[2026 East Asian Institute (EAI) Conference on Diplomacy and North Korea Strategy: New Year Dialogue] III. Dual Strategy of Development and Security and Technocratic Governance: The Essence of the Grand National Strategy of the Xi Jinping Regime in China

YouTube link: https://www.youtube.com/watch?v=8cdgdbjKj6A

Video Script

It is a pleasure to meet you. First, what we must understand is that this year marks the 48th anniversary of China's reform and opening up, and it is nearing its 50th anniversary. China has experienced national crises every ten years, and each time there have been discussions of 'China's collapse' or 'China's danger.' The most recent crisis was the 'Peak China' theory, which swept the globe from 2023 to 2024, accompanied by theories of China's crisis. However, the outcome was different from expectations. China, which seemed like a weakened invalid after the COVID-19 pandemic, is emerging as a high-tech industrial nation. I have visited China eight times for international conferences and other events since COVID-19, and I have had the opportunity to see local areas and businesses firsthand. As an expert who has studied China for 40 years, I have seen China change significantly and rapidly, even with my own eyes.

I was surprised. Especially during President Xi Jinping's tenure over the past 10 to 13 years, China has presented a national strategy called 'The Chinese Dream,' and in line with this, has implemented the 13th and 14th Five-Year Plans, with the 15th Five-Year Plan set to commence next year. Furthermore, there have been three Party Congresses. The question I have received is, 'What on earth is China doing?' As I will explain later, despite the United States' efforts to contain China, China is not declining or collapsing; instead, it is directly confronting the U.S. and shows no signs of being intimidated. How is this possible? The reporting by major domestic media outlets does not explain this.

China's National Development Strategy and U.S. Containment

It does not explain it. Therefore, I will proceed by explaining China's current situation, specifically its national development strategy, which is the most crucial aspect. Notably, President Xi Jinping's national development strategy was premised on U.S. containment from the outset. Although the Xi Jinping administration took office in 2012, the Obama administration, which emerged in 2009, had already clearly articulated a policy of containing China. It simply failed to implement it. Therefore, China's national development strategy implicitly includes a strategy for responding to the U.S. Based on this, I will discuss China's policies toward the Korean Peninsula. First, who are the people currently leading China? For convenience, we can categorize Chinese leaders into the first generation centered around Mao Zedong, who succeeded in the socialist revolution and founded China. They are evaluated as having succeeded in the revolution but failed to achieve the goal of making the nation prosperous and strong.

The second generation, Deng Xiaoping, achieved national prosperity and strength. The third and fourth generations, Jiang Zemin and Hu Jintao, were groomed for the second generation. After them came the Xi Jinping era. Originally, according to the existing norms of reform and opening up, the fifth-generation leadership should have succeeded the sixth-generation leadership at the 20th Party Congress three years ago, but this did not happen. This is commonly referred to as Xi Jinping's 'third term as General Secretary.' Let's look at the statistics.

Currently, China's ruling elite can be broadly divided into national-level leaders and ministerial-level leaders. National-level leaders refer to the seven members of the Politburo Standing Committee. Among them, six were born in the 1950s, and only one, Ding Xuexiang, was born in the 1960s. This means that the current leadership of China is dominated by the fifth generation. However, the situation is different for ministerial-level leaders (ministerial-level central government officials or Party secretaries and governors of 31 provinces). As the statistics show, most of them have been replaced. While the Politburo (including the Politburo Standing Committee) has a majority of the fifth generation, a considerable number of the sixth generation are also included. Therefore, it can be said that China's current ruling elite is led by the fifth generation at the highest positions, while the ministerial-level officials, who are the primary implementers, have already been replaced by the sixth generation. In other words, it is not an exaggeration to define it as an integrated system of the fifth and sixth generations.

Characteristics of the Fifth-Generation Ruling Elite and the Xi Jinping Era

For reference, those born in the 1970s currently constitute about 40% of vice-ministerial level officials. A significant number of them will be promoted to ministerial level at the 21st Party Congress to be held in two years. While it may appear that the leadership transition has not occurred with President Xi Jinping alone, this is not the case. Only the Politburo Standing Committee remains the same; at the ministerial level, it is accurate to consider it a replacement from the fifth to the sixth generation. However, the crucial factor is who the rulers are. Therefore, we must examine the characteristics of the fifth-generation leaders. What I am discussing now is not the characteristics of Xi Jinping personally, but of the fifth-generation group. Academics define them as those born in the 1950s. They were born after the founding of the People's Republic of China in 1949 and have no direct connection to the revolution. They experienced the Cultural Revolution and keenly felt the realities of China. After Mao Zedong's death, the university system was revived, and they began their studies, completing their university education during the reform and opening-up period. From the early 1980s,

These are individuals who rose through the ranks, experiencing China's reform and opening-up policy from the lower echelons. This is a common characteristic of the ruling elite currently leading China. While distant from the revolution, they possess considerable pride as leaders of reform and opening-up. They have a strong sense of pride in 'what I have done since I was young.' Furthermore, while the Jiang Zemin and Hu Jintao generations were technocrats, this generation primarily consists of leaders from humanities, social sciences, and natural sciences.

Their tendencies are clearly reflected in President Xi Jinping. When President Xi Jinping was elected General Secretary at the 18th Party Congress in 2012, some domestic and international media outlets speculated that he might become China's Gorbachev. This was because Xi Zhongxun, President Xi's father, was a reformist figure who established special economic zones during his tenure as the Guangdong Provincial Party Secretary. He is one of the most respected revolutionary leaders in China.

