US-China Rivalry and the Future of the Korean Peninsula

The ongoing “trade war” between the United States and China is not just a trade dispute in light of the two sides’ intensifying rivalry in the area of strategic technologies. The rivalry has deepened as China has stepped up efforts to overtake western countries in advanced technologies, especially for semiconductors (the silicon brains required to run smartphones), connected cars, cloud computing, and artificial intelligence.¹ President Xi Jinping’s program known as “Made in China 2025” is based on the subsidization of Chinese firms in those areas and the requirement of foreign companies to provide the key information for their technologies to Chinese partners. The latter part has provoked the United States, whose long-time superior status is based on superb strategic technologies. The ongoing trade dispute is thus another form of a strategic competition between the existing hegemon and a potential hegemon in contemporary international relations.

The Trump administration labels China a revisionist power seeking to “shape a world antithetical to US values and interests, displacing the United States in the Asia-Pacific region, expanding the reach of its state-driven economic model, and reordering the region in its favor.”² Its massive trade pressure on China is part of a comprehensive strategy of dealing with such behavior. The US-China strategic competition accelerated when the Obama administration declared the “pivot to Asia” in 2011 based on: 1) perceiving China as a potential geopolitical rival; 2) upholding the rules of the liberal international order against a country that might refuse to follow them; and 3) managing China’s rise and maintaining the open door in Asia with every element of American power. However, the Chinese perceived Obama’s Asia pivot as a form of expansionism, encroaching on their sphere of influence and seeking to expand and deepen US hegemony.³

The Trump administration has virtually followed the premise of the pivot that China is challenging the preeminent status of the United States in the Western Pacific region.  Admiral Philip Davidson, in response to policy questions from the Senate Armed Services Committee for an April 17, 2018 hearing to consider his nomination to become commander of the US Pacific Command (PACOM), stated, “China is now capable of controlling the South China Sea in all scenarios short of war with the United States.” Chinese control of the South China Sea—and, more generally, Chinese domination of China’s near-seas region, meaning the South China Sea (SCS), the East China Sea (ECS), and the Yellow Sea—could substantially affect US strategic, political, and economic interests in the Indo-Pacific region and elsewhere.”⁴

Nevertheless, Trump is seen as representing a radical break with grand strategy premised on liberal institutionalism, presumably signaling an end to the previous administration’s attempts to maintain and if possible widen the open door in East Asia. After two decades of continuity in America’s China strategy, the stage appears to be set for fundamental change.⁵ Plans for the United States and China to focus on building a trustful relationship are thus unrealistic at this juncture, given mutual skepticism of strategic intentions and unwillingness, on either side, to display strategic vulnerability.⁶

Against this backdrop, US-China rivalry gives South Korea strategic concerns that China might drive a wedge between Seoul and Washington, particularly when they deal with the North Korean nuclear problem; China might intervene when South Korea and the United Sates consult with each other about the future of US military presence on the peninsula; and China might play a spoiler role when South Korea comes across historic opportunities for Korean unification. When there is an intense Sino-US rivalry, it would be very hard for South Korea and the United States to expect North Korea to seriously implement the process of denuclearization, to expect China to emerge as a constructive player supporting the continued ROK-US alliance, and to prevent China from spoiling the unification process.

Rivalry management will require considerable attention both to the bilateral US-China relationship and to the rivalry between China and key US allies, especially Japan. Given US alliance commitments, the antagonistic rivalry between Tokyo and Beijing could exacerbate tensions between Beijing and Washington.⁷ China-Japan rivalry is also a concern to South Korea. As a victim of the Sino-Japanese War in 1894-5, South Korea needs a strategic balancer between China and Japan. At that time, South Korea did not have a strategic balancer, and the Sino-Japanese rivalry transformed the Korean Peninsula into the battleground for those rivals. South Korea hopes that the United States will play this balancer role while confining the strategic objective of US-Japan-South Korea security cooperation to dealing with North Korean threats rather than containing China—a difference with Japan since it is attempting to constitute an informal and implicitly anti-Chinese alliance known as “the quad,” which includes India, Australia, and the United States.⁸

The North Korean Nuclear Problem and US-China Divergence

Three elements have contributed to bringing North Korea to the negotiating table: 1) China’s sincere implementation of UN Security Council sanctions on North Korea; 2) US policy of maximum pressure including the threat to use force; and 3) South Korea’s proactive diplomacy of engaging North Korea for the international community. The Trump-Kim Jong-un summit on June 12, 2018 in Singapore was, in my opinion, a good start, if not sufficient. In light of North Korea’s behavior after the summit, it would be highly tempted to drag its feet and seek recognition as a virtual nuclear weapon state willing to open up its economy.

