Key Takeaways

-  As South Korea hosts APEC 2025 in Gyeongju, it faces both a rare diplomatic opportunity and a major test amid intensifying US-China rivalry.

-  The anticipated Xi-Trump meeting and Xi’s strategic use of APEC highlight the forum’s growing political symbolism and its potential to stabilize great power relations.

-  For Seoul, APEC 2025 is a chance to demonstrate middle-power diplomacy—balancing relations with Beijing and Washington while promoting multilateral cooperation in an era of geopolitical uncertainty.

As South Korea prepares to host the Asia-Pacific Economic Cooperation (APEC) forum in Gyeongju from October 31 to November 1, the stakes are unusually high. The expected attendance of China’s top leader Xi Jinping, and his anticipated meeting with US president Donald Trump, injects geopolitical uncertainty into what is traditionally a forum for rather predictable economic dialogue. For Seoul, this is a rare opportunity to shape the regional narrative amid international volatility. To seize it, however, South Korea must navigate serious challenges—not only strained China-US relationship and Trump’s tariff agenda, but also its own tensions with Beijing.

APEC’s Political Significance

APEC is often dismissed as a technocratic platform narrowly focused on trade liberalization and capacity building. Yet, its very structure—voluntary cooperation among 21 economic powerhouses across the Asia-Pacific—makes it a unique space for shaping norms and expectations. It represents a model of cooperation based on economic partnership rather than military alliance, aligning with China’s preference for economic engagement without security commitments. It also highlights the role of the United States as a major economic partner in the region, not solely a security provider.  But APEC does not only suit the preferences of great powers—it also reflects the interests of middle powers like South Korea, which seek to preserve multilateralism in a way that isn’t anchored to either side amid intensifying China-US competition.

Compared to platforms led by the Association of Southeast Asian Nations (ASEAN), APEC includes a much broader range of Pacific nations and uniquely brings together the United States, China, Russia, and Taiwan (in the name of Chinese Taipei), making its vision of the region more inclusive. A decade ago, their co-existence within APEC was unremarkable. Today, it is extraordinary. For better or worse, the summit’s political symbolism has grown in tandem with global instability.

Xi’s Strategic Calculus

Xi is expected to attend APEC. South Korean President Lee Jae-myung’s decision to send a special envoy to personally invite Xi underscores Seoul’s desire to stabilize relations with Beijing, which have been strained in recent years. For China, participation in APEC is not just about trade—it is an opportunity to present itself as a responsible driver of regional growth and a leader in global governance.

In Xi’s 2025 New Year speech, APEC was one of only five international platforms he namechecked when talking about China articulating its positions and shouldering global responsibilities.

At the 2024 APEC summit in Lima, Xi described APEC as an “incubator” for global trade rules and a vehicle for green and digital transformation. His speech emphasized inclusivity and support for emerging economies. His written address to business leaders at the same summit reinforced these themes, highlighting shared interests in economic growth and sustainability. These ideas have gained added significance in light of Xi’s launch of the Global Governance Initiative September.

At a deeper level, however, APEC and China are not a perfect match. China’s model of “socialist market economy” blends state steerage and supervision by the Chinese Communist Party with market competition, challenging the neoliberal free-market principles that once defined APEC. Yet in an era of securitization and economic fragmentation, the neoliberal model is already fading. Although not all APEC member states embrace Xi’s vision of free trade—one in which China holds significant leverage—Trump’s attack on free trade and overt unilateralism have created an opening. APEC offers Xi a timely opportunity to legitimize China as a defender of economic globalization and multilateralism, in contrast to America.

Importantly for Beijing, the long form of APEC is “Asia-Pacific Economic Cooperation,” not “Indo-Pacific”—a term associated with US-led strategic competition against China. Beijing avoids the Indo-Pacific label, viewing it as a containment framework. APEC’s economic focus allows China to engage with the region without confronting the security narratives that dominate other platforms—especially as many states remain deeply concerned about Beijing’s grey zone tactics in disputed territorial claims.