He was a person who always chose principles over power, money, and fame. He lived a very difficult life, and there were expectations that Xi Jinping, being Xi Zhongxun's son, would bring significant change. Moreover, President Xi Jinping had a reputation for business-friendly leadership, having risen through the ranks in key reform and opening-up regions such as Fujian, Zhejiang, and Shanghai. Thus, it was anticipated that his ascendancy to power would bring about tremendous changes in China. However, I disagreed with that prediction.

What has actually emerged is evident in his brief speech upon his initial election to the Politburo Standing Committee, which outlines his political direction. It is 'Nation, People, Communist Party.' While his economic policies might be uncertain, politically, he was conservative from the outset. Later, the economic policies themselves followed the political direction, becoming more conservative. 2020 was a very significant year. It was significant not because of COVID-19, but because the fundamental policy of the Communist Party of China changed. That is to say,

Fundamental Change in the CPC's Policy and Simultaneous Consideration of Economy and Security

The principle Deng Xiaoping put forth when initiating reform and opening-up in 1978 was the 'priority strategy of economic development.' Everything, including diplomacy and military affairs, was to contribute to this. However, as of 2020, this has shifted to a 'strategy of simultaneous consideration of common development and security.' In other words, economic growth, national security, and the maintenance of the Communist Party's rule are considered equally important. Consequently, domestic and foreign policies have begun to change. In terms of foreign policy, 'Wolf Warrior Diplomacy' is a prime example. Since then, diplomats have become more aggressive. Domestically, the most important factor at this time is

This is the halt of real estate stimulus measures. It signifies a shift away from prioritizing economic development and growth stimulation exclusively. The collapse of private real estate companies, exemplified by the Evergrande Group crisis in 2021, and the subsequent real estate market downturn were predictable outcomes of a change in national strategy, not unavoidable circumstances. This reduction is the correct choice. If one were to identify the most crucial policy during President Xi Jinping's ten-year tenure, it would be 'the Party's overall leadership.' There are no exceptions to the Party's leadership in all matters, and private enterprises are not exempt.

This continues to the present day. This is their disposition. Another point to consider is that even if power succession occurs at the 21st Party Congress in two years, leading to the emergence of the sixth-generation leadership, this policy will not change. This is not Xi Jinping's personal agenda but a consensus of the Party collective, and it will not be easily altered. Just as President Trump of the United States stepped down, could the disposition of future US presidents return to the past? I think not.

Since the 2000s, there has been a global trend of democratic backsliding. When democratic backsliding occurs, two phenomena become prominent. In international politics, values no longer hold significance. Freedoms and human rights cease to matter; only national interest and power are important. Similarly, in domestic politics, strongman leadership emerges. Weak or indecisive politics cannot be elected. Look at Russia or Turkey. Strongman politics has already begun.

The Great Rejuvenation of the Chinese Nation and the Second Stage Development Goal

This phenomenon began in 2000. It is the Trump phenomenon in the United States and the Xi Jinping phenomenon in China. Therefore, regardless of who becomes president in the US, it is difficult for the situation to revert to the past, and similarly, even if power shifts from the fifth to the sixth generation in China, this policy direction will likely continue. This is particularly relevant to what some are discussing regarding national strategy. To reiterate, this has continued, and through the 18th, 19th, and 20th Party Congresses, a new national development goal of the 'great rejuvenation of the Chinese nation' has been pursued. You have all heard of this.

The first stage has already been completed. They claim to have eradicated absolute poverty. The second stage, and the words in quotation marks are expressions used in China, while the following are interpretations by scholars, aims to raise the per capita GDP to approximately $25,000 by 2035. Last year (2024), the per capita GDP was $13,000, and the goal is to increase it to $25,000. For reference, view such statistics as indicators of trends. China experts analyze China as 'One China, Three Worlds.' Although China is one entity, it is actually composed of three worlds.

The coastal regions bordering the sea constitute the First World. The most affluent area within the First World is Shanghai, with a population of 25 million and a per capita GDP of $30,000. The second most affluent metropolitan area is Shenzhen, with a per capita GDP of $29,500. Beijing's is approximately $26,000. In any case, this region comprises about 300 to 400 million people, and their per capita GDP has already surpassed $20,000. This region has already achieved the second stage of development goals. However, the Second World, the intermediate region, which constitutes the majority, has a population of about 700 million and a per capita GDP of around $15,000. The Third World in the west, including regions inhabited by ethnic minorities, has an average per capita GDP of $5,000 to $6,000. Therefore, the second stage development strategy aims to transform the entirety of China into what the First World is currently. Is this possible within ten years? Time is running out. The final stage is what they intend to achieve. This can be characterized as a typical national development strategy with strong nationalist tendencies. Some argue that achieving these goals requires political stability, and thus, problems may arise. In conclusion, such problems do not exist. Speculation about President Xi Jinping's downfall has not gained traction, not even in the United States, Japan, or Taiwan.