US-China cooperation is supposed to be the essential part of the strategy of inducing North Korea toward the path of denuclearization. North Korea would be highly tempted to try to balance one against the other as long as the United States and China continue their strategic competition and link the North Korean issue to it. In particular, China has been looking at North Korea through this lens, which means the North Korean nuclear issue is not to be isolated from other regional strategic issues such as Taiwan and the East and South China seas. China is likely to keep North Korea as a “strategic buffer” unless the United States makes a “concession” on those regional strategic issues. China has already been opening the backdoor for North Korea by loosening its sanctions since Kim Jong-un met with Donald Trump in Singapore.⁹

The worst nightmare for China would be that North Korea rapidly approaches the United States and becomes its de facto ally while CVID (complete, verifiable, and irreversible dismantlement) is not realized until the moment of US-North Korea diplomatic normalization. In light of China-North Korea mutual distrust that has deepened since the end of the Cold War, China’s concerns are not groundless. If that scenario happened, the US-led “virtual alliance network” of the two Koreas, Japan, and the United States could be targeted against China. It remains to be seen, however, whether South Korea would accept North Korea as a virtual ally without any resolution of the nuclear problem and CVID.

South Korea-China cooperation is necessary for denuclearization of North Korea. South Korea and China should define “complete denuclearization” as CVID and make concerted efforts to reciprocate with peace regime-building on the Korean Peninsula, rather than relying on premature lifting of economic sanctions, which means exchanging CVID for a peace regime, not just a peace treaty alone. “Peace regime” is a comprehensive concept, which includes denuclearization, US-North Korea/Japan-North Korea diplomatic normalization, economic normalization, arms reduction, and a peace treaty. In light of North Korea’s long-time position, North Korea will likely try to focus on the withdrawal of US troops and a US-North Korea peace treaty in exchange for the possibility of its denuclearization.

South Korea, China, and the United States should induce North Korea to focus on peace regime-building (and/or conditional economic benefits) unless North Korea advances well into the final stage of denuclearization. The conventional approach usually starts from a nuclear freeze and moves to disablement-dismantlement-verification, which does not seem workable anymore. Instead, a new kind of comprehensive approach is needed. North Korea should declare all its nuclear programs, then negotiate over conditions for their dismantlement, and quickly move to that with verification. We may divide it into two or three stages, but the most important thing is to get it verified and get it done completely. In addition, CVID should be accompanied by dismantlement of chemical and biological weapons and 1,000 short-to-mid-range missiles already deployed in North Korea.

Finally, a strategic point that requires common understanding among the two Koreas, China, and the United States is whether to separate the end of the Korean war declaration from a peace treaty. The Panmunjom Declaration (between the two Koreas) says, three or four parties will declare the end of the Korean War. In this vein, there was both good news and bad coming out of Secretary Pompeo’s visit to Pyongyang in July 2018. First, the bad news was that Pompeo was unable to win North Korean acceptance of final, fully verified denuclearization (FFVD). The good news was that he refused to accept North Korea’s demands for an official end of the war declaration before North Korea shows significant progress in denuclearization.

Overall, North Korea is likely to rely on the salami slicing tactics—separating the bilateral agenda into smaller pieces and maximizing its benefits for each concession—unless the United States can draw genuine support from South Korea and China. North Korea could try to dismantle inter-continental ballistic missiles (ICBMs) if it sees Trump getting impatient, thereby driving a wedge between the United States on the one hand and South Korea and Japan, on the other, who are more concerned about short-to-mid-range missiles than ICBMs.

