August 24, 2022, marks the 30th anniversary of the diplomatic relations between China and South Korea. From enemies who once faced each other on the battlefields of the Korean War, Northeast Asia’s two close neighbours not only have discarded their Cold War animosity but have since 1992 developed economic ties and formed a comprehensive strategic partnership.

The past three decades have seen significant expansion of economic, diplomatic, educational, and cultural dimensions. Without question, bilateral economic ties have been the most developed, with a deep interdependence between the two countries. Trade grew from $6.38 billion in 1992 to over $313.4 billion in 2018, and the two countries have signed a free-trade agreement.

In addition, China has also become a major destination for South Korean foreign investment. Likewise, both Chinese and Korean students were the largest cohorts of foreign students prior to the outbreak of Covid. In addition, Korean culture exports, from soap operas to K-pop have become cultural attractions to Chinese audiences.

Diplomatically, the two countries have worked together in response to the nuclear proliferation challenges on the peninsula, in particular North Korea’s pursuit of nuclear weapons and ballistic missiles. During the 2003-2008 Six Party Talks, Beijing and Seoul both preferred diplomatic solutions to the nuclear issue.

The two countries have maintained close consultations and China has supported inter-Korea dialogues and the expansion of economic ties between North and South Korea. Beijing and Seoul have also established high-level security and defense dialogues.

Structural constraints

Despite these positive developments during the past three decades, there are significant structural constraints that have caused periodic setbacks in the bilateral relationship. These include differences in the two countries’ ideologies and political systems, opposing security alignments and alliances, divergences in diplomatic priorities and the use of economic statecraft, and issues related to historical and cultural legacies.

China and South Korea have clashed over the interpretations of historical legacies and events, such as the dispute over Goguryeo/Gaogouli historiography which is a continued spat over cultural heritage between the two countries. Such controversies often stoke nationalism in both countries, even as social, educational, and cultural contacts expand between the two peoples.

Even though both Beijing and Seoul agree that the North Korean nuclear issue should be managed through diplomatic means, the ways by which China and South Korea handle major incidents driven by domestic and foreign policy considerations at time have led to estrangement in bilateral relations. One prominent example is the 2010 Cheonan incident where North Korea sank a South Korean corvette, killing forty-six crew members. Seoul demanded tough sanctions on North Korea as well as an international investigation. Beijing, however, remained ambivalent and called for calm out of concerns over peninsular instability.

Perhaps the most serious incident that sank bilateral relations to their lowest point was the deployment of Terminal High Altitude Area Defence (THAAD) systems in South Korea in 2016. China imposed economic sanctions on South Korea in retaliation against Seoul’s decision to host US anti-missile systems, costing South Korean businesses at least $7.5 billion in economic losses.

The crisis was eventually defused with the two countries reaching a tacit agreement whereby the newly elected Moon Jae-in government reportedly pledged the so-called ‘three noes’ – no additional deployment of THAAD batteries, no South Korean participation in a US-led regional anti-missile system, and no trilateral alliance with the United States and Japan.

A watershed

The THAAD episode has become a watershed event in China-South Korea relations. Most importantly, it fundamentally changed South Korean public perceptions of China. In the past, China was viewed as a promising market with great economic potential, and it was felt that Beijing could also help to manage the North Korean nuclear issue and play a positive role in Korean unification. This optimistic picture has now been replaced with growing concerns over how China will exercise its power, including use of coercive economic measures against its neighbours.

This changing mood is captured in the steep dive in South Korean public opinion of China. From a reasonably favourable 60 percent in 2016 to 26.4 by 2021 and, a year later, down to the second lowest in the region, only slightly better than Russia, according to the 2022 Asan Institute for International Policy poll. In contrast, a vast majority (81.6 percent) of Koreans favour strong security ties with the United States, as revealed in the same Asan poll.

China-South Korea relations are at a critical juncture as both countries are facing significant economic and security challenges. Washington’s efforts in strengthening alliances and expanding partnerships to constrain China’s rise has raised the stakes for South Korea, which has for the past three decades adopted a dual-track approach to managing two of its most important relationships. While maintaining strong security ties with the United States, Seoul has equally pursued a China policy that allows it to expand economic ties and avoid choosing sides.