This has been widely discussed by YouTubers but was only reported by major South Korean media outlets. This is not a global phenomenon. To be precise, major US media outlets have never published critical reports on China, and the same applies to major Japanese newspapers. Only South Korea differs. I consider this not mere curiosity but an intentional information warfare or propaganda campaign orchestrated by specific forces. In any case, President Xi Jinping's resignation was not illegal; it was carried out through legitimate procedures, and there are no forces to veto or oppose it. However, there are potential issues arising from his third consecutive term in power. I wrote this paper, and it is scheduled for publication soon. There are two possibilities. First, policy flexibility may decrease. China's leadership at the central and local levels has been replaced every ten years. The newly emerging leadership could inherit successful policies from the previous administration while revising unsuccessful ones. This was the potential for China's innovation-driven strategy. However, this has now changed. This could lead to problems.

In conclusion, some perspectives suggest that policy flexibility is maintained, posing no significant issues. In other words, flawed policies are continuously being revised. Second, this is still an ongoing issue: President Xi Jinping has broken the norms of power succession established by revolutionary elders like Deng Xiaoping.

Then, the newly emerging leadership can inherit successful policies from the past without burden and revise unsuccessful ones. This is what has been done continuously. This is why China's innovation-driven strategy was possible. However, this has not changed. This is where problems may arise. In conclusion, depending on the analysis, China's policy flexibility is maintained, posing no major issues, meaning flawed policies are continuously being revised. Second, this is not yet over, but Xi Jinping has broken the norms of power succession established by the revolutionary elders.

The absence of established power norms does not necessarily imply problems within elite politics. For reference, elite politics, which first emerged in Vietnam, was later adopted by China four to five years later. The election of the General Secretary of the Communist Party of Vietnam, Nguyen Phu Trong, was initially based on popularity, with anti-corruption being the foundation of that popularity. The 14th Party Congress will be held in Beijing next year, followed by the 21st Party Congress in China the year after. Therefore, we can observe examples of what happens at the Vietnamese Party Congress influencing China shortly thereafter.

Perception of the US-China Hegemonic Struggle and China's Response Strategy

Next, I will discuss China's national development strategies and its countermeasures against the United States within that framework. Fundamentally, China views the US containment policy differently from how the US perceives it. In conclusion, China believes this is not a trade war or a technology war, but a hegemonic struggle. The reason is as follows: China did not challenge the US while the US remained passive. Approximately 80% of the policies China is currently implementing were decided at the 16th Party Congress during Hu Jintao's administration in 2002. In my judgment, Xi Jinping's administration has changed no more than 20% of these policies. In other words, China has followed its own path. However, the US acted differently. After the 9/11 terrorist attacks in 2001, the US was preoccupied with the War on Terror for nearly a decade. During this period, China pursued an innovation-driven development strategy domestically and consistently implemented policies to support neighboring countries and developing nations externally. During President Hu Jintao's tenure,

the US recognized the gravity of the situation. This led to the emergence of the term 'Pivot to Asia,' which eventually evolved into a rebalancing strategy but was not implemented. Economic policies targeting China began at that time. Although the policy was announced, it was not implemented due to the severe domestic situation in the US following the 2008 financial crisis. While focusing on domestic recovery, policies like Obamacare were developed, which became a core issue in the recent shutdown crisis. Meaningful containment began during the Trump administration, but the methodology was flawed. In my view, genuine containment is being implemented by the Joe Biden administration. However, a change of administration is approaching. Therefore, China has no intention of succumbing to US pressure and is prepared to fight back. This is the fundamental perception.

This was officially presented at the 20th National Congress of the Communist Party of China three years ago and is highly significant. Its importance stems from China being a revolutionary state, much like North Korea. Reports from North Korea and China share commonalities. They begin with an analysis of the current situation. Just as Professor Park Hoon started his presentation with an analysis of the global geopolitical landscape, China does the same. Policies are then derived from this analysis. This has changed. Around the time Deng Xiaoping initiated reform and opening-up in 1978, it was possible because he altered Mao Zedong's perception of the international situation. Mao Zedong believed the global situation was an era of revolution and war. That is, he thought the US or the Soviet Union could attack China, so China needed to prepare for war. He also viewed it as an era of revolution, leading to the Cultural Revolution domestically and supporting the Third World internationally. Under this perception of the international situation as an era of war and revolution, reform and opening-up were impossible. Deng Xiaoping broke from this, arguing that it was no longer an era of war but an era of peace. He believed that since China possessed nuclear weapons, no one could attack it. Second, he viewed it not as an era of revolution but as an era of development where countries pursued their own growth. This was a crucial shift. The Cold War ended with the collapse of the Soviet Union in 1991, but this perception was established more than a decade earlier. Therefore, the international situation was seen as an era of peace and development, and based on this, economic development was achieved for 40 years. However, this perception changed at the 20th Party Congress. It shifted to viewing the situation not as a period of strategic opportunities but as an era where opportunities and crises coexist. Where is the emphasis placed? On crises.

Crises. While the COVID-19 pandemic is a factor, the fundamental assessment is that China must undergo a complete transformation and upgrade. The easy reforms are already complete; the remaining reforms are extremely difficult, and failure to succeed means the end. Externally, it is viewed as an era of historical, comprehensive change. This is due to conflicts arising from the hegemonic behavior of certain forces centered around the US, which aim to prevent the rise of developing countries, with China at the forefront.