The United States and South Korea, in particular, need to try their utmost efforts to agree on a detailed roadmap for FFVD and, if possible, persuade China to get on board so that China will delink the North Korean nuclear issue from US-China strategic competition. The core of the roadmap is the strategic framework to exchange FFVD with the peace regime for the Korean Peninsula, not just a peace treaty (or end of war declaration) alone. A premature declaration of the end of the war should be avoided since it could provoke unnecessary controversies over its political and legal impact on the US Forces Korea (USFK) and the alliance, let alone the United Nations Command. If North Korea agrees, the four parties, which include the two Koreas, the United States, and China, should start talking about the establishment of a peace regime on the peninsula by signing the declaration for the end of the war, done only when North Korea agrees to a specific timeline and roadmap of complete denuclearization.

The ROK-US Alliance and US-China Conflicting Visions

One of the differences between the United States and China in national power is that the United States still has its allies despite the end of the Cold War. Although Trump appears to be treating them harshly and taking a transactional approach, it does not mean he is gearing up to abandon them. He is rather focused on “burden-sharing” and “role-sharing” with allies, perhaps with a view to dealing with China, Russia, and Iran. US allies are not moving into an “alliance transition”¹⁰ in which they begin to defect to a potential hegemon China. They are criticizing US behavior, but they do not think of a radical strategic shift of making a coalition with China in the name of protecting the liberal international order or creating a new one. South Korea, a key US ally, is no exception.

South Korea’s strategic thought towards the United States has been evolving from a blood alliance during the Cold War era, to a transitional alliance during the post-Cold War era, and to a strategic alliance after September 11. Despite some trial and error, it has successfully adjusted to new strategic environments by transforming its alliance. As part of a “soft-balancing” strategy, this endeavor has been conducted in parallel with South Korea’s improved relations with China and its support for multilateral security cooperation so that the United States may not impose its own strategic preferences.¹¹ It could contemplate four scenarios for strategic thought toward the United States: 1) status-quo (maintaining a North Korea-oriented alliance); 2) ROK-US strategic partnership (dissolving a military alliance to move to a political alignment); 3) comprehensive alliance (going beyond military alliance and expanding it to regional and global cooperation); and 4) Northeast Asia multilateral peace and security mechanism. The Lee Myung-bak government chose the third scenario believing that South Korea, in keeping with Seoul’s interest in becoming a more prominent actor in the region, should play a more active role in peacekeeping, counter-terrorism, piracy and drug smuggling operations, and combating the spread of weapons of mass destruction (WMD).

The third scenario thus constituted the core of the Korean strategic thought toward the United States. President George W. Bush and Lee Myung-bak announced their vision of a “strategic alliance for the 21st century” at Camp David on April 18, 2008. This was confirmed by the Lee-Obama summit in April 2009,¹² and reconfirmed by the Park-Obama summit in May 2013. The strategic alliance for the 21st century means the alliance will go beyond the Korean Peninsula and expand its scope of cooperation to the Asia Pacific region and the global stage. With the military alliance at the center (particularly on the Korean Peninsula), the countries would closely cooperate on the basis of common values and create exchanges in politics, diplomacy, economies, and culture. These elements were reflected in the 2008 joint vision.

China does not see the ROK-US strategic alliance positively in light of its reaction when the joint vision was announced. China interpreted it as a “value alliance” that was aimed at imposing liberal democratic values on other countries including China. Another concern China might have is that the alliance would survive the denuclearization of North Korea. Even if the military component targeting North Korea can be reduced after denuclearization, the strategic alliance would continue with its political, diplomatic, and economic rationale that was already incarnated in the 2008 joint vision of the alliance. The implications of US-China rivalry for US-ROK alliance capabilities and rationales should be scrutinized. As discussed in the context of the end of the war declaration, China looks to the impact of the declaration on the alliance and the size and status of the USFK. The alliance should prepare for a power transition, managing changes in the relationship between an established and an emerging power. It is thus necessary to find the main factors likely to influence the durability of and potential stress points on the US-ROK alliance in the context of potentially shifting interests that might occur at various stages of a power transition (i.e., between the United States and China) from hypothetical challenge, to parity, and to transition.

