► South Korea, in addition to dealing with divided nation politics and a belligerent North Korea, faces a complex strategic landscape, especially because the United States is its security ally while China is its number-one trading partner.

► The opportunity costs of strained relations are increasing, and strategists in Beijing should be concerned that South Korean sentiments toward China have deteriorated. 

► Improving China-South Korea relations is less about what either government needs to do and more about making a strategic decision to stop the situation from getting worse. Progress in bilateral affairs is possible if both sides practice diplomatic prudence and restraint. 

As government officials in Seoul and Beijing démarche each other for alleged diplomatic offenses, analysts claim bilateral relations are the victim of U.S.-China strategic competition and worsening South Korean public opinion. However, it would be a cop-out for policymakers to resign themselves to such explanations. Rivalry between Washington and Beijing is a structural feature of international politics that is not going away anytime soon, and South Korea is a dynamic democracy with public opinion sensitive to current events. Improving bilateral relations does not require developments so dramatic as a change in government leadership or major policy reversal. Rather, each side can show it values cooperation with the other by making honest efforts at preventing relations from getting worse.

South Korea, in addition to dealing with divided nation politics and a belligerent North Korea, faces a complex strategic landscape, especially because the United States is its security ally while China is its number-one trading partner. South Korea needs China not only for trade but also to help deal with North Korea. But South Korea is also important to China economically and for stability in Northeast Asia. The opportunity costs of strained relations are increasing for both sides, and strategists in Beijing should be concerned that South Korean sentiments toward China have deteriorated to the point of being nearly 90% negative. Making progress in bilateral affairs is possible if both sides practice diplomatic prudence and strategic restraint.

A first step could be quiet resolution of the THAAD missile defense dispute. Seven years ago, China placed restrictions on Korean companies and products in retaliation to South Korea exercising its sovereign right to host a U.S. missile defense system to counter the growing North Korean missile threat. China’s coercive measures failed and have been partially rescinded. There would be few domestic political costs if Beijing lifted the remaining restrictions, and once Koreans see Chinese citizens again enjoying K-pop, K-dramas, and K-beauty products, mutual perceptions will receive a positive boost.

There are other bilateral controversies involving historical and cultural appropriation, from the Kingdom of Goguryeo to kimchi and hanbok to accounts of the Korean War. But these can be managed if both sides keep cyber nationalism from boiling over. The contested status of Ieo-do, a submerged rock between the two countries, is not as significant as the territorial disputes South Korea and China have with other countries. More important to bilateral relations are maritime safety, air defense identification zone (ADIZ) unannounced entries, exclusive economic zone (EEZ) incursions, and illegal fishing. The two sides are capable of handling these issues with a bit more restraint and better working-level communications. 

China and South Korea’s economies used to be more complementary, but as Chinese firms climb the value chain, they become more competitive and take a bite out of the exports of Korean companies. Nonetheless, there are still significant trade and investment ties and future opportunities between the two countries. With the lifting of China’s zero-Covid restrictions, economic activity will gradually rebound, albeit in fits and starts. Tourism, as well as cultural and educational exchanges, can also be expected to pick up. The resumption of mutually beneficial interactions, many of which were interrupted by the pandemic, will give Korean and Chinese citizens a sense of rapprochement between their countries.

Seoul is under political pressure from domestic conservatives and the Biden administration to decouple from China in terms of high-tech industries. Recent U.S. export controls and reshoring efforts, including the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act and the Inflation Reduction Act (IRA), are influencing business decisions. But South Korean leaders, like other U.S. allies in Europe and Japan, only look to de-risk supply chains and build economic resilience because they see a full decoupling from China as economically damaging, politically counterproductive, and practically impossible. Samsung Electronics and SK Hynix may actually increase market share in China. Meanwhile, Beijing is actively attempting to increase its high-tech autonomy, so de-risking need not be a dealbreaker for South Korea-China economic relations.

However, leaders in Beijing have serious concerns about the strengthening of U.S. alliances in Asia and see various countries’ Indo-Pacific strategies as efforts to counter, contain, and encircle China. When President Yoon Suk-yeol said peace and security in the Taiwan Strait is a global issue like North-South Korean relations, it prompted a flurry of Chinese criticism. Yet, South Korea’s Indo-Pacific policies are actually measured and restrained. If the threat environment around Taiwan abates, officials in Seoul will say less about issues Beijing considers matters of sovereignty and non-interference.

South Korean governments usually do not criticize China regarding Xinjiang, Hong Kong, Tibet, or human rights in general, but the current Yoon administration is more vocal than prior administrations regarding North Korean human rights. Chinese officials could show greater consideration of the circumstances of North Korean refugees in China that Beijing has so far treated as illegal economic migrants and sometimes repatriated in contravention of international commitments.

Officially, China and South Korea share similar priorities regarding North Korea, including avoiding war, maintaining stability, calling for denuclearization, offering humanitarian assistance, and encouraging economic reforms. In practice, leaders in Beijing are critical of South Korea’s military modernization and international defense exercises to increase deterrence against North Korea’s growing nuclear and missile threats. Meanwhile, South Korea is critical of China’s enabling of the Kim regime’s norm-violating behavior. Yet, Seoul does not expect Beijing to solve the North Korea problem. Instead, South Koreans hope China would uphold its responsibilities as a permanent member of the UN Security Council. The Yoon administration has implied that if China’s leaders do not want South Korea doing more with the U.S. and Japan for regional security, they should stop obstructing Security Council action on North Korea and implement UN sanctions.

Finally, relations would visibly improve if Xi Jinping made a long-withheld visit to Seoul. New trade and investment deals could be signed, and expanded military exchanges announced. The two countries could also pledge to increase cooperation on transnational issues such as public health and climate change. The symbolism of pulling back from “wolf warrior” rhetoric and treating neighbors with mutual respect would elevate public sentiments and bilateral interactions.

Many in Seoul and Beijing appear to have given up on repairing ties for now, but this is a mistake. With diplomatic prudence and restraint, the two neighbors can prevent further deterioration in relations and demonstrate genuine commitment to cooperation. The above discussion should not be seen as a list of demands by one side of another. At this juncture, improving China-South Korea affairs is less about what either government needs to do and more about making a strategic decision to stop the situation from getting worse.