[EAI Special Report] To the Presidential Transition Committee's Foreign Affairs and National Security Team ③_Policy Toward China: Creating New Momentum for Cooperation

I. Assessment of the Current State of Korea-China Relations

Korea-China relations have achieved remarkable development over the 30 years since the establishment of diplomatic ties. However, there is an imbalance where the foundation and substance of the relationship have not been sufficiently solidified to match the relatively rapid external growth. During this process, external environmental structural changes have occurred, including China's faster and steeper rise than anticipated, the intensification of US-China competition, and North Korea's advancement of nuclear weapons. As a result, these changes have placed a significant burden on Korea, given its geopolitical specificities and divided situation, and on Korea-China relations. In other words, Korea-China relations, lacking a solid foundation and substance, have become vulnerable to the international system and environment, leading to fluctuations driven by external factors and failing to create new opportunities for relationship development. Consequently, policies toward China have increasingly tended to be influenced and altered by exogenous variables such as the North Korean nuclear issue, US-China relations, and policies toward the US and North Korea.

Korea-China relations face various challenges as they approach the 30th anniversary of diplomatic ties. Both major pillars that have served as the primary drivers and motivations for the development of bilateral relations—economic cooperation and the North Korean nuclear issue—are at a crossroads of change. Economic cooperation between Korea and China is entering a critical transition period due to the THAAD (Terminal High Altitude Area Defense) conflict, the COVID-19 pandemic, and the advancement and restructuring of China's industries. New drivers for cooperation that can replace existing economic cooperation methods have not yet been prepared between the two countries. Even in the North Korean (nuclear) issue, which has been the primary focus of South Korea's diplomacy toward China, strategic communication and understanding between the two countries are stagnating rather than progressing, following the successes and failures of the 2018 North Korea-US summit.

Notably, US-China relations are at their worst since the establishment of diplomatic ties, exacerbated by the COVID-19 pandemic. The Biden administration is emphasizing the role of alliances and cooperation with South Korea, effectively demanding its participation in containing China. In South Korea, resistance to China's influence and a leaning towards China is increasing, while in China, concerns and vigilance regarding South Korea's leaning towards the US are escalating, creating a contradictory situation.

Furthermore, the asymmetry in national power between the two countries is widening, along with a growing gap in systems and values. This leads to an expanding chasm in public perception and an increasing space for misunderstanding and distortion. The mutual negative sentiment between the peoples of Korea and China has historical and structural roots and shows potential for long-term continuation into future generations. In summary, Korea-China relations face the challenges of creating new momentum for economic cooperation at the bilateral level and managing the worsening negative sentiment between the two populations. Additionally, there is a need to redesign China's role in the North Korean and nuclear issues, and to manage the impact of US-China confrontation on the Korean Peninsula and the resulting escalation of conflict between the two countries. Consequently, policies toward China are expanding beyond political and security domains to encompass a wide range of areas, including economy, environment, science and technology, culture, and humanities. Therefore, there is a growing need for policies toward China to be planned and decided through close consultation and cooperation among various relevant government ministries, not just foreign affairs-related ones.

II. Problems and Tasks in Policy and Decision-Making Systems Toward China

First, the system and process for planning and devising policies and strategies toward China are inadequate. For the past 30 years since the establishment of diplomatic ties, successive governments have always emphasized the importance of policies toward China. However, examining the decision-making system, process, and content of these policies raises questions about whether they were actually treated with significant importance. It is difficult to ascertain that there was a system and process within the government for discussing, analyzing, planning, and deciding policies toward China as separate, independent agenda items. Policies toward China were typically addressed independently only when urgent bilateral issues arose or when major bilateral events, such as summit meetings, were scheduled. For instance, China-related policies were only independently addressed in a reactive manner to seek countermeasures when issues like China's Northeast Project or economic retaliation measures such as the Hallyu ban (限韩令) following the THAAD deployment occurred. Otherwise, policies toward China were generally handled in conjunction with or as subordinate areas to policies toward the US and North Korea. The Presidential National Security Office, which oversees foreign and security policy, has rarely had personnel with extensive experience in China-related affairs compared to those handling US or North Korean affairs.

Second, errors of optimistic assumptions and arbitrary judgments occur in policy-making toward China due to a lack of expert insight into China's specificities. Because China is a neighboring country with a long history of exchange with Korea, there is a general illusion of sufficient understanding of China. Consequently, policy errors frequently arise from optimistic assumptions based on generalities and arbitrary interpretations in policy-making toward China. For example, during the garlic dispute in 2001, it was not anticipated that China would impose excessive retaliation based on its domestic law, as the case was considered within the framework of a general trade dispute. Similarly, during the decision-making process for the THAAD deployment in 2016, the government arbitrarily judged that China would not engage in unreasonable economic retaliation over security issues because relations were good, and thus did not prepare adequate countermeasures. China possesses a unique system and cultural specificities, along with characteristics of a developing country that is constantly changing. Despite this, basic research and analysis of internal Chinese situations, which could serve as crucial data for policy-making toward China, are not sufficiently accumulated, nor are analytical materials actively utilized in policy decisions.