However, a power transition from the United States to China will not take place in the foreseeable future. When Chinese GDP overtakes US GDP, it will have a psychological impact, but it does not mean US national power has been overtaken by China. What if China’s defense budget surpasses the US one in 2030 or 2045? Chinese military expenditures were expected to go ahead earlier since they include R&D, nuclear and missile-related budgets, subsidies for reserve forces and the military school, and think tank budgets. The United States had curtailed its defense budget for the next 10 years right after the financial crisis in 2007, while China was increasing its budget by more or less 12%. But the US economy quickly recovered, and the government is now increasing its military budget again.

It is important for the United States to show concern for its allies even though an “alliance transition” is not taking place. Alliance transition usually precedes power transition. China might try to drive a wedge between the United States and its allies in Europe and East Asia by taking advantage of Trump’s bad management of allies. The ROK-US alliance and the US military presence on the Korean Peninsula should be understood in this context. The United States should well maintain its allies and potential allies if it wants to maintain the US-led order in the Asia Pacific region for a long time. The strength of alliances remains critical, but these must not be taken for granted at a time of new stress and Beijing’s attempts to undermine them.¹³

Korean Unification and US-China Bilateral Complexity

What are the challenges and opportunities of Korean unification for China and the United States? China will have to weigh the costs and benefits of Korean unification. On the negative side: 1) China will lose the presence of North Korea as a “buffer” between China and the United States in Northeast Asia; 2) a potential alliance relationship still contains uncertainties, especially given the presence of foreign troops on a unified Korea so close to the Chinese border; and 3) China will face the emergence of a country that could powerfully project democratic values—in the popular and cultural form of hallyu, or “Korean wave,” which refers to the rise in popularity of South Korean culture since the late 1990s—onto the Chinese heartland. On the positive side: 1) China will be relieved from the burden of economic aid and military assistance for North Korea; 2) China will become free from the danger of military clashes and war involving North Korea that it considers to be against its own interests; and 3) China will be able to play a stronger leadership role in the Northeast Asian economic integration process. Whether China will cooperate with unification depends on the diplomacy of South Korea and the United States to convince China that the benefits outweigh the costs.¹⁴

Korean unification has also pluses and minuses for the United States. On the plus side, if it occurs in a manner many in South Korea anticipate: 1) it will expand liberal values to the whole peninsula; 2) it will remove a challenge for the global non-proliferation regime; and 3) Korean unification will provide the United States with an opportunity to develop a cooperative and healthy relationship with China. On the negative side: 1) Korean unification could weaken the rationale for a US military presence on the Korean Peninsula; 2) Korea–China cultural affinity could weaken the Korea–US alliance; and 3) multilateral institutionalization in Northeast Asia could sideline the United States.¹⁵

The United States and China are likely to see, however, more costs than benefits when they intensify their competition on the Korean Peninsula and in East Asia, which will work against unification. If this occurs, the best environment for Korean unification is a situation in which the United States maintains the upper-hand while sustaining its competitive and cooperative relationship with China. The worst environment would be a situation in which the power transition to China has taken place or is very close when an historic opportunity comes for Korean unification. In this case, neither the United States nor China can control the extremely unpredictable situation, which might lead to another division of the Korean Peninsula.

China would try to send its own troops into North Korea when the UN resists China’s request for joint operations in the event of a North Korean contingency. Whether China does so depends on its relationship with the United States since the North Korean contingency would require close official cooperation between China and the United States. On the US side, it would consult with its allies (South Korea) and key major powers (China) about whether the intervention would be necessary, and it would be led by the UN or the United States which would give top priority to locating North Korea’s WMD. Anyway, the United States will try to call for the UN to step in to undercut any independent Chinese action.

Paradoxically, a variable that could be more important than US-China relations will be South Korea’s determination and preparedness for unification. When the South Korean government shows indecisiveness and incapability in dealing with the North Korean contingency,¹⁶ the United States and China would likely “collude” with each other to stabilize the situation and maintain the status quo rather than helping South Korea to take control of the path toward unification. The unification process might pose a serious challenge, with US-China collusion, if South Korea is not properly prepared. This means South Korea’s strategic incapability might contribute to making those two giants cooperate over keeping the status quo on the peninsula.