China's Political Strategy: Changes in Ruling Elite and Military Reform

In response, China has declared a comprehensive struggle domestically and a struggle externally. The term 'struggle' appears most frequently in China's political documents at the 20th Party Congress. This perception began three years ago, long before Trump's presidency. This is the perception of the situation. Now, let's delve into the specifics. Through what national development strategy will China confront the US? While the content is extensive, I have selected only one point for each section for brevity. Firstly, within political strategy, the most crucial aspect is the ongoing change in China's ruling elite. What does this mean?

The successful implementation of reform and opening-up in China is often attributed to the correctness of its strategic line. I only partially agree with this. I believe the reason why reform and opening-up could be sustained despite immense challenges like the Tiananmen Square incident in 1989 and the collapse of the Soviet Union in 1991 was due to the political elite. China's reform and opening-up were fundamentally driven by the correct guidance from elders centered around Deng Xiaoping and the deep cultivation of practical leaders at the vice-ministerial and ministerial levels who could implement these directives. From 1981 to 1986, 1.4 million existing Party and government officials were purged, and 460,000 new cadres were extensively appointed. These individuals rose from director-general to vice-ministerial and ministerial levels, becoming the core personnel of China in the 1990s. They saw their interests as aligned with reform and opening-up.

They believed that if reform and opening-up failed, they would also be finished. These were the technocrats. There are three criteria for classifying technocrats in academia. First, they must have obtained an undergraduate degree in science or engineering. Second, they must have worked for at least 10 years in a professional capacity as an engineer. Third, they must have been selected as Party or government officials and risen to a ministerial position. Individuals who meet these three criteria are called technocrats. Xi Jinping does not fit this category. Although he graduated with a degree in Chemical Engineering from Tsinghua University, he has no experience working in a professional capacity.

Therefore, although he is an engineering graduate, he cannot be considered a technocrat. His highest academic degree is a Ph.D. in Law from Tsinghua University. In human history, there has never been a country with over a billion people ruled by technocrats for 20 years. Their remarkable economic growth was a significant driving force for China's development. They were not revolutionaries but experts in their respective fields. In 1982, only one of the State Council's central ministers was a technocrat. However, by the early period of Jiang Zemin's administration in 1997, over 70% of ministers were technocrats. Provincial leaders, equivalent to governors in South Korea, are called provincial leaders in China, and over 70% of them were also members of the Central Committee. This is because 20% of Central Committee members are active generals. Excluding active generals, the ratio is similar.

These individuals spearheaded remarkable economic growth. Under the Xi Jinping administration, this trend has been further strengthened. In Chinese terminology, individuals from high-level professional and technical positions now constitute the majority of the Central Committee members, accounting for approximately 50%. Among the 13 newly appointed Politburo members, six hold Ph.D. degrees in various fields such as aerospace and environmental science. Let's look at other statistics. Although there are slight variations in calculation, 66% of provincial leaders during Jiang Zemin's era were technocrats. During Xi Jinping's administration, at the 18th Party Congress, this proportion decreased, not due to Xi Jinping's appointments but due to the influence of the previous leadership. However, it has steadily increased since then, reaching the 40% range by the 20th Party Congress. Do you understand what this signifies? In the US-China confrontation, the most crucial factor is the identity of the ministerial-level leaders.

It is a question of who will win. Ultimately, it is an economic competition, and economic competition depends on the ability to understand science, technology, and cutting-edge industries. To simplify the report's content, there is a significant difference between leaders who can freely use technical jargon in official meetings and those who cannot. Who will win? Who will win in the long term? From a political strategy perspective, I believe this is China's most important strategy. Now, let's move on to economic strategy. Dr. Jeon Byung will explain this in detail, so I will only outline the broad strokes.

China's Economic Strategy: Fostering High-Tech Industries and Establishing an Innovation System

China's economic development strategy can be broadly divided into three phases. The initial 24 years, during the Deng Xiaoping era, were characterized by economic development fundamentalism. This was natural, as China's per capita GDP was $150 when it began reform and opening-up in 1978. India's was $250 at the time. With a per capita income of $150, survival was the priority, so all efforts were concentrated on economic development. This continued for 24 years. However, any country concentrating all its efforts on economic development for 24 years is bound to experience side effects. These include deepening regional imbalances, widening income gaps between social strata, and intensifying environmental degradation and resource waste. The recognition that change was needed to address these issues emerged. After Hu Jintao came to power, it was officially declared that the transition would be from quantitative to qualitative growth, expressed in the 'Scientific Outlook on Development' during his era. This implied that the previous development approach was unscientific.

The declaration was to develop scientifically moving forward, but the outcome was the opposite. The average annual growth rate over the decade was 10.6%. Do you know why this happened? At that time, Chinese policymakers set the appropriate growth rate at 7%. However, the actual growth rate exceeded 10%. You will soon understand. There was the global financial crisis originating in the US in 2008. China's trade surplus ratio was in the 70% range then, but it is now in the 30% range. As the financial crisis spread from the US and Europe, China entered a recession for over three years, necessitating stimulus measures. Aggressive fiscal policies and quantitative easing by banks totaling 4 trillion yuan, followed by 8 trillion yuan, a total of 12 trillion yuan, were injected. Calculated at current exchange rates, this amounts to 2,400 trillion won.

Where did this enormous amount of capital go? As you know, it flowed into real estate. Apartment prices rose, and in preparation for the 2008 Beijing Olympics, the city of Beijing was redeveloped, and social overhead capital infrastructure was built in surrounding cities. Additionally, astronomical sums were invested in the reconstruction efforts following the 2008 Sichuan earthquake, leading to infrastructure expansion. The massive capital investment has caused ongoing difficulties for China to this day. In any case, these efforts failed, and after five years of exploration following the launch of the Xi Jinping administration, the development direction was clarified at the 20th Party Congress. There are two aspects.

