[EAI Special Commentary Series - The COVID-19 Shock and China] ① The Impact and Outlook of COVID-19 on China's Foreign Relations and Korea-China Relations

[Editor's Note]

EAI is publishing a special commentary series titled “The COVID-19 Shock and China,” comprising four parts, which contain expert analyses and outlooks on China, standing at a crossroads of crisis and opportunity due to the COVID-19 pandemic.

1. Lee Dong-ryul: The Impact and Outlook of COVID-19 on China's Foreign Relations and Korea-China Relations

2. Choi Pil-soo: Will the COVID-19 Pandemic Strengthen China's Economic Standing? [Read Report]

3. Ha Nam-seok: COVID-19 and Reactions within Chinese Society [Read Report]

4. Yang Gab-yong: The Dual Nature of the Party-State System Changing Due to COVID-19 [Read Report]

This is the first report in EAI's special commentary series “The COVID-19 Shock and China.” It features a special commentary by Lee Dong-ryul, Director of the EAI Center for Chinese Studies and Professor at Dongdeok Women's University, analyzing China's foreign policy post-COVID-19. As developed countries, including the United States and Europe, failed in their pandemic responses, China, which was initially at the center of domestic and international criticism due to controversies surrounding its initial concealment and inadequate response, is now reaping the benefits. China is actively working to improve its image through robust international aid and public relations campaigns, and is seeking its relative rise by actively leveraging the opportunities created by the global crisis caused by COVID-19. However, the author points out that while China may gain relative benefits, it still faces limitations in achieving independent growth by presenting new global standards and values. This is because China is still facing political and economic difficulties due to the COVID-19 pandemic, and it cannot escape the responsibility for the 'China-originated crisis.' The author predicts that the US-China rivalry and conflict will intensify due to deepening mutual distrust caused by the COVID-19 pandemic. However, it is anticipated that both countries will adopt a strategy of securing spheres of influence through 'proxy containment and competition,' leveraging their respective alliances and partnerships, rather than direct confrontation, due to domestic issues. In this context, South Korea faces the pressure of making binary choices. The author argues that South Korea must strengthen its strategic flexibility in the current transitional international environment to secure its independent strategic value and position.

I. What are the Challenges for Chinese Diplomacy Caused by the COVID-19 Shock?

COVID-19 delivered an unexpected and immense shock to China. Even China's most significant political event, the Two Sessions (Lianghui), was postponed for the first time in over 40 years since the reform and opening-up. Due to COVID-19, the Chinese Communist Party (CCP) regime, on the eve of its 100th anniversary in 2021, has exposed both the fragility and strengths of its system in the past four months. The authoritarian regime centered around Xi Jinping has been put to a crucial test by COVID-19. Despite controversies surrounding the Chinese government's initial concealment and inadequate response to the outbreak, the Xi Jinping leadership and the CCP regime appear stable internally, with no visible internal conflicts or turmoil.

Behind China's relatively rapid recovery from the shock and criticism of COVID-19 lies the failure of developed countries, particularly the United States and Europe, in their responses to the pandemic. The Xi Jinping government is benefiting from relative evaluation in the context of a global pandemic. Chinese citizens have suffered a double burden of pain from the coronavirus itself and discriminatory attacks as the cause of its spread. However, as Chinese people witnessed the failure of advanced countries like the US, which had criticized them, in pandemic control, anti-CCP sentiment has transformed into increased internal cohesion, relative confidence, and support for the regime.

Nevertheless, the Xi Jinping government is not free from the controversy surrounding its initial response to COVID-19, which has left considerable damage to the credibility and image of the CCP. In particular, economic uncertainty in the post-COVID-19 era remains a significant challenge. It is no exaggeration to say that the legitimacy of the CCP regime depends on economic growth. However, with the IMF forecasting China's economic growth at 1.2% this year, the first quarter economic growth rate was announced at a record low of -6.8% year-on-year. China, which should be preparing to celebrate its 100th anniversary, faces the difficulty of being preoccupied with economic recovery. Paradoxically, the Xi Jinping government stands at a critical juncture where challenges and opportunities coexist, stemming from the 'China-originated virus.'

