As the US moves to de-risk with China, will Korea be the last left seeking to decouple?

Posted on : 2023-06-13 15:21 KST Modified on : 2023-06-13 15:21 KST
A multiplicity of factors has prompted the US to rethink its confrontation with China — will South Korea do the same?
President Xi Jinping of China and President Joe Biden of the US stand for a photo ahead of the Group of 20 summit in Bali, Indonesia, in November 2022. (Reuters/Yonhap)
President Xi Jinping of China and President Joe Biden of the US stand for a photo ahead of the Group of 20 summit in Bali, Indonesia, in November 2022. (Reuters/Yonhap)

The confrontation between the US and China is entering a new phase of crisis management.

As the Group of Seven powers pledged to shift their China policy from “decoupling” to “de-risking” at their summit held in Hiroshima, Japan in May 2023, the US and China are attempting to reconcile through high-level meetings.

US media, such as Bloomberg, reported on Tuesday that US Secretary of State Antony Blinken will visit China in late June.

The visit is expected to mark a new phase in the US-China relationship, which has been stuck in a tense, confrontational state. It is the first time a US secretary of state has visited China since then-Secretary of State Mike Pompeo paid a brief three-hour visit to Beijing in October 2018.

Exploring normalization post-“balloon incident”

The two countries have previously made attempts to reconcile. President Joe Biden and President Xi Jinping met on the sidelines of the Group of 20 summit in Bali, Indonesia, in November 2022 and agreed to establish a mechanism for dialogue between key government officials to address a number of issues between the two countries.

Biden said there would be no “new Cold War” between the two countries, and announced Blinken would be visiting China. However, Blinken’s visit, scheduled for February 2023, was canceled due to the incident involving a Chinese balloon observation device in US airspace, further straining relations between the two countries.

In response to China’s outrage at the US shooting down the balloon, the US extended a conciliatory hand by offering high-level contacts. In February 2022, shortly after the balloon incident, Robert Kaproth, the deputy assistant secretary of the treasury for Asia, traveled to Beijing and also discussed a possible visit to China by Secretary of the Treasury Janet Yellen.

On May 10-11, US national security adviser Jake Sullivan and Wang Yi, the director of the Chinese Communist Party Central Committee Foreign Affairs Commission, met in Vienna, Austria.

This was followed by a top-secret visit to China by CIA Director William Burns, Biden’s talk of a potential “thaw” with China at the Hiroshima Group of Seven summit (May 21), and Chinese Minister of Commerce Wang Wentao’s trip to the United States for talks with US Commerce Secretary Gina Raimondo (May 25-26).

Blinken’s visit is the culmination of a series of high-level contacts aimed at adjusting bilateral relations. It was coordinated by US Assistant Secretary of State for East Asian and Pacific Affairs Daniel Kritenbrink, who visited Beijing last week.

Since the Trump administration, the US has pressured China on several fronts, as can be seen in the supply chain reorganization in the economic and trade sector, as well as the strengthening of its Indo-Pacific strategy to keep China closed off on the military side.

What has led the US to change this approach, which continued with the Biden administration, and adjust its relations with China?

Decoupling from China: A choice for the Yoon administration

First, the war in Ukraine. At the G20 summit in November 2022, Biden proposed to Xi that the two countries adjust their relationship and called for China to play a role in the war in Ukraine.

The US has tried to isolate Russia with sanctions for starting the war, but traditionally pro-US countries such as Saudi Arabia, Turkiye, South Africa and Brazil have deviated from the sanctions and expanded their trade with Russia. Furthermore, the US has witnessed the rise of the “Global South” that engages in equidistant diplomacy between the Sino-Russian camp and the West.

In response, China has sought to break through the barriers and neutralize pressure tactics put in place by the US by expanding ties with Russia and the Global South.

Now, as the US faces China’s growing influence in world politics in the wake of the war in Ukraine, it is highly likely that the US continuing its policy of confrontation with China will only exacerbate the situation in Ukraine and strengthen the solidarity among China, Russia and the Global South.

Second, allies such as France and Germany are wary of the current political situation.

Visits to China by Germany’s Chancellor Olaf Scholz in November 2022 and President Emmanuel Macron of France in April 2023 demonstrated that the two countries are unwilling to be dragged into the US policy of confrontation with China.

“We don’t want to decouple from China,” Scholz said. Regarding the Taiwan crisis, Macron said that Europe was in danger of being “caught up in crises that are not ours, which prevents it from building its strategic autonomy.”

Third, discontent in the US economy is also a big factor. In an interview with the Financial Times on May 24, Jensen Huang, CEO of Nvidia, the world’s most valuable semiconductor company specializing in generative artificial intelligence, criticized the US-China supply chain separation policy, saying it would be “enormous damage to American companies if they were unable to trade with Beijing,” and that if China were unable to buy from the US, it would “build it themselves.” This is an outright vocalization of discontent straight from the US business community.

In May 2023, the heads of the largest US companies visited China. Tesla CEO Elon Musk said the economies of the US and China are “conjoined twins” and that he “opposes decoupling.

JPMorgan Stanley CEO Jamie Dimon said, “You\'re not going to fix these things if you are just sitting across the Pacific yelling at each other. So I’m hoping we have real engagement,” adding that he supports de-risking.

The day before the US-led Indo-Pacific Economic Framework for Prosperity signed a supply chain cooperation agreement that excludes China, business organizations such as the US Chamber of Commerce and the Business Roundtable, an association of CEOS of 200 leading companies, released an open letter saying they oppose China-free supply chains.

While the US de-risking policy does not inherently modify its confrontation policy with China, it is clearly intended to patch up internal and external grievances. Allies and the business community are determined to reap the rewards of China’s markets and opportunities, and China is making it clear that it is open to them.

The Yoon administration has jumped on the decoupling bandwagon by unilaterally strengthening the US-Japan alliance. Now, the US’ move to de-risk ties with China so that it doesn’t lose any opportunities is again presenting itself as a trap for South Korea.

China’s message to South Korea is also clear. “China-Korea relations have been facing external challenges. We hope that Korea will extricate itself from external obstacles in its dealings with China,” Chinese Ambassador to South Korea Xing Haiming told Lee Jae-myung of the Democratic Party of Korea on Thursday, adding that “if Korea solidifies its belief in cooperation with China, adjusts to the changes in the Chinese market and industrial structure, and forms a strategy for investment in China in a timely manner, it will be able to continue reaping the benefits of the growth of the Chinese economy.”

By Jung E-gil, senior international affairs writer

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