One is the strategy of fostering high-tech industries, and the other is the strategy of establishing an innovation system for the development of high-tech industries. The most crucial element is talent cultivation. You are well aware that this has begun and has achieved great success. Most recently, last year, approximately 1.5 trillion yuan (300 trillion won) was established as a semiconductor fund, and in May last year, a 1 trillion yuan (200 trillion won) AI startup fund was created. South Korea is mentioning 10 trillion won in this regard. However, this did not suddenly begin under the Xi Jinping administration. What constitutes present-day China is a strategy that has been in place for 30 years. While researching China's politics and diplomacy, I have also examined its policies, and China's first innovation-driven development strategy was formulated in 1996.

The term used at the time was the 'Science and Technology Nation Strategy,' aiming to revitalize the nation through science and technology. This was officially announced. When China implements important policies, it does not do so nationwide immediately but tests them in selected regions. Three locations were chosen: first, Zhongguancun in Beijing, known as China's Silicon Valley, with a high concentration of universities. Second, Shanghai, and third, Shenzhen. The core content involved investment. After achieving success in areas like venture capital fund formation, it was piloted for about ten years before being expanded nationwide. The content involved establishing venture towns and providing financial support in cities with populations of 2 to 3 million or more. This also proved to be a great success.

Ten years later, this was integrated and announced as the 'Made in China 2025' strategy for fostering high-tech industries. This strategy concluded last year and may or may not be announced at this year's National People's Congress. Following the announcement of this strategy, trade friction with the United States occurred, but it is clear that the strategy was already in place. More importantly, high-tech industries do not materialize out of thin air; they require people. To this end, the 'Project 211,' which selected 100 universities for cultivating talent in the 21st century, was initiated. Judging this to be too many, it was scaled down to 'Project 985,' selecting about 30 universities. Massive funds were invested in these universities through this project, which began in May 1998. For reference, China has 3,700, or perhaps 3,300, universities. Among these, about 30 universities, such as Peking University and Tsinghua University, one in each province, received substantial funding for talent development. Recognizing the limitations of domestic cultivation, they began attracting overseas talent. This program, commonly known as the 'Thousand Talents Plan,' was originally titled the 'National Strategy for Recruiting High-Level Overseas Experts in Advanced Fields.' Approximately 7,000 talents were recruited, including individuals of Nobel Prize caliber. This enabled China to no longer need to send students abroad for science and engineering studies and to build the world's leading innovation system. This has been a 30-year endeavor. Except for Huawei, all of China's major tech companies were established after 1996. Why did China do this? It's simple: to maintain the Communist Party's power. In 1999

China's Diplomatic Strategy: Global South Diplomacy and Network Building

As China's university policies changed, enrollment quotas increased by 500,000 students annually. As a result, by 2010, 5 million university graduates were produced each year. Did you see the number of graduates last August? Newspapers reported that 12 million graduates were produced. If these graduates cannot be absorbed, maintaining the regime becomes difficult. Therefore, the focus shifted to entrepreneurship in innovative fields and the development of the service sector. Consequently, before COVID-19, 15,000 venture companies were established annually, and over 6.5 million jobs were created in these sectors. This is the driving force behind present-day China. Now, let's move on to diplomacy. China's diplomacy can be broadly categorized into five areas. The most significant characteristic of the Xi Jinping administration's ten-year diplomatic strategy is the integration of diplomacy with neighboring countries and developing countries as a response to the US, which can be termed 'Global South Diplomacy.' This is the most prominent feature. An example illustrating this is the first-ever conference on diplomacy with neighboring countries in China's history, held in 2013, the first year of Xi Jinping's presidency. And at that time, we

China's economic development strategy can be broadly divided into three phases. The initial 24 years, during the Deng Xiaoping era, were characterized by economic development fundamentalism. This was natural, as China's per capita GDP was $150 when it began reform and opening-up in 1978. India's was $250 at the time. With a per capita income of $150, survival was the priority, so all efforts were concentrated on economic development. This continued for 24 years. However, any country concentrating all its efforts on economic development for 24 years is bound to experience side effects. These include deepening regional imbalances, widening income gaps between social strata, and intensifying environmental degradation and resource waste. The recognition that change was needed to address these issues emerged. After Hu Jintao came to power, it was officially declared that the transition would be from quantitative to qualitative growth, expressed in the 'Scientific Outlook on Development' during his era. This implied that the previous development approach was unscientific.

The declaration was to develop scientifically moving forward, but the outcome was the opposite. The average annual growth rate over the decade was 10.6%. Do you know why this happened? At that time, Chinese policymakers set the appropriate growth rate at 7%. However, the actual growth rate exceeded 10%. You will soon understand. There was the global financial crisis originating in the US in 2008. China's trade surplus ratio was in the 70% range then, but it is now in the 30% range. As the financial crisis spread from the US and Europe, China entered a recession for over three years, necessitating stimulus measures. Aggressive fiscal policies and quantitative easing by banks totaling 4 trillion yuan, followed by 8 trillion yuan, a total of 12 trillion yuan, were injected. Calculated at current exchange rates, this amounts to 2,400 trillion won.