During his presidential election campaign, South Korean president Yoon Seok-youl expressed a strong vision of South Korea playing a more prominent role beyond the Peninsula as a ‘global pivotal state’ while seeking a relationship with China based on “mutual respect.” Since coming to office, the Yoon administration has joined the Indo-Pacific Economic Framework (IPEF) and expressed its interest in the US-led ‘Chip 4’ group containing major microchip manufacturers in the region. Seoul was also invited to form a partnership with the Quad and attended the NATO summit in Madrid in June 2022. These moves could be seen by Beijing as South Korea joining anti-China groupings despite Seoul’s protestation to the contrary.

At the same time, with a slim margin in winning the presidency, Yoon’s foreign policy will be influenced by domestic politics and economic priorities even as he seeks a greater role for South Korea. While advocating stronger ties with Washington through a ‘comprehensive strategic alliance’, Yoon continues to emphasize the importance of maintaining a stable relationship with China given the economic factors, albeit based on “mutual respect,” especially with regards to what Seoul considers to be its core national interests, including the issue of THAAD deployment.

Deep economic interdependence between China and South Korea, therefore, will factor into the Yoon administration’s policy toward China, even as there is a growing gap between the two countries in geostrategic and normative perspectives on issues ranging from regional security, democracy, and the US role in the Indo-Pacific.

Nearly a third of South Korean exports go to China, which in turn provides 24 percent of South Korea’s imports, including close to a quarter of the materials and equipment in the country’s semi-conductor industry. This may explain why Yoon chose to not meet US Speaker of the House Nancy Pelosi after her visit to Taiwan, a move that indicated how Seoul was trying to handle a sensitive issue in view of its broader implications for bilateral ties.

The 30th anniversary offers a good opportunity to take stock in reviewing both the positive developments and periodic setbacks. If the past can offer any hints for the future, careful management of disputes through dialogue and consultation have helped defuse crises. To deal with future challenges, Beijing and Seoul should be realistic in their expectations as significant differences exist that cannot be easily overcome but should be managed to mitigate spill-over into areas both sides value – stable and expanding economic ties, including negotiation of the second phase of the bilateral free trade agreement, peninsular peace, and stability.

Mutual respect

South Korea’s deepening alliance with the United States and its participation in numerous US-led regional security, economic, and technology groupings will stoke suspicions in China as Beijing becomes more active in seeking to form its own coalitions in an intensifying strategic rivalry with the United States.

Both Beijing and Seoul should recognize that their respective policy positions reflect and serve to advance their national interests. As a result, the principle of mutual respect can provide the floor for bilateral relations.

“Mutual respect” could become the litmus test in bilateral relations in the coming years. For China, “respect” is often associated with what it considers as its core interests such as sovereignty, Taiwan, and national security. In this sense, it is no surprise that Beijing views the “three noes” as a firm bilateral understanding if not a written agreement and pressures Seoul to abide by it. From Seoul’s perspective, “mutual respect” means Beijing should appreciate the rationale for and autonomy in making its own decisions regarding national security, and South Korea would not succumb to pressure and coercion.

In this regard, it is critical that the two countries mark the beginning of the fourth decade of relations with a strong bilateral commitment to keeping channels of high-level communication open to minimise misunderstanding and prevent any ‘surprises’. Indeed, “mutual respect” in practice should also commit the two sides to refrain from “scoring points” in publicising readouts to misinterpret or distort each other’s positions after bilateral consultation, especially when major differences exist.

A recent example is the Wang Yi-Park Jin meeting in Qingdao that was followed by open contentions over what the “three noes” really represent. Clearly, how to manage challenges like this will be key to nurturing and further expanding an important bilateral relationship crucial for regional peace and security, and economic prosperity.

About the Author

Jingdong Yuan is an associate professor at the University of Sydney and an associate senior fellow at Stockholm International Peace Research Institute. The opinions stated in this article are those of the author and do not represent the official position of APLN, its board or its members, nor that of the author’s affiliated institutions.

Image: Chinese President Xi Jinping’s lecture at Seoul National University, July 4, 2014 (Jeon Han, Gateway to Korea)