The Xi Jinping regime seeks to transform the crisis into an opportunity as quickly as possible. Chinese foreign policy also prioritizes restoring credibility in the CCP and securing the legitimacy and stability of the regime. China is focusing on improving its image by actively highlighting its contributions, shifting from a defensive stance against responsibility for COVID-19, while also seeking to maintain momentum for economic recovery. China is pursuing a two-track strategy. While engaging in an intense public relations battle with the United States over the origin and responsibility for COVID-19, China aims to improve its national image and external perception. On the other hand, China is actively pursuing 'pandemic diplomacy' by promising cooperation and support for COVID-19 response to the international community, leveraging its experience as a country that faced the pandemic early. The Chinese government has recently supplied masks, protective gear, and diagnostic equipment to 127 countries and 4 international organizations, and dispatched medical support teams to 11 countries. By promptly providing medical supplies and support to key economic cooperation partners, China aims not only to restore its damaged national image but also to create new momentum for external economic cooperation.

II. Will the COVID Crisis Become a New Strategic Opportunity for China's Rise?

China's pandemic diplomacy is evolving with multiple objectives. Through international support and cooperation in responding to COVID-19, China aims to improve its national image, expand its role in the international community, and revitalize the Belt and Road Initiative (BRI). While publicly offering cooperation and support to the world, China is concentrating its significant medical support teams on pro-China countries and key BRI cooperation partners such as Italy, Iran, Iraq, Cambodia, Laos, the Philippines, Pakistan, and Venezuela.

Furthermore, Chinese IT giants are taking the lead in providing medical equipment, supplies, and technical support, which also appears to be driven by strategic considerations. For example, Alibaba founder Jack Ma is supporting Africa, Xiaomi is supporting India and Europe, and Huawei is playing a role in Italy and Canada, indicating a division of labor in their support efforts. Although presented as private sector support, the systematic nature of the assistance, with selected companies and recipient countries, gives the impression of strategic consideration.

President Xi Jinping has actively engaged in 'COVID diplomacy' through phone calls with leaders of approximately 30 countries, starting with German and French leaders on January 22, followed by Saudi Arabia (February 26), the United States (March 27), India (April 1), Indonesia (April 2), Namibia (April 3), Turkey (April 8), and Russia (March 19/April 16). In his calls with leaders, Xi consistently proposed cooperation in combating COVID-19 and emphasized the 'community of shared future for mankind' and the BRI, which can be considered his signature initiatives. For instance, Xi emphasized, 'Mankind is a community of shared future, and unity and cooperation are the most powerful weapons to fight and defeat diseases.' In a phone call with the President of Laos (April 3), he promised the stable progress of the China-Laos railway and economic corridor construction projects.

Amidst a global economic crisis, China anticipates increased demand for investment and economic support from neighboring countries. Therefore, it is seeking to link COVID-19 cooperation and support with the BRI. While the BRI is a 'Xi Jinping agenda' and a geoeconomic project suitable for China to expand its global influence while minimizing geopolitical security dilemmas, its revitalization post-COVID-19 will face considerable difficulties. There is a political burden associated with major BRI partners like Italy and Iran being heavily affected by COVID-19, and China itself faces significant economic constraints in sustaining long-term infrastructure investments amidst the economic crisis. Consequently, China aims to maintain the momentum of the BRI by seeking new approaches centered on cooperation in the medical, health, and IT sectors.

China has a history of seizing opportunities for 'relative rise' during major global crises. For example, during the 1997 Asian financial crisis, the September 11 terrorist attacks in 2001, and the 2008 global financial crisis, China capitalized on the weakness of the United States to secure strategic time and space for its rise, effectively achieving relative growth. The active engagement in international cooperation and aid in the wake of the COVID-19 pandemic suggests an intention to leverage this crisis as a fourth opportunity for relative rise. The US's passive stance on international cooperation, exemplified by President Trump's announcement to halt funding to the World Health Organization (WHO), presents China with an opportunity to gain relative benefits.

