Collateral Damage: What U.S.-China Competition Means for Korea

*A version of this op-ed appeared online (in Korean) on October 2, 2019 in The Chosun Ilbo.

Throughout history, the tenor of U.S.-China relations has had a major impact on the Korean peninsula.  China’s decision to enter the Korean War in the fall of 1950 prevented U.S. efforts to unify the Korean peninsula.  The rapprochement between Nixon and Mao in the 1970s compelled the two Koreas, fearing abandonment by their respective allies, to seek their own rapprochement, however temporary, in July 1972. The current trajectory of U.S.-China relations under Donald Trump towards strategic competition spells dire consequences for Korea.  Caught between its security patron and its giant neighbor, Koreans will be increasingly forced to choose between the two, and in ways that are detrimental to the longstanding alliance. 
South Korea’s preferred position has always been to hedge between the United States and China.  Also referred to as being a “bridge-builder,” Seoul hopes that as a “middle power” it can accommodate both Washington and Beijing’s desires.  Choosing one or the other is difficult because of three dilemmas that Korea faces. 
The first is the power dilemma. The strategic reality for South Korea is that China is a behemoth neighbor that will never go away.  The sheer size of the country is threatening. China, a permanent ally of North Korea’s, has a defense budget more than six times larger than that of South Korea and an economy nine times larger. Moreover, history tells us that nation states in close proximity that do not share the same regime-type (e.g. democracy versus autocracy) tend to view each other as threatening. Recent Asan Institute polls show that 66 percent of Koreans perceive a threat from China.  However, South Korea cannot simply afford to ally against China’s rise because of two other dilemmas.
The economic dilemma for South Korea is that it cannot delink from the Chinese economy even as it maintains a strategic relationship with the United States. Since 1992, bilateral trade has increased more than 37-fold; China surpassed the United States to become South Korea’s largest trade partner in 2003; and in 2015 the two signed an FTA removing tariffs on 90 percent of goods.  In short, South Korea cannot balance against the country to which its economic future is tied.
The third dilemma relates to unification. South Koreans believe that even though Beijing remains allied with Pyongyang, eventually Seoul will need to purchase Chinese acquiescence and strategic understanding in order to execute unification.  It will need to renegotiate extractive industry contracts with Beijing; it will need to seek Chinese understanding if Korea keeps its alliance with the U.S.; it will need China’s help in securing the northern border. Put simply, while denuclearization negotiations with North Korea requires the United States, unification of the Korean peninsula requires China.
Because of these three dilemmas, South Korea’s policies toward China are the most complex and nuanced among U.S. allies in the Indo Pacific.  It is not black and white but numerous hues of gray, which is something Americans find difficult to understand.
The current strategic competition between Washington and Beijing effectively reduces the space within which Korea can hedge; instead, it forces Korea to choose on issues where the US and China diverge.  Unfortunately for the U.S., Korean choices increasingly look to be delinking from U.S. interests.
When I compile a list of ten issues in the last six years upon which the U.S. and China divided, South Korea has effectively chosen to delink with U.S. interests on six of these.  Moreover, Seoul’s decision to choose the Chinese side on these issues was not specific to one political persuasion in South Korea.  Both conservative and progressive governments chose China.  So, for example, when the United States and Japan opposed China’s declaration of an ADIZ in the East China Sea in 2013, the Park Geun Hye government first sought quietly Beijing’s agreement to exclude Ieodo from the Chinese declaration.  It was only when China rejected the request that Seoul opposed the ADIZ with its ally.  And when in 2019 the United States asked Seoul to support its call for an open and rules-based Indo-Pacific order, the Moon Jae-in government averred for fear of alienating China, and still does not openly support the strategy.
The trendlines only appear to be getting worse.  On economic national security issues like 5G, the combination of U.S. pressure on South Korean companies to abandon business with Huawei and the South Korean government’s relative inaction in giving instructions to the telecom sector is bound to worsen alliance relations, as the private sector makes choices based on economics and not alliance strategy.  And if the Trump administration goes further on economic national security against China and calls for banning of semiconductor chip exports by “like-minded allies and partners”, then South Korean companies and the government will face an extraordinarily difficult decision that in the end may not weigh in favor of Washington.
A 60 percent “defect” rate for a U.S. military ally should sound alarms bells in Washington. The message here is that even as the United States may be justified in pursuing a confrontational trade and security policy with China, it must factor into this policy the calculated costs and benefits in terms of collateral damage to its alliances. 
Victor Cha
Senior Vice President for Asia and Korea Chair