China-South Korea ties enter new era as president-elect Yoon Suk-yeol signals a reset
- South Korean president-elect Yoon Suk-yeol is looking to reset relations with China and is likely to bolster ties with the US, a traditional security partner
- Analysts expect South Korea to join Washington’s Indo-Pacific trade framework and play a key role in a new US-centred supply chain
The election of conservative Yoon Suk-yeol as South Korea’s next president has raised questions over the future direction of relations between Seoul and Beijing, with the former prosecutor making clear he plans to strengthen trade and security ties with Washington.
Yoon has taken a harder stance on China than outgoing liberal president Moon Jae-in, who has placed considerable importance on ties with the world’s No 2 economy, both in terms of trade and its ability to help negotiate with North Korea.
China is by far South Korea’s largest trading partner, snapping up 25 per cent of Korea’s total exports in 2021, helping push bilateral trade to a record US$301.5 billion.
But the escalating rivalry between Beijing and Washington has posed a dilemma for Seoul, which must balance economic ties with China and its traditional security relationship with the US.
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“Considering that the Moon administration’s neutral stance did not result in practical benefits and taking into account the level of anti-China sentiment in Korea, it appears feasible that the new administration would keep a distance from China compared to the current administration and take gestures leaning toward the US,” said Moon Jong-chol, research fellow at the Korea Institute for Industrial Economics and Trade.
The deployment enraged Beijing, which responded with swift economic retribution against Seoul. China claims the American anti-ballistic missile defense system enables the US to spy on its territory.
Yoon claimed during his campaign that the Moon administration has been submissive towards Beijing, while promising an additional deployment of THAAD to counter attacks from Pyongyang.
The White House has been ramping up efforts to contain China’s technological development, putting Chinese tech giants such as Huawei Technologies Co. and Semiconductor Manufacturing International Corp (SMIC) on a trade backlist.
Chip sector investment by Chinese companies surges in 2021
After Yoon takes office in May, South Korea is expected to join the trade framework and play a key role in a new US-centred supply chain, given its strengths in producing semiconductors and EV batteries.
“Given Korean chip makers access US intellectual property and equipment in manufacturing semiconductors, which are the country’s key export item, Korea cannot disregard US moves to contain China’s tech sector,” said Moon, from the Korea Institute.
Yoon has signalled his administration will seek to reduce economic reliance on China and expand ties with Southeast Asia.
“The Moon government worked with the US to improve supply chain resilience, but mostly within the framework of the US-South Korea alliance at a bilateral level,” said Andrew Yeo, a senior fellow and the SK-Korea Foundation Chair in Korean Studies at the Brookings Institution’s Centre for East Asia Policy Studies.
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“I expect the Yoon government to continue economic cooperation with the US, but to also expand cooperation at a multilateral level with other US allies and partners in the Indo-Pacific that face similar supply chain issues.
“Supply chain resilience, digital governance and emerging technology issues are likely to be highlighted in the Indo-Pacific Economic Framework, which I anticipate South Korea will join, even as it pursues other multilateral trade agreements.”
China, meanwhile, has underscored the need to maintain solid ties, especially as the two countries mark the 30th anniversary of diplomatic relations this year.