Third, policies toward China are discussed in a reactive rather than proactive manner. Policies toward China have tended to involve seeking emergency countermeasures reactively when problems arise and conflict situations occur. As China's importance in South Korean diplomacy grows daily, and human and material exchanges are most active in various areas between Korea and China, conflicts and friction also occur frequently. However, proactive policies and strategies are not prepared in a mid- to long-term perspective to prevent and manage these conflicts and clashes. As a result of policies toward China being handled in a short-term, reactive manner, various policy tools and leverage regarding China have not been prepared. The experience of the THAAD incident provides a lesson: facing China's retaliatory measures, South Korea effectively lacked realistic means and leverage to counter them. If the only leverage in diplomacy toward China is the strengthening of the ROK-US alliance, South Korea is highly likely to become more deeply entangled in the vortex of US-China competition, contrary to its intentions, in the current US-China confrontation scenario.

Fourth, the weight of North Korea, the North Korean nuclear issue, and unification in policies toward China is relatively excessive. It is no exaggeration to say that South Korea's diplomacy toward China has fundamentally fostered excessive expectations of China's role in the North Korean issue, based on economic cooperation. Consequently, the North Korean nuclear issue has overshadowed bilateral relations, leading to aspects where the substance of Korea-China relations themselves has been overlooked. In the process, the North Korean nuclear issue has remained unresolved, while expectations and dependence on China have become chronic. South Korea has few diplomatic and security cooperation agendas to discuss with China besides the North Korean nuclear and unification issues. However, both issues carry the risk of inducing strategic dependence on China and unintentionally drawing US-China competition into the Korean Peninsula.

Despite the significant problems in the policy-making and system toward China, the new government's policy pledges toward China do not reflect these concerns and problem awareness. No improvements or creative new alternatives for China policy-making and systems are presented; instead, there is a tendency towards maintaining the status quo or retrenchment. For example, the only policy pledge is to operate the cooperation mechanisms established by the previous government in a substantial manner. At a minimum, an analysis of the current state and causes of the failure of existing cooperation mechanisms over the past decade should have been conducted, and based on this, new revitalization plans or alternatives for the new government should have been presented.

III. Proposals for the New Government's Policy-Making System and Policy Tasks Toward China

1. Building Policy Tools and Leverage for Diplomacy Toward China and Establishing Mid- to Long-Term Strategies

Korea-China relations have accumulated various difficulties alongside compressed growth. In particular, the new government fundamentally prioritizes the rebuilding of the ROK-US alliance, and the Biden administration strongly urges its allies to participate in containing and pressuring China. In Korea-China relations, which have weak foundational strength, issues that have been suppressed are more likely to surface than ever before. In the short term, preparations are needed to anticipate and manage potential conflict situations with China. In the event of conflict with China, measures to secure means and leverage to induce changes in China's attitude, beyond strengthening the ROK-US alliance, need to be devised. In the long term, new strategic agendas that create incentives for China to cooperate with South Korea must be developed. Policy tools toward China need to be identified and built across various domains beyond politics and security, including economy, science and technology, environment, and culture. Considering the comprehensive nature of policies toward China, systematic cooperation mechanisms among government ministries need to be established to concretize methods for policy formulation through inter-ministerial coordination.

2. Seeking Ways to Influence "China's Role" by Strengthening South Korea's Role in the North Korean (Nuclear) Issue

Policies toward China are characterized by an excessive emphasis on North Korea and the North Korean nuclear issue. Indeed, South Korea-China relations have fluctuated according to changes in the South Korean government's policies toward North Korea. For example, the engagement policies of the Kim Dae-jung and Roh Moo-hyun administrations tended to align in principle with China's policy stance toward North Korea. In contrast, the shift to an pressure-oriented policy toward North Korea by the Lee Myung-bak and Park Geun-hye administrations created fissures between the two countries concerning the North Korean and nuclear issues.

A sober assessment of the existing "China's role" in Korean Peninsula issues, including the North Korean nuclear issue, is necessary. China's influence over North Korea undoubtedly exists, and China's role in seeking a solution to the North Korean nuclear issue is a reality that cannot be denied. However, the "China's role" that South Korea expects is not clear, nor are there sufficient means to elicit it. Consequently, when North Korea provokes, the discourse on China's role immediately arises, and if the expected role is not elicited, pressure is exerted on China through the argument of China's responsibility. If this is still ineffective, the traditional card of ROK-US-Japan security cooperation is played. This is followed by a vicious cycle of facing the reality of the "back door to China" again.