You've heard of it, right? The Belt and Road Initiative, and the New Southern Policy as a countermeasure to US alliances. China criticized the US's alliance-centric diplomacy based on Cold War mentality, advocating for a 'Community of Shared Future for Mankind.' This statement by President Xi Jinping in 2013 contrasted with the US-centric value-based diplomacy. This diplomacy has expanded from great powers to regional diplomacy, and further to the Global South. This has been pursued consistently.

As a result, BRICS, a gathering of leaders from developing countries across continents, was launched. Initially starting with five countries, it now includes ten member states, and China is leading it. Furthermore, to the north and west of China lies the Shanghai Cooperation Organization (SCO). Initially starting with six countries, it now has ten member states, and including observers, it comprises 19 countries. To the south, there is the Association of Southeast Asian Nations (ASEAN), but this has been transformed into a China-centric version. In this manner, China has consistently pursued a strategy of securing allies among developing countries for the past 20 years, since the Hu Jintao era. China's assessment is clear: no matter what China does, the G7 will not side with China.

This strategy has been successful, and it has not been achieved merely through rhetoric. Ultimately, money had to be spent. This is the essence of the Belt and Road Initiative. The Belt and Road Initiative is not a strategy for resource development or the construction of airports in other countries. Its core is a connectivity strategy. It aims to build a network centered around China. For example, high-speed rail is being used for connectivity. For reference, China's high-speed rail network spans 40,000 km, involving hundreds of thousands of engineers and substantial equipment.

Furthermore, the 5G communication network is led by Huawei, and services similar to GPS are provided through the BeiDou satellite navigation system. As countries felt uneasy due to US sanctions, China encouraged the use of the yuan as a medium of exchange. In this way, a global network has been established, and it is currently showing results. On January 20 last year, when the US imposed large-scale tariffs on China, China's exports to the US decreased by 15%. However, total exports actually increased, and the trade surplus surpassed $1 trillion as of November last year.

While celebrating South Korea's total exports exceeding $700 billion last year, China's trade surplus alone surpassed $1 trillion by November last year. Despite a significant decrease in exports to the US, these results were offset by an increase in trade surplus from other regions. Therefore, China does not fear trade conflicts with the US. In my view, even if China's exports to the US decrease by 10%, it will not have a significant impact on the Chinese economy. Strategically speaking. This meeting was also held last spring, and it continues to be held. This is the result of diplomacy centered on developing countries. While Korean media reports on the non-participation of developed countries, China does not pay much attention to this. These are primarily the outcomes of diplomacy focused on developing countries.

China's Military Strategy and Nuclear Strategy Changes

Next, let's move on to the military sector. China places great importance on safeguarding its core interests. Previously, Xinjiang, Tibet, and Taiwan were considered core interests, but changes occurred in 2007 and 2008. The reason for this was that amidst the chaos of the US-originated financial crisis, the Chinese leadership judged that the West was in decline while China was on the rise. Consequently, core interests were officially defined as sovereignty, security, and development interests. It is regrettable that all these areas are concentrated in East Asia.

In February 2022, Russia invaded Ukraine, and just three days prior, the US attacked Venezuela. In a situation where two of the world's most powerful nations are in conflict, the next most powerful nation is China. However, China feels uneasy about four potential threat areas: Taiwan, the South China Sea, the East China Sea, and the Korean Peninsula. How to protect these regions is China's fundamental strategy. Accordingly, China has already been pursuing the modernization of the People's Liberation Army since the 19th Party Congress. The first phase, which is often misunderstood, is not about attacking Taiwan but about developing the capability to militarily occupy Taiwan.

In my judgment, China's military strategy is not fundamentally about advancing into the Pacific to confront the US. That is not a realistic strategy. This is because the US defense budget is $1 trillion, while China's is only $300 billion. To compete with the US in the Pacific by 2050, defense spending must continue to increase, which is unrealistic.

China is not like that. In my judgment, it is a strategy of partial hegemony, aiming to dominate East Asia, or more broadly, the entire Asian region. There are various aspects related to this, but I will introduce only one: military reform. This is very important. Looking at the basic command structure before the reform, anyone who has had even a little experience in social life will quickly recognize the problems. The only link connecting the Communist Party of China and the People's Liberation Army is the Chairman of the Central Military Commission, who is Xi Jinping, a civilian.

During the Mao Zedong and Deng Xiaoping eras, such problems did not exist. As they were military men, they could command the military through charisma and leadership. However, the situation is different in the eras of Jiang Zemin, Hu Jintao, and Xi Jinping. First, will this civilian leadership extend down to the lower echelons? The key departments, known as the 'Four General Departments,' are dominated by active military personnel; will they obey civilian directives? Will reports from within the military be properly submitted?

Reports are not properly submitted. This was a serious problem during Hu Jintao's tenure. Third, the Four General Departments and the Four Major Military Branches are all army-centric. Is an army-centric military effective in modern warfare? Fourth, there is no joint operational system. This is despite the necessity of combined army, navy, and air force operations. With such a structure, it is impossible to compete with the US. Although Jiang Zemin attempted military reform in 2000, it was abandoned after six months due to strong military opposition. Xi Jinping has revived this initiative. I believe that among the Xi Jinping administration's foreign strategies, the most successful is the Belt and Road Initiative, and domestically, it is military reform.