The Xi-Trump Meeting

The anticipated meeting between Xi and Trump on the sidelines of APEC has become the forum’s most closely watched event. The two leaders have not met face-to-face since 2019, and the post-Cold War era of US “strategic engagement” with China has given way to deep mistrust and hostility. On October 9, China announced sweeping new export controls on rare earths critical to high-tech manufacturing—an escalatory move that positions Beijing as an indispensable global gatekeeper in artificial intelligence and semiconductor development. Just a day later, Trump hit back with a retaliatory move: a 100% tariff on Chinese imports, set to take effect on November 1—the final day of the APEC summit. The sudden collapse of their tariff truce, brokered in Madrid, added urgency to the anticipated Xi-Trump meeting in South Korea.

The China-US rivalry has had global repercussions. Beijing’s recent retaliatory restrictions on rare earth exports, in response to Trump’s tariffs, disrupted global supply chains and impacted industries in third countries.

Despite the latest escalation over Chinese rare earths and US tariffs, the good news is that there are encouraging signs in the lead-up to APEC. A phone call between Xi and Trump in September led to a TikTok deal in America approved by both sides and a high-level visit to China by a US congressional delegation. These developments underscore APEC’s potential as a platform for reaching political understanding—without which any agreements on economic cooperation are likely to be short-lived.

South Korea, as host, can leverage this moment to rally other APEC members in urging Beijing and Washington to stabilize their relationship. With the other economies present, Seoul can amplify the international community’s expectations for civility, dialogue, and coordination between the two great powers. This could be middle-power diplomacy at its best—using multilateral forums to work with other countries to collectively shape great power behaviour in the interest of the wider international community.

The Strategic Complexity of China-Korea Relations

To achieve these potentials, Seoul must navigate its tensions with Beijing. China’s relationship with South Korea has been rocky. The 2017 THAAD missile defense dispute and the 2023 verbal spat over Taiwan notably strained ties. Lee has adopted a cautious approach, balancing engagement with America and China. His recent summits with Japan (August 23, 2025) and the United States (August 25, 2025), flanked by a special envoy’s visit to China (August 24, 2025), reflected efforts to improve relations with Beijing while deepening strategic cooperation with Tokyo and Washington.

China shares South Korea’s interest in stabilizing ties. Seoul is a high-value target for Beijing due to its economic and technological clout, strategic location, and centrality in the US-led regional security architecture.

Xi’s June 2025 remarks urging Seoul to elevate its “strategic cooperative partnership” with China and reminding Lee that “China and South Korea are close neighbours that cannot be moved away” can be understood in the context of Korea-US relations. While the United States remains Seoul’s key ally, its commitment to South Korea is ultimately contingent; by contrast, China’s proximity to South Korea is permanent. The implication of Xi’s comment is clear: it is in Seoul’s interest to maintain stable ties with Beijing, even if doing so complicates its alliance with Washington.

This sentiment was echoed by Chinese foreign minister Wang Yi in September, who urged Seoul to be a partner “not only in name but also in substance.” Chinese media have been more blunt, criticizing Lee’s doctrine of “pragmatic flexibility” as “double-faced.” While China tolerates Seoul’s tilt towards Washington and Tokyo, it warns against hostility—particularly in the form of trade or tech restrictions and any deviation from Beijing’s stance on Taiwan, which Xi has called the “core of the core” of China’s interests.

Although Beijing frames Seoul’s unwelcome actions as pandering to Washington, South Korea’s own competitive economic advantages and concerns about Chinese economic coercion also limit deeper economic integration with China. A recent statement by a senior South Korean official, which rules out the discussion of Seoul’s role in a potential Taiwan conflict at the first Trump-Lee summit, respected Chinese sensitivities. However, given that Beijing’s takeover of Taiwan would destabilize the US-led regional security architecture—on which South Korea’s security heavily depends—and could embolden North Korean opportunism, Seoul’s position on the Taiwan question remains strategically complex.

China’s growing ties with North Korea add another layer of complexity. Xi’s hosting of Kim Jong-un at Beijing’s military parade and frequent high-level exchanges signal deepening coordination. South Korea’s efforts to engage Pyongyang will falter without Beijing’s support, underscoring the strategic importance of maintaining a functional partnership with China.

Conclusion: Diplomacy in an Age of Geopolitical Uncertainty

This is not a moment to fundamentally shift from great power competition to global cooperation—the conditions aren’t yet in place. But it is an opportunity to use multilateral institutions to contain the risks of rivalry and remind great powers to consider the interests of others. South Korea should seize its role as APEC host to shape the regional agenda, steering Xi and Trump towards recognising the broader costs of escalation and promoting responsible management of their rivalry.