South Korean President Moon Jae-in’s visit to Australia on December 12-15 revealed a vast discrepancy between Seoul and Canberra’s strategy toward the intensifying U.S.-China competition. During a press conference on December 13, Moon stated that South Korea was not considering participating in the diplomatic boycott of the 2022 Beijing Winter Olympics, whereas Australian Prime Minister Scott Morrison said Australia is seeking “rule of law and free and open Indo-Pacific,” criticizing China’s behavior in the South China Sea.
Although a Blue House official stated that the decision about a diplomatic boycott is yet to be made, Moon’s account highlighted the difference between Australia and South Korea in handling the rise of China. While the two countries are both U.S. allies with strong economic ties with China, South Korea has shown a stronger resistance to joining the boycott movement. Australia, on the other hand, made a quick decision to boycott the Olympics on December 8.
Australia’s boycott aligns with the United States’ emphasis on human rights and democracy amid bitter China-U.S. relations. On December 7, the U.S. decided not to send any official delegation to Beijing in February 2022 due to China’s human rights record in Xinjiang. The U.S. diplomatic boycott of the Olympics was followed by action from its traditional allies – Australia, Canada, New Zealand, and the United Kingdom – indicating that the recent escalation of political and economic strife between the U.S. and China has expanded to the diplomatic boycott movement of the sports events, similar to the boycotts of both diplomatic delegations and athletes at the 1980 Moscow and 1984 Los Angeles Summer Olympics during the Cold War. In response, China criticized the U.S.’s decision as “politicizing sports.”
Ironically, South Korea’s hesitation about boycotting is highly intertwined with political and economic motives. First, South Korea has experience with Chinese sanctions from past diplomatic friction with China. Beijing’s sanctions against South Korea after its deployment of Terminal High-Altitude Area Defense (THAAD), a U.S. missile defense system, in July 2016 show how China can weaponize its economic leverage against neighboring states. Chinese tourism to South Korea and the import of Korean cultural products – including movies and cosmetics – were prohibited, resulting in an 18.7 trillion Korean won ($15.7 billion) loss to the South Korean tourism industry. The fear of further sanctions has since constricted South Korea’s approach toward China.
Second, South Korea’s economic dependence on China undermines its diplomatic assertiveness against Beijing. According to the Korea Institute for Industrial Economics and Trade (KIET), 1,088 types of imported goods are considered vulnerable to Chinese sanctions. Many of these materials, including lithium and magnesium, are crucial to South Korea’s main industries, such as semiconductors, steel, shipbuilding, and batteries. In other words, China can utilize raw materials to assert political leverage over South Korea.
China’s leverage over South Korea’s raw materials supply could be observed in the urea shortage incident in October 2021. Urea is a substance that can break down nitrogen oxide pollutants produced from diesel engines into nitrogen, carbon dioxide, and water. Due to its environmental friendliness, Selective Catalytic Reduction (SCR) facilities, which require urea for the engines to function, are widely used in automobiles with diesel engines to reduce nitrogen oxide pollution. Since South Korean environmental regulations also require diesel freight vehicles use SCR engines and urea to reduce exhaust emