China-South Korea ties poised to shake off past gloom

By Dong Xiangrong Source:Global Times Published: 2018/12/3 16:48:39

Illustration: Peter C. Espina/GT



 

With substantial progress made in the Regional Comprehensive Economic Partnership (RCEP) negotiations, Northeast Asia has recently embraced new opportunities for further regional cooperation and enhanced mutual trust. Specifically, with China-Japan relations recovering and a thaw on the Korean Peninsula, China-South Korea relations have attracted much attention.

China-South Korea ties have been stable for most of the time since the establishment of diplomatic relations in 1992, but have been constantly disturbed by historical issues. In particular, Beijing and Seoul have been mired in a standoff over the Terminal High Altitude Area Defense (THAAD) anti-missile system in the past few years. After the announcement of THAAD deployment in South Korea in July 2016, China-South Korea bilateral trade volume dropped 8.4 percent from the previous year, and investment in China by South Korean enterprises plummeted by 22.3 percent in 2017. From 2014 to 2016, the number of annual personnel exchanges between the two countries was more than 10 million, but this number dramatically decreased by a third in 2017 due to THAAD deployment, figures from the General Administration of Customs of China show.

The deployment of THAAD in South Korea undermines China's security and upsets regional strategic balance. After negotiations, China and South Korea finally reached a basic consensus in October 2017. This was made possible through Seoul's reported consent to conditions known as the "three Nos" (no deployment of additional THAAD batteries, no joining of a US-led missile defense network and no trilateral security alliance with the US and Japan). In December 2017, with South Korean President Moon Jae- in's first visit to China, frayed ties began to improve.

In 2018, a warming trend could be seen. According to the General Administration of Customs of China, investment in China by South Korean enterprises from January to October has seen a rise compared with the same period last year, and bilateral trade volume rose 11.5 percent. In March 2018, the first round of negotiations on the second phase of China-South Korea FTA was launched which adopted a negative list to enhance bilateral trade and investment liberalization. It can be seen that the two countries intend to further strengthen economic and trade relations.

Although relations have improved with the consensus on THAAD, there are other irritants in ties between China and South Korea. For instance, it is commonly believed in South Korea that the country's economy has been overdependent on China in the past 20 years. Thus, South Korea has implemented "New Southern Policy," increasing investment in Southeast and South Asia to reduce its dependence on China and diversify risk.

In fact, there is no need for South Korea to be worried since its dependence on China is almost inevitable considering the huge difference in the scale of the two economies. China is the largest trading partner of more than 100 countries worldwide, most of which have asymmetrical economic relations with Beijing. As China deepens its reform and opening-up, China-South Korea economic relations will surely have more opportunities for development.

In the meantime, Chinese society should also shed stereotypes about South Korea. For example, South Korea is often considered a small country, but in fact it is a leader among the middle powers on the international stage with a GDP ranked 11th, and the sixth biggest exporter in the world. In the past decade, South Korea has been one of China's most important trading partners and is ranked third only after the US and Japan, far surpassing other countries. As a close neighbor with 51 million population and about $30,000 national income per capita, South Korea should be one of the most important partners of China.

I just came back from a trip to South Korea in November. I felt the effect of improving relations on one hand, but have some worries on the other. It seems that the public mood in both countries has not been able to come out of the shadow of THAAD deployment. It is important for the two sides to reinvigorate bilateral relations. The two countries have massive common interests in maintaining regional security, stability and prosperity. Without these conditions, both China and South Korea will bear the brunt of direct losses. In the future, both sides should abide by their commitments, fully consider the other party's security concerns, jointly maintain regional security, promote regional economic development and safeguard the momentum of improving bilateral relations.

The author is a research fellow at the National Institute of International Strategy of the Chinese Academy of Social Sciences. opinion@globaltimes.com.cn


Newspaper headline: China-SK ties poised to shake off past gloom


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