This reform is a matter of life and death. During Xi Jinping's 13-year tenure, 120 generals were punished. Xi Jinping is now pushing reforms at the risk of his life. The reform details are as follows: First, the four general departments have been reorganized into 15 staff organizations, allowing Xi Jinping's orders to be directly transmitted to regional and service branches. Organizations hindering communication have been eliminated. Second, the seven military regions that divided China have been reorganized into five theater commands, enabling joint operations across land, sea, and air. Third, the four general departments have been expanded into four military services and four arms, increasing the total to eight.

specialized branches. The fourth and final point is that Xi Jinping's status has changed. Previously, as Chairman of the Central Military Commission, he wore a People's Liberation Army uniform; now, he wears a combat uniform. This signifies the elevated status of the newly established Joint Staff Department, the operational command body. As Chairman of the Joint Staff Department, he appears in military attire. This is unprecedented and represents a completely new system. Through this, Xi Jinping's command authority over the military has been solidified, demonstrating his unwavering resolve for military reform.

Most China experts agree with this analysis. Furthermore, China has become the first country in the world to establish a system capable of operating an aircraft carrier strike group. Three carrier strike groups must operate in concert, and China has already achieved this. Aircraft carriers No. 4, 5, and 6 are under construction, and a nuclear-powered aircraft carrier is expected by 2035. Next, it is crucial to note that China's nuclear strategy was altered at the 20th Party Congress. In fact, it had been changing for several years, and its official announcement is significant. Have you ever wondered why mentions of the North Korean nuclear issue have decreased in recent years? Frankly, only South Korea and Japan currently mention the North Korean nuclear issue. This is directly related to the matter at hand.

China has stated its intention to possess 'strong strategic deterrence capabilities.' This signifies a shift from the existing 'minimum deterrence strategy' to a 'maximum deterrence strategy.' The number of nuclear weapons is increasing exponentially from 300. In contrast, Russia and the United States are already employing a maximum deterrence strategy. According to a U.S. Department of Defense report, nuclear warheads are projected to increase by 100 annually, reaching approximately 1,000 by 2030. There are two reasons for China's strategic shift. First, the judgment that to become a global power, military strength must also keep pace. Just as Russia's military strategy has shifted from conventional weapons to nuclear weapons, China must compete with the United States through nuclear weapons. Second, the decision to deploy THAAD in 2016 had a significant impact. China's concerns about the establishment of missile defense systems have grown.

In response, China has chosen a strategy of significantly increasing its nuclear arsenal. The Russia-Ukraine war in February 2022 accelerated this strategy. NATO and the United States provide weapons to Ukraine but cannot deploy troops, as President Putin has hinted at the possibility of using nuclear weapons. Russia is even conducting tactical nuclear drills. China is mirroring this precisely. I find this deeply concerning. Until now, the situation has been relatively calm because North Korea and China have not actively participated in a nuclear arms race with the United States, but that has now changed. This is also stipulated in China's Defense White Paper and the 15th Five-Year Plan.

Changes in China's Policy Toward the Korean Peninsula and Nuclear State Status

Denuclearization of the Korean Peninsula is no longer a policy objective for China. For reference, the last time China used the phrase 'denuclearization of the Korean Peninsula' was at the trilateral summit between South Korea, China, and Japan in May 2024. At that time, Chinese Premier Li Qiang attended, and the joint statement specified that 'regional stability and prosperity, denuclearization of the Korean Peninsula, and the abduction issue' were emphasized, respectively. This implies that China emphasized regional peace and stability, South Korea emphasized denuclearization of the Korean Peninsula, and Japan emphasized the abduction issue. Since then, to my knowledge, China has not used the phrase 'denuclearization of the Korean Peninsula.' Naturally, it makes no sense for China to demand that North Korea cease its nuclear weapons development while increasing its own nuclear warheads by 100 annually. Despite the change in China's nuclear strategy, this means that denuclearization of the Korean Peninsula will no longer be China's policy concerning the North Korean issue. In other words, it can be interpreted that China implicitly acknowledges North Korea's status as a nuclear-weapon state, even if not officially. We must view the Korean Peninsula from China's perspective, not from our own. China's perspective on the Korean Peninsula is shaped by a combination of three factors, with varying emphasis over time. We view China in a complex manner, but China views us even more complexly. The first is the perspective on South Korea itself.

This was the initial perspective, at the time of establishing diplomatic relations in 1992. Due to South Korea's economic value and the diplomatic value of isolating Taiwan, Sino-South Korean relations were pursued despite North Korea's strong opposition. Consequently, South Korea received excellent treatment for ten years. The second is the reassessment of the value of both North and South Korea after the 2000s, leading to the commencement of a full-fledged balancing diplomacy. Currently, China's policy toward the Korean Peninsula can be described not as a policy toward South Korea or North Korea, but as a policy toward the Korean Peninsula as a whole. The third is the perspective on South Korea within the context of the US-China hegemonic competition since the 2010s. Simply put, it is about setting the relationship with China based on the question, 'South Korea, what will you do?' These three perspectives interact complexly, with the second perspective being central and the third being supplementary at present. Therefore, focusing on the second perspective, China pursues its Korean Peninsula policy sequentially in accordance with its national interests.

