are also two kinds of risks in creating a tripartite alliance: abandonment and entrapment. Firstly, the danger of abandonment is that the strategic alliance between the US and East Asia could change. In order for the US to keep China in check, the US could demand an increased role for the national security of Japan. The US would then try to deploy THAAD in Japan instead, abandoning or damaging relations between the US and South Korea. The second threat is that South Korea could get dragged into relations with the US and Japan to keep China’s power in check. Surrounding the Taiwanese conflict, in the case that the US and China’s conflict breaks out, South Korea could be called upon by the US to intervene.

So the third option is risk diversification, an ambiguous strategy that supports a case-by-case approach. The risk diversification strategy maintains friendly relations as well as strategizing ambiguity. In supporting a case-by-case scenario, a different country can sympathize with a transparent rule; for instance in the problem with history, South Korea and China are in agreement in criticizing Japan and in the case of its security problem, South Korea is in agreement with the US.

Ultimately, the best choice for South Korea is to strengthen its relations with the US and China simultaneously. By implementing the diversification strategy, South Korea has joined the AIIB for its own economic advantage, and for national security they have sided with the US to deploy THAAD. In South Korea’s future, there may be further reason for it to choose sides between China and the US. But at least in this case, striking a fine balance between economic and security is necessary to help South Korea’s future.

Translated by Victoria Kim