Three-way Strategic Considerations

There are two schools of thought in South Korea’s security community: the concert of Asia and the US-led Asian order. The school of concert of Asia believes that great power relations surrounding the peninsula are reminiscent of great power politics in 19th century Europe. The 100 years of peace in Europe between the Vienna Convention (1815) and WWI (1914) were attributed to the Concert of Europe among the United Kingdom, France, Prussia, Austria, Italy, and Russia. Contemporary international relations of Asia are similar, and the concert of Asia should be established, supporting multilateral cooperation among major powers. In contrast, the school of US-led Asian order believes that a multipolar system is inherently unstable. The United States has been playing a stabilizer role through its military presence in Asia since the end of the Pacific War. Its withdrawal would lead to the unstable multipolar system in which major powers will be involved in unlimited power competition without converging on a stable international order.

The “progressive” Moon Jae-in government tries to strike a balance between the two schools, emphasizing close coordination between Seoul and Washington while supporting the establishment of a multilateral peace and security cooperation regime in Northeast Asia.¹⁷ China has been recognized as the champion of multilateral cooperation mechanisms in East Asia since the late 1990s, but it refused to participate in NAPCI (Northeast Asia Peace and Cooperation Initiative), a multilateral security cooperation forum hosted by the Park Geun-hye government, particularly after South Korea and the United States had decided to deploy the THAAD system (designed to shoot down short, medium, and intermediate-range ballistic missiles using interceptor missiles, launchers, a radar, and a free-control unit) in South Korea on July 8, 2018. This shows that a multilateral security cooperation mechanism cannot be institutionalized when there is a conflict of strategic interests between China and the United States.

From the South Korean viewpoint, the ROK-US military alliance is a vital strategic tool for its security, defense, and even Korean unification, but it is not a sufficient condition for South Korea’s security, defense, and unification. China and South Korea should talk to each other more often and closely, first of all focusing on denuclearizing of North Korea. Then, China and South Korea should discuss how to establish a multilateral security cooperation mechanism in Northeast Asia while South Korea and the United States discuss how to transform the ROK-US alliance if North Korea accomplishes denuclearization. In addition, South Korea and China should talk about how to integrate Northeast Asian economies after denuclearization. They do not have to exclude the United States from their vision of economic integration. “Strategic dialogue” between South Korea’s national security advisor and his Chinese counterpart should be institutionalized. In addition, 1.5-track strategic dialogue involving experts from both countries should be activated. In order to assuage the perception that ROK-China strategic discussions are overtly focused on political issues, they could expand the framework to resemble the “Strategic and Economic Dialogue” between the United States and China. Some may doubt that China is amenable to these ideas.

Conclusion

Two suggestions can be proposed under the premise that China, the United States, and South Korea can reduce challenges and promote opportunities for peace and prosperity in Northeast Asia. First, China needs to be discouraged from looking at North Korea through the angle of China-US strategic competition. As long as it continues to do so, the issue is inevitably linked with Taiwan and the East and South China Sea issues, which makes the North Korean issue a permanent conundrum. The North Korean issue should be separated from other issues, and China should show its sincere efforts for North Korean denuclearization. Nuclear-free North Korea will provide China with the historic mission of integrating Northeast Asian economies, the process of which will be very beneficial to China as well as others.

The United States should remain as the champion of the liberal international order of free trade, multilateralism, and alliances. The threat against the liberal international order is now coming from within, as well as outside, the United States. It is time for the United States to refurbish its leadership unless it can provide an alternative to the liberal international order. This process can be started by treating China as a strategic partner rather than branding China as a revisionist state. They have to revitalize their strategic dialogue on security and trade issues and jointly promote the regional and multilateral mechanisms such as the East Asian Summit (EAS), Asia Pacific Economic Cooperation (APEC), ASEAN Regional Forum (ARF), and ASEAN Defense Ministers Meeting (ADMM) Plus. This would be a better way for making the United States great again and making its key allies such as South Korea more committed while containing China within the rule-based international order.

At the moment, Sino-US relations are not giving South Koreans much reason for optimism that they will put aside other issues dividing them and find common cause on North Korea or, even if they could somehow manage to do so, that they would prioritize their common interests in dealing with North Korea. The region is thus at a crossroads, and the Moon government has taken the initiative, which, naturally, leads South Koreans to urgently consider how it could be sustained.