Seoul should be pragmatic in balancing ties with China and the US
Editor's Note: The writer is a freelance columnist on international affairs based in Karachi, Pakistan. The article reflects the author's opinions and not necessarily the views of Gwadar Pro.
“President Yoon Suk Yeol's approval rating has hovered at around 30 percent since he took office a year ago, which is the lowest among recent presidents. It is now approaching 40 percent for the first time, however. But the rise is not due to Yoon's diplomatic feats as he wants everyone to believe. Yoon is moving too close to the U.S. and too far from China, making even experts sympathetic to him tilt their heads,” is how the editorial of the Korea Times on May 18 explained the growing dilemma being faced by South Korea’s highly faulty foreign policy under Yoon, who saw a slight bulge in his approval because of an inept opposition rather than any validation of his pro-US tilt.
Yoon's blatant proclivities towards the United States have negatively impacted bilateral ties with China, resulting in a discernible correlation between South Korea's economic downturn and this Cold War-style foreign policy.
The latest statistics reveal a concerning trend for South Korea, trapped in a prolonged trade deficit spanning 14 months. Amidst a slump in global trade, South Korea faces persistent challenges in its relationship with China. In April, South Korea's exports to China experienced a sharp decline of 26.5 percent compared to the previous year, marking the 11th consecutive month of diminishing export figures. Additionally, outbound shipments contracted by 14.2 percent year-on-year. The country's essential export commodity, semiconductors, suffered a significant blow with a staggering 41 percent drop in exports due to declining demand and chip prices.
While the alliance between the United States and South Korea appears to have gained traction, ironically, it is also imperative to recognize that China-South Korea economic cooperation remains indispensable for the South Korean economy. As the global economic slowdown takes its toll, South Korea has witnessed a decline in exports to its top trading partner, China. Probably
alarmed by this trend, the South Korean Ministry of Trade, Industry, and Energy has responded with a proactive set of measures aimed at fortifying collaboration with China.
According to recent media reports, in a concerted effort to reinvigorate trade with its vital trade partner China, the South Korean government has unveiled an ambitious plan encompassing various strategic measures. Central to this endeavor is effective communication with the Chinese government. Furthermore, lucrative trade financing options and a range of incentives will be offered to the South Korean exporters seeking to engage in trade with China. Moreover, special assistance will be provided to companies relocating their facilities from China, offering support for their reshoring efforts and business restructuring.
The ministry has identified three key areas for expanding exports with China, including emerging industries like secondary batteries, consumer goods, and sectors associated with the digital and green transition. Through this robust plan, the South Korean ministry seeks to fortify its trade ties with China, leveraging synergistic opportunities in sectors that hold immense growth potential.
As South Korea grapples with persistent trade deficits and an ongoing economic downturn, it is very much natural for Seoul to seek to bolster economic collaboration with China, providing relief from economic pressures. However, it is crucial for the Yoon government to avoid unquestioningly aligning with the US in the pursuit of containing China.
Such an approach would only exacerbate the challenges facing economic and trade relations between China and South Korea, plunging them into a more painful predicament. Balancing the complexities of trilateral equation of relationships is imperative, as South Korea treads its path toward economic stability and growth.
On the other hand, Washington's recent actions to boost domestic manufacturing capacity suggest a lack of reliability as a partner for economic cooperation. The CHIPS Act and the Inflation Reduction Act reflect Washington's self-preservation instincts, disregarding the concerns and interests of its allies. This unilateral approach underlines Washington's priorities in self-preservation, potentially eroding the trust and cooperation necessary for meaningful economic partnerships with its international counterparts.
South Korea stands at a pivotal point, as the repercussions of choosing sides could significantly impact its industrial and supply chains and its broader economic structure. Unquestioningly embracing a subservient role in the US strategy of "decoupling" from and containing China might offer limited gains but incurs the risk of much greater losses. South Korea must pragmatically balance its relationships with both China and the United States, ensuring its path toward economic stability and growth.