S Korea presents stiff competition

By Tsai Zheng-jia 蔡增家  / 

Mon, Jul 08, 2013 - Page 8

During his five-year term in office that ended in February, former South Korean president Lee Myung-bak’s foreign policy leaned heavily toward the US, following a free-trade strategy that gave much more importance to North America and Europe than to Asia.

Lee’s successor, President Park Geun-hye, has taken on a new direction with her visit to China last month. She called her mission “a trip of heart and trust.”

“Heart-to-heart” exchanges must be held before “trust” can be built. That is why Park took every chance during her trip to show off her Chinese-language proficiency, as well as having a luncheon banquet with Chinese President Xi Jinping (習近平) and his wife, Peng Liyuan (彭麗媛), and engaging in heart-to-heart encounters with government and Chinese Communist Party leaders.

She also broke with the past practice of new South Korean presidents making state visits first to Japan and later to China.

Accompanying Park on her trip was the biggest-ever economic and trade delegation, reflecting South Korea’s determination to win back Chinese confidence in Korean business, which had almost vanished overnight at one point.

Park set herself three major tasks for the trip. First was to reconfirm the aim of denuclearizing the Korean Peninsula; second was to obtain renewed assurances about the strategic partnership between China and South Korea; and third was to make further progress toward a China-South Korea free-trade agreement (FTA). These three issues are set to be the mainstays of Park’s South Korea-China relations. They form a cornerstone for security on the South Korean Peninsula and are they key to a further leap forward for its economy.

Let us first consider the goal of removing all nuclear weapons from the Korean Peninsula. Over the past five years, former president Lee’s government took Washington as its kingpin, thinking this would help it beat a path to the gates of Pyongyang. However, this proved unworkable in practice, and in fact led to the greatest-ever tensions between the two Koreas.

Park wants to break with Lee’s policy. She is actively seeking channels for political dialogue with North Korea, while at the same time persuading Beijing to help pressure Pyongyang. The matching statements of the Chinese and South Korean leaders during Park’s recent trip are a clear indication of this.

The next point is assurances about the strategic partnership between the two countries. South Korea and Japan are the US’ two key allies in its policy of rebalancing toward Asia. Japan needs US backing in its dispute with China over the Diaoyutai Islands (釣魚台), which Japan calls the Senkakus, and for its plans to turn its self-defense force into normal national armed forces. In this way, Japanese Prime Minister Shinzo Abe needs to cling to the US to give him leverage in resisting China.

South Korea, for its part, has different priorities. It needs China’s help in dealing with North Korea, so Park has chosen to follow an evenhanded foreign policy in relation to the US and China. Her strategy is to follow the US with regard to international issues, while tagging along with China when it comes to regional ones. This is why Park sought reassurances from China about its strategic partnership.

The final point is making progress toward a China-South Korea FTA. Over the past five years, South Korea has signed FTAs with the US and the EU, but it still does not have one with the world’s third-biggest economy, which is why it is now shifting its focus back onto the Chinese market. Park has given up pursuit of a trilateral FTA with China and Japan, and is aiming instead for a bilateral one with China.

Not all of these goals are equally achievable.

The Korean Peninsula denuclearization can only occur if North Korea cooperates, while the strategic partnership with China can only be confirmed if the US does not object. For these reasons, both of these goals will require more time and effort before they can be reached.

This being the case, the primary purpose of Park’s visit to China related to the third goal of progress toward an FTA.

Since 2000, then-president Kim Dae-jung and his government adopted a strategy of advancing into the Chinese market. In this way, South Korean products broke into world markets using China’s market as a springboard. Because of this, Taiwan and South Korea were not competing on a level playing field, and this became a key factor in Taiwan’s lack of economic competitiveness in relation to South Korea.

Now, Park intends to relaunch the strategy of advancing into the Chinese market by pushing for an FTA. This means that South Korean businesses can be expected to compete strongly with Taiwanese companies in meeting China’s market demand.

Taiwan’s policymakers need to think long and hard about whether the nation is sufficiently prepared to deal with a second honeymoon between China and South Korea.

Tsai Zheng-jia is head of the Second Research Division of National Chengchi University’s Institute of International Relations.

Translated by Julian Clegg