Nurturing China-ROK ties

Differences in political systems, asymmetric economic interdependence and security priorities need resolving

To mark the 20th anniversary of the establishment of diplomatic relations between China and the Republic of Korea (ROK), and the start of their friendly exchange year, President Lee Myung-bak will pay a state visit to China from Jan 9 to 11.

Abandoning political hostility, the two countries established formal political and economic relations in 1992. This set the stage for the expansion of economic cooperation. In return, economic exchanges and cooperation further promoted political communication and mutual understanding.

Thanks to the concerted efforts of both sides, China-ROK relations have made great progress over the past two decades, with mutually reinforcing political and economic ties proving to be the most important feature of the bilateral relationship.

On the political front, bilateral relations have been maintaining a sound momentum and continue to reach new levels: a cooperative partnership oriented towards the 21st century in 1998, an all-round cooperative partnership in 2003, and a strategic partnership in 2008.

As to local level exchanges, more than 130 pairs of provinces and cities of the two countries have established friendly relations, forming an remarkably intensive communication network among local governments.

Economically, China has for years been the ROK's largest trading partner, its largest export market, its largest source of trade surplus, and its largest overseas investment destination, and the ROK is China's third largest trading partner.

Two-way trade between China and the ROK exceeded $200 billion in 2010. Furthermore, Beijing and Seoul have signed a series of intergovernmental agreements signaling significant progress has been made in bilateral institutional cooperation.

People-to-people exchanges between the two countries have also been very active. The personnel exchanges between the two countries reached nearly 6 million trips in 2010, two thirds of which, about 4.07 million, were from the ROK to China. About one third of South Korean people have been to China for travel, study or business trips. There are also about 68,000 ROK students studying in China, and about 78,000 Chinese students studying in the ROK.

China-ROK relations have developed so rapidly as to be beyond even the most optimistic expectations of the original designers.

Take trade relations for example. It has taken about 26 years for the bilateral trade volume between China and the United States to exceed $200 billion since they established diplomatic relations, while for China and the ROK, it has only taken 18 years, which is quite an achievement when you consider the ROK's economy is much smaller than the US'.

The development of China-ROK relations in such a short period of time is remarkable.

So, will China-ROK relations continue to develop over the coming two decades, or will they stop abruptly? Are there any deep structural problems hidden in bilateral relations and, if so, how can they be solved?

In politics, there are significant ideological differences between the two countries. China is becoming increasingly self-confident and more tolerant of outside thought. The ROK, though it has abandoned hostility, doesn't "appreciate" Chinese values.

Economically, with the development of bilateral trade, the two countries have developed a relationship of economic interdependence, in which the ROK economy is becoming more dependent on the Chinese economy, a typical asymmetric interdependence.

The ROK's exports to China accounted for about 30 percent of its total exports, while China's exports to the ROK accounted for less than 5 percent of its total. China's trade deficit with the ROK jumped to a record $70 billion in 2010, while the ROK's total trade surplus was about $40 billion.

On security, the ROK mainly depends on the US-ROK alliance, remains hostile to the Democratic People's Republic of Korea (DPRK), and regards China as the "patron" and "asylum" of Pyongyang. This mentality resulted in the souring China-ROK relations after the sinking of the Cheonan and the shelling of Yeonpyeong Island in 2010.

Differences in political systems, asymmetric economic interdependence, and different security priorities have led to Seoul's distrust of Beijing, which fears that China will turn the asymmetric economic interdependence into political leverage.

This is the crux of the problem in current China-ROK relations, and is the reason why Seoul is being reticent in promoting the establishment of the China-ROK Free Trade Area (FTA).

Despite expressing its satisfaction with China-ROK economic cooperation on several occasions, the ROK has signed FTAs with the US and European Union in order to reduce its economic dependence on China.

Clearly, President Lee Myung-bak' s scheduled visit, especially in the wake of the clash between Chinese fishermen and ROK coastguards and the death of DPRK leader Kim Jong-il, will be good for promoting bilateral relations, and the peace, stability and development of the Northeast Asia region.

In this critical period, both leaders can do more than just meet and shaking hands.

The author is an associate research fellow with the Institute of Asia-Pacific Studies, Chinese Academy of Social Sciences.

(China Daily 01/09/2012 page8)