However, the crisis caused by COVID-19 is fundamentally different from previous ones as it is a 'China-originated crisis,' making it difficult for China to escape responsibility. Furthermore, China will likely prioritize domestic stability and economic recovery for a considerable period, limiting its capacity. Nevertheless, if China overcomes the crisis earlier compared to the US or Europe, it could improve its national image and expand its role in the international community. However, unlike the previous three opportunities, China's current standing is already at the threshold of becoming a superpower, limiting the extent to which it can maximize the effects of 'relative rise.'

China now needs to pursue independent and absolute growth by presenting new, differentiated global standards and values and providing global public goods. However, China remains preoccupied with pursuing its fundamental national interests, such as regime security, development, and even sovereignty. Even in the process of international cooperation for COVID-19 response, it is perceived as pursuing its own development strategies, such as the BRI, behind the scenes. China has not yet demonstrated the capacity or willingness to design a new international order by presenting universal and altruistic alternative norms, values, and global leadership that the international community can accept.

In conclusion, China still faces clear limitations in securing independent and absolute global leadership. Therefore, even after COVID-19, depending on the changes in the power gap with the United States and the corresponding changes in US strategy towards China, the existing pattern of China strategically reacting and responding will likely continue, although the amplitude of fluctuations may increase. For instance, if the US's weakness accelerates due to the COVID-19 crisis, China will actively seek to leverage the strategic opportunity for its fourth relative rise. Conversely, if the US recovers rapidly and intensifies its pressure on China, China may focus on peripheral diplomacy and maintain low-cost management diplomacy, prioritizing regime consolidation and stability recovery in preparation for the 20th Party Congress in 2022.

III. What is the Future Direction of US-China Relations Post-COVID Crisis?

Amidst a global pandemic crisis, the US and China, the two major powers, are engaged in fierce public relations battles over responsibility rather than seeking cooperation. In the process, the US and China have effectively reaffirmed their fundamental differences in systems, races, and ideologies, leading to increased mutual distrust. Some even argue that distrust and animosity towards the US within China have reached their highest point in the 41 years since diplomatic relations were established, and that bilateral relations are at their worst.

Since the launch of the Trump administration, the US has exerted pressure on China across the board, starting with trade and extending to technology, finance, human rights, Hong Kong, and Taiwan. Despite this, China's state-controlled media and academia have maintained relative composure, consciously refraining from expressing pessimism about US-China relations. In particular, many Chinese scholars, while agreeing that competition and conflict in US-China relations have intensified across the board, have remained reserved about characterizing it as a hegemonic struggle. This appears to reflect, to some extent, the policy intention of the Xi Jinping government to avoid escalating conflict with the US.

However, the fierce exchange of words between the US and China over COVID-19 responsibility has escalated into an emotional conflict over systemic and racial issues, deepening the roots of distrust between the two countries and exacerbating the environment for intensified conflict and competition post-COVID-19. The Trump administration has criticized China's failure to manage COVID-19, attributing it to systemic factors such as media control, lack of transparency, and a vertical power structure. From China's perspective, this constitutes a challenge to the fundamental vulnerabilities of the CCP regime, perceived as a threat and a violation of its red lines. During the process of overcoming the COVID-19 crisis, Chinese scholars and public opinion have also expressed increased dissatisfaction with the US, and concerns about US-China relations have significantly risen. Furthermore, as mutual distrust between the US and China deepens, government-level dialogues, as well as most 1.5-track strategic dialogues, have been suspended due to COVID-19, leaving little opportunity for negotiation to improve relations.