To elicit the "China's role" that South Korea expects, South Korea's own role must first be secured. In a situation where South Korea's role is weak, excessive expectations of China's role not only fail to help resolve the North Korean nuclear issue but also result in South Korea's diplomacy toward China becoming hostage to the North Korean nuclear issue. In the absence of South Korea's own plans and role, the pursuit of results within a five-year presidential term for mid- to long-term tasks such as denuclearization and unification has led to an increased reliance on "China's role," consequently transforming the North Korean nuclear issue into a tool for US-China competition. Therefore, it is necessary to redefine "China's role" by having the South Korean government take a more leading stance, present methodologies for resolving the North Korean nuclear issue, expand South Korea's role, and have China support and proactively cooperate with these efforts.

Furthermore, continuously emphasizing and pursuing trilateral cooperation among South Korea, the US, and China can be a gradual method for seeking South Korea's role. As consistent and unified messaging from the three countries to North Korea is the best way to resolve the North Korean nuclear issue, more proactive and active efforts by South Korea are needed to drive the trilateral cooperation framework. Expanding from trilateral dialogue to various minilateral dialogues such as Korea-China-Russia, Korea-China-Japan, and US-China-North Korea-South Korea would also contribute to preventing the "return of the Cold War" in Northeast Asia, characterized by ROK-US-Japan versus China-Russia dynamics. Therefore, despite practical difficulties, consistent efforts are needed to gradually and continuously build various communication channels, starting from a low level, where the three countries of South Korea, the US, and China can discuss all possible methods for resolving the North Korean nuclear issue.

3. Devising Policies Toward China Through Organic Integration and Unification with Strategies Toward the US and North Korea

As Korea-China relations have already evolved beyond the bilateral level to become vulnerable to the international structure and environment, diplomatic policies and strategies toward China must be designed and developed based on an organic and comprehensive review of the ROK-US alliance, Korea-Japan relations, inter-Korean relations, the North Korean nuclear issue, unification policy, and domestic political and economic situations. In other words, South Korea's diplomacy toward China is now faced with the situation of needing to conceive policies and strategies by considering the relationships among various actors, including the US, Japan, and North Korea, as a higher-order equation.

In particular, as the impact of the US-China "proxy competition" is likely to increase the number of issues requiring South Korea to make choices between the US and China, integrated policy formulation with US policy is essential when establishing policies and strategies toward China. Otherwise, South Korea is likely to be perceived as a country that consistently pursues a zigzag diplomacy amidst the US-China competition and confrontation, and may face even stronger pressure from both countries.

A "South Korean plan" must be established regarding key agendas directly related to the future of the Korean Peninsula, such as the role of the ROK-US alliance, the future of the North Korean regime, improvement of North Korea-US relations, a peace regime on the Korean Peninsula, and South Korea's standing in the international community. The direction of policies toward China must also be newly set in conjunction with this plan. Therefore, during the policy formulation process within each government ministry, specialized personnel capable of organically considering both the US and China and devising strategies must be trained and deployed, and a system must be established.

4. Establishing a Close Cooperation System Among Government, Corporations, and Experts in All Processes of Policy Formulation, Decision-Making, and Implementation Toward China

Considering the structural changes in the nature of Korea-China relations, the rapid advancement of China's industries, and the drastic changes in the international political and economic environment due to US-China strategic competition, a bold and swift adjustment to existing cooperation methods with China is necessary. New designs for establishing a new cooperation system with China suitable for the new domestic and external environment must be actively sought. To rapidly and systematically formulate comprehensive strategies toward China and explore response strategies, it is necessary to establish a comprehensive cooperation and response system toward China where practical and concrete communication and collaboration among government, corporations, and expert groups can take place on a regular basis. Competition between the US and China over cutting-edge science and technology and global value chains is intensifying, and cases where South Korean major corporations face pressure and choices in this process are increasing. Therefore, a system must be established that allows for prompt and close consultation between the business interests and judgments of corporations and the political decisions of the government on an ongoing basis.

Policy errors and confusion are occurring due to optimistic assumptions, arbitrary interpretations, misunderstandings, and distortions regarding China. Given the specificity and fluidity of China's system, it is becoming increasingly important to mobilize collective wisdom through the activation of a standing advisory function by expert groups for objective and in-depth understanding and interpretation of China. Furthermore, various response scenarios, manuals, and policy leverage are needed to efficiently and proactively prepare for crises and conflicts with China. To this end, it is necessary to establish a system where expert advice is institutionalized and regularized, and organic cooperation is achieved between policy practitioners and decision-makers. In other words, it is important to establish an environment and system where corporations, experts, policy practitioners, and decision-makers can continuously communicate and consult throughout the entire process of policy formulation, planning, decision-making, and implementation.