This was the initial stage. At the time of establishing diplomatic relations in 1992, South Korea's economic value, and the diplomatic value of isolating Taiwan, led to the establishment of diplomatic ties despite North Korea's strong opposition. This continued for 10 years. During that period, South Korea received excellent treatment. Secondly, as we entered the 2000s, the value of both North and South Korea began to be reassessed, marking the start of a full-fledged balancing diplomacy. Currently, China's policy toward the Korean Peninsula is not a policy toward South Korea or North Korea, but a policy toward the Korean Peninsula as a whole. Thirdly, emerging in the 2010s, it is a perspective on South Korea within the context of the US-China hegemonic competition. Simply put, it is about deciding China's approach based on the question, 'South Korea, what will you do?' These three factors operate concurrently, with the second factor being central and the third being supplementary. Therefore, focusing on the second factor, China pursues its Korean Peninsula policy sequentially in accordance with its national interests.

This was the initial stage. At the time of establishing diplomatic relations in 1992, South Korea's economic value, and the diplomatic value of isolating Taiwan, led to the establishment of diplomatic ties despite North Korea's strong opposition. This continued for 10 years. During that period, South Korea received excellent treatment. Secondly, as we entered the 2000s, the value of both North and South Korea began to be reassessed, marking the start of a full-fledged balancing diplomacy. Currently, China's policy toward the Korean Peninsula is not a policy toward South Korea or North Korea, but a policy toward the Korean Peninsula as a whole. Thirdly, emerging in the 2010s, it is a perspective on South Korea within the context of the US-China hegemonic competition. Simply put, it is about deciding China's approach based on the question, 'South Korea, what will you do?' These three factors operate concurrently, with the second factor being central and the third being supplementary. Therefore, focusing on the second factor, China pursues its Korean Peninsula policy sequentially in accordance with its national interests.

First, China desires a stable division and does not wish for unification. However, it also does not want North Korea to cause trouble. Second, maintaining the North Korean regime has strategic value that cannot be bought. This is not out of affection for North Korea. Third, it involves improving relations between South Korea and China, and achieving balanced diplomacy between the two Koreas within that framework. My interpretation of Premier Li Qiang's visit to Pyongyang on the 80th anniversary of the founding of the Workers' Party of Korea last October is that it was a reciprocal visit following Premier Li Keqiang's attendance at the trilateral summit in May 2024. Historically, China has always operated this way. Following President Xi Jinping's state visit in November last year, a visit to North Korea will likely occur soon. China has always managed relations in this manner. Furthermore, within the context of the US-China hegemonic competition, South Korea's stance on three issues is crucial.

Securing South Korea's Independent Value and Challenges Amidst US-China Competition

China will determine its policy based on South Korea's position in military security, economy, and diplomacy. Finally, the challenge posed to South Korea is this: How can South Korea present its independent value to China? At one time, the relationship between South Korea and China was led by South Korea; now, it is a competitive relationship led by China. What is South Korea's independent value in this context? This is a question that must be considered. This is the dilemma presented to us. It is not easy to address these issues at the global, regional, and bilateral levels. It is not that we do not know what to do; we know. The problem is that to implement these policies, we must persuade three parties simultaneously. First, we must persuade the great powers, China and the United States. Second, we must persuade domestic political factions, divided between conservatives and progressives. Third, we must persuade the public. Therefore, the solution is not unknown. However, satisfying everyone simultaneously is impossible.

There is an ongoing US-China hegemonic competition; is it possible to maintain good relations with both countries? A life-and-death competition is unfolding between the US and China, and regionally, the Taiwan issue is particularly critical. Personally, I believe it would be difficult for the US military to intervene in the event of a Taiwan contingency at the current stage. While the US military possesses overwhelming superiority over China, would the United States truly be willing to use nuclear weapons to defend Taiwan? China could. As it is a matter of survival, China might use nuclear weapons to maintain the Communist Party's power.

Furthermore, as you know, it is impossible for the United States to provide only weapons support in the Taiwan issue, as it did in Ukraine. China has already encircled Taiwan. In the past two years, four encirclement drills have been conducted. This is out of a total of five drills in the last 20 years. Conducting encirclement drills implies the need to deploy US forces. Will they come from the mainland or from surrounding areas? They would likely come from Pyeongtaek or Osan. At that moment, East Asia would be at war. I believe the US military would be unable to deploy. What then? Similarly, the biggest problem in South Korea-China relations is that South Korea's industrial and technological competitiveness has fallen too far behind globally. It's not just a matter of falling behind.

It's simple. Last year, South Korea produced 7,000 PhDs in science and engineering, while China produced 50,000. Last year, South Korea's total R&D investment was $85 billion, while China's was $500 billion. The South Korean government plans to invest 10 trillion won in AI, while China is investing 200 trillion won. This is the result of 30 years of cumulative effort. How will this issue be resolved? In such a situation, if South Korea cannot assert its independent value, it will be difficult to receive fair treatment. The international community is even more pragmatic; who would offer preferential treatment? Moreover, the emotional aspect of South Korea-China relations cannot be overlooked. The Chinese Communist Party does not disregard public sentiment; on the contrary, it pays close attention to it.

This issue will not be resolved overnight. Furthermore, in South Korea, there are groups that exploit this politically, and groups that utilize anti-China alliances for economic gain. These groups will not disappear easily. Thank you for listening attentively.

Author: Cho Young-nam (Professor, Graduate School of International Studies, Seoul National University)

Management and Editing: Lim Jae-hyun (EAI Research Fellow)
Inquiries: 02-2277-1683 (ext. 209) | jhlim@eai.or.kr