To minimize the exposure of its systemic vulnerabilities, the Chinese government has no choice but to engage in an uncompromising verbal battle with the US over COVID-19 responsibility. From the Chinese government's perspective, the verbal sparring with the US may not be detrimental to healing the wounds of the COVID-19 crisis internally and restoring national unity and regime support. Nevertheless, given that the Xi Jinping government faces political and economic difficulties due to the COVID-19 crisis, it is also rational to avoid further expanding the front of conflict with the US. China has become unable to fulfill the terms of the Phase 1 trade agreement with the US due to the COVID-19 crisis. While the spread of COVID-19 provides an excuse for suspending the agreement's implementation, the US is likely to continue its pressure on China in other ways and areas under the pretext of non-compliance. Therefore, China is in a defensive position, needing to manage its relationship with the US and buy time.

In this context, China continues to draw a clear line regarding the possibility of a so-called 'new Cold War' after COVID-19. That is, despite the deterioration of relations with the US, China does not anticipate a situation of camp confrontation under a bipolar system, similar to the Cold War era. US global leadership is weakening, and various countries are preoccupied with their domestic difficulties, thus being wary of getting involved in US-China conflicts. While China's international standing is relatively improving, it is still insufficient to form a united front against the US. This stance against the emergence of a 'new Cold War' hints at China's greatest concern: the formation of an anti-China international coalition led by the US, which could be used to pressure and contain China.

Although an extreme confrontation like the Cold War era may not materialize as China hopes, the competition between the US and China to secure and confirm allies, in a situation where friends and foes are unclear, is likely to intensify. The acceleration of changes in global supply chains due to COVID-19 will further weaken internationalism. Consequently, US-China relations will likely see a decline in economic interdependence and a strengthening of national self-interest, leading to intensified competition and conflict rather than cooperation.

However, given the increasing need for both US and Chinese political leaders to focus on domestic issues for the time being, sustained intense direct confrontation may not be easy. Therefore, the likelihood of both the US and China developing strategies to secure spheres of influence through 'proxy containment and competition,' by rallying their respective allies and partners and putting them at the forefront, may increase. The competition to expand spheres of influence, particularly by promoting the Indo-Pacific strategy (FOIP) and the BRI, is likely to involve both incentives and pressure to draw in intermediate countries in the region.

IV. The Impact of COVID-19 on Korea-China Relations and South Korea's Role

1. Korea-China Relations: Opportunities for Cooperation on a Bilateral Level, External Variables Remain Fluid

In the process of responding to COVID-19, Korea-China relations have confirmed a willingness to create opportunities and momentum for cooperation. Despite some controversies, attempts were made to cooperate through mutual information exchange and support. The virtual meeting of the foreign ministers of Korea, China, and Japan, the Korea-China dialogue on COVID-19 response, and regular vice-ministerial level dialogues are evaluated as significant cooperative examples amidst the global trend of 'every nation for itself.' South Korea's economic dependence on China was already weakening due to market logic, and this trend is likely to accelerate further due to the COVID-19 crisis. The question now is how South Korea will rationally diversify its overseas markets and investment destinations while simultaneously establishing new forms and foundations for cooperation with China.

Due to geographical proximity, Korea-China relations have learned the lesson that infectious disease outbreaks can lead to political disputes over containment measures and conflicts arising from ethnic discrimination. Therefore, using this experience as a lesson, discussions are needed to establish cooperative systems and manuals for rapid and systematic joint response in the event of an infectious disease outbreak, covering aspects such as entry/exit, trade, and exchanges of businesspeople and students. Furthermore, it is necessary to institutionalize the dialogue on building a quarantine safety net between Korea and China and develop it into a consultative body that comprehensively analyzes and responds to various human security issues, thereby revitalizing the stagnant strategic dialogue between the two countries.

South Korea must consider and approach the external variables that overwhelmingly influence bilateral relations, even in the process of cooperating with China on COVID-19 response. China's recent revitalization of its peripheral diplomacy and its approach towards South Korea are also pursued within the framework of its diplomacy towards the US. In particular, if the regional power competition between the US and China targeting the post-COVID era intensifies, the scope and intensity of the impact of external variables on Korea-China relations will become broader and stronger.