5. Establishing Permanent Communication and Consultation Bodies Between Korea-China Public Opinion Media to Promote Mutual Respect and Understanding

Mutual negative sentiment between the peoples of Korea and China has gradually and continuously worsened since the 2000s, when China's rise entered its main phase. A series of structural changes, including China's rapid rise, the intensification of US-China competition and confrontation, and the widening power gap between Korea and China, have influenced mutual perceptions between the two countries. If negative sentiment between the two countries becomes prolonged and structuralized in the future, Korea-China relations may deteriorate into a chronic conflict relationship, even weakening the motivation for relationship development. It is urgently necessary to face the complex and difficult reality confronting Korea-China relations and make efforts to analyze and understand the causes and background of the persistent mutual negative sentiment from multiple perspectives.

In particular, the spread of anti-China sentiment among South Korea's 20s and 30s generation, an unusual phenomenon, is rooted in concerns about ecological and environmental risks arising from relations with neighboring countries, such as fine dust, environmental pollution, infectious disease outbreaks, and illegal fishing. Therefore, based on the experience of COVID-19 quarantine cooperation between the two countries, efforts should be actively pursued to strengthen and systematize discussions and cooperation on trans-border issues such as air pollution, climate change, maritime safety, and infectious diseases. This should be seized as an opportunity to resolve mutual conflicts and negative perceptions between the two countries while simultaneously expanding areas of cooperation.

Furthermore, consensus must be built among the media and opinion leaders of both countries to acknowledge and actively manage the serious reality where negative sentiment between the peoples of Korea and China is worsening through interaction driven by structural factors. To this end, a permanent communication and consultation channel between the media and opinion leaders of both countries should be established to seek improvement measures through continuous monitoring of instances that mislead or distort public opinion. Additionally, governments of both countries, as part of public diplomacy initiatives, need to actively develop and promote sustainable exchange and cooperation programs, not one-off events, that can broaden mutual respect and understanding, particularly among the younger generation.

6. Developing Measures to Enhance the Substance and Systematization of Strategic Dialogues with China

There are two specific policy pledges regarding the new government's policies toward China. One is the robust operation and substantial functioning of existing cooperation mechanisms between Korea and China, and the other is the establishment of a high-level hotline between Korea and China. The intention to manage potential future unpredictable and complex conflict situations through cooperation mechanisms and a hotline, based on the judgment that such situations are highly likely, is desirable. However, the existing cooperation mechanisms mentioned in the pledges are understood to refer to the key strategic dialogues agreed upon during the summit meeting in 2013 under the Park Geun-hye administration. These include the high-level strategic dialogue between the National Security Advisor of the Presidential Office and the State Councilor in charge of foreign affairs of China, the regular mutual visits of foreign ministers, the expansion of vice-ministerial strategic dialogues to twice a year, and policy dialogues between political parties and joint strategic dialogues between think tanks.

However, most of these strategic dialogues have effectively ceased to function over the past decade and have not been conducted regularly as agreed. Therefore, to revitalize these cooperation mechanisms, a systematic diagnosis of the current situation and the reasons for their dysfunction must first be conducted, and complementary or improvement measures must be presented. Furthermore, although the proposal for establishing a high-level hotline has been raised several times and has even been established at the naval and air force levels, it has remained a symbolic device that does not actually function as a hotline. This proposal also requires the identification of the actual situation and causes, and the presentation of complementary measures that can effectively function in crisis response and conflict management.■

■ Author: Lee Dong-ryul_Director of the EAI China Research Center. Professor at Dongduk Women's University. He holds a Ph.D. in Political Science from Peking University's School of International Studies. He served as President of the Association for Modern Chinese Studies and is currently a policy advisor to the Ministry of Foreign Affairs. His main research areas include China's foreign relations, Chinese nationalism, and ethnic minority issues. His recent publications include "China's Strategy and Role in the Denuclearization and Peace Process on the Korean Peninsula," "Evolution and Current Implications of China's Foreign Policy Discourse Since the 1990s," "A Geoeconomic Approach and Geopolitical Dilemmas in Xi Jinping's 'Maritime Power' Ambition," "Deciphering China’s Security Intentions in Northeast Asia: A View from South Korea," and "Territorial Disputes of China" (co-authored).

■ Managed and Edited by: Lee Seung-yeon_EAI Researcher

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