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President Moon Jae-in meets with Chinese President Xi Jinping for a summit at the Intercontinental Hotel in Berlin on July 6. (taken from Blue House Facebook page)

The efforts by the South Korean government to bring a thaw to its relations with China, which were chilled by the deployment of the THAAD missile defense system to the Korean Peninsula, have been proceeding on multiple fronts. The two countries are expected to use a summit between South Korean President Moon Jae-in and Chinese President Xi Jinping – which could be held before the end of the year – to find a compromise that could enable them to get beyond the THAAD dispute.

“During the South Korea-China summit that was held at the G20 summit in Germany on July 6, the two leaders already agreed in principle about President Moon visiting China. Related deliberations are continuing through diplomatic channels,” said Foreign Ministry Spokesperson Noh Kyu-deok when asked about a South Korea-China summit during the regular press briefing on Oct. 26. In a cable that Moon sent to Xi the previous day congratulating him on his re-election, Moon said he hopes to meet Xi again before long.

The Blue House hopes either that Moon’s visit to China will be confirmed or that a South Korea-China summit will take place during the ASEAN+3 summit and the APEC summit, which will be held in Vietnam in November. The APEC summit would be a good time for China to shore up strategic relations with South Korea, since it will be held immediately after US President Donald Trump visits Japan, South Korea and China.

The mood is hopeful as well. On Oct. 13, South Korea and China extended their currency swap arrangement before its expiration, and, on Oct. 24, the two countries’ defense ministers met for the first time in two years. “When President Moon and President Xi meet at the APEC summit, the topic of a summit meeting will naturally come up, and the issue of THAAD and rolling back China’s punitive economic measures could also be discussed,” said a senior official at the Blue House. The ideal situation, in the view of the Blue House, is for Moon to visit China before the end of the year and for Xi to return the favor by attending the opening ceremony of the Pyeongchang Winter Olympics in Feb. 2018.

The sticking point is the two countries’ disagreement about THAAD. China is strongly opposed to the deployment of THAAD on the Korean Peninsula, regarding this as damaging its national interest by upsetting the strategic balance in Northeast Asia. Some media outlets have even reported that China is insisting that South Korea must either undo the THAAD deployment or acknowledge that the deployment has undercut China’s key interests before it will allow Moon to visit. The Blue House denied these reports: “China has not placed any such conditions on holding a summit or reaching an agreement.”

Amid these developments, some are predicting that South Korea and China will find a compromise that will allow both sides to skirt the conflict over the THAAD deployment. It would be quite embarrassing for China’s diplomatic reputation if Moon visits Japan before China.

“China has said that it will not negotiate on matters related to its security interests. But even if they don’t negotiate, I think they’ll be bringing a solution of their own devising,” said one diplomatic source. Economically speaking, China is South Korea’s largest trading partner, while South Korea is China’s third-largest trading partner. Allowing their relations to remain strained puts a burden on both sides. A considerable number of business analysts believe that THAAD is just a pretext for China’s economic retribution, which is quietly motivated by protectionist tactics aimed at sheltering and fostering domestic industry.

China has slapped harsh sanctions on South Korean exporters in sectors (such as automobiles and electric car batteries) where Chinese companies have become more competitive, but it is not sanctioning sectors (such as semiconductors and OLED) where it still needs South Korean technology because local firms’ competitiveness is at a low level. Significantly, China reportedly wanted LG to invest in OLED technology. That’s why investing in the cutting-edge sectors of technology as China wants is being floated as an ingenious way of solving the THAAD issue.

In a recent column published in the South China Morning Post, a Hong Kong-based newspaper, China expert Ivan Tselichtchev, a professor at Niigata University in Japan, said the real reason that China is taking revenge for THAAD is because the growing competitiveness of Chinese industries and companies – including the ones outmaneuvering Samsung Electronics on mobile phones – is leading China to now regard South Korea as a competitor.

By Seong Yeon-cheol, Kim Ji-eun, and Cho Kye-wan, staff reporters

Please direct questions or comments to [english@hani.co.kr]