Therefore, South Korea needs to establish comprehensive strategies and policies by intricately considering its diplomacy towards the US, diplomacy towards China, and North Korea policy more than ever before. Additionally, South Korea should actively utilize the temporary respite in competition, as both the US and China focus on pandemic response, to propose and pursue various mini-lateral cooperation initiatives, such as Korea-China-Japan, Korea-US-China, and Korea-Japan-US-China, through cooperation on quarantine measures. This will create opportunities to expand regional multilateral cooperation spaces and minimize the impact of external variables on Korea-China relations.

2.  The Trend of Strengthening Protectionism and the Search for South Korea's Role in the International Community

The COVID-19 pandemic is an unprecedented event, and the post-COVID international order will be even more unpredictable, fluid, and uncertain due to its highly fluid nature. For South Korea, which is highly sensitive and vulnerable to changes in the international situation, this is a time to prepare by considering various scenarios, enhancing predictability, strategic flexibility, and patience.

In the process of COVID-19 spreading globally, virtually no country has emerged to play a global leadership role. Most major powers and developed countries have focused on their own border closures and quarantines for domestic pandemic control, showing a passive tendency towards global cooperation. Although the Xi Jinping government emphasizes international cooperation, it must prioritize domestic regime stability and economic recovery, limiting its capacity to expand global leadership.

The period of weakened or absent great power leadership due to COVID-19 may be prolonged. Consequently, the role and status of middle powers like South Korea, or alliances of middle powers, may gain prominence. To prepare for these changed circumstances, South Korea needs to place greater emphasis on middle power alliances in its diplomatic activities. Notably, in the process of responding to COVID-19, South Korea has accumulated unique assets, achieving effective quarantine results while maintaining openness and transparency – a 'Korean-style' response distinct from that of the US, Europe, and even China.

It is important for South Korea to provide its accumulated experience in quarantine management to the international community and contribute to securing its strategic value and status. However, excessive boasting about the 'Korean model' could potentially cause controversy both domestically and internationally, requiring a cautious approach. Leveraging international attention towards South Korea, efforts should be made to explore South Korea's role in building mechanisms for collective solidarity and cooperation within the international community. A gradual approach, where the private sector, particularly in the medical, health, and IT industries, takes the lead with government support, could also be considered. Furthermore, expanding the scope of quarantine cooperation incrementally to include Korea-China-Japan, ASEAN, and the East Asian region, and establishing multilateral cooperation frameworks, would be an effective and strategically meaningful approach.

If new changes occur in the power balance between the US and China in the post-COVID-19 era, the power competition between the two countries could intensify early in the form of 'proxy containment and competition.' In this scenario, South Korea, due to its unique geopolitical location, will face pressure for unwanted binary choices on various issues more than any other country. South Korea has few alternatives other than strengthening its strategic flexibility to seek appropriate options that maximize national interests depending on the situation and issue. It is crucial to seize the current transitional period in the international community as a diplomatic golden time and exert diplomatic efforts to secure South Korea's independent strategic value and position. ■

■ Author: Lee Dong-ryul_ Director of the EAI Center for Chinese Studies. Professor at Dongdeok Women's University. He holds a Ph.D. in Political Science from Peking University's School of International Studies and previously served as President of the Association for Modern Chinese Studies. He is currently a member of the Ministry of Foreign Affairs' Policy Advisory Committee. His main research areas include China's foreign relations, Chinese nationalism, and minority issues. His recent publications include "China's Strategy and Role in the Denuclearization and Peace Process on the Korean Peninsula," "The 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' Initiative," "Deciphering China’s Security Intentions in Northeast Asia: A View from South Korea," and "Territorial Disputes of China" (co-authored).

■ Managed and Edited by: Yoon Jun-il Researcher at EAI

Contact: 02 2277 1683 (ext. 203) junilyoon@eai.or.kr

[EAI Commentary] is a commentary series planned to provide a platform for discourse where experts from various fields can offer in-depth analyses and policy recommendations on major domestic and international issues. Please cite the source when quoting. EAI is an independent research institution unaffiliated with any political faction. The claims and opinions expressed in reports, journals, and books published by EAI are not attributable to EAI and solely represent the views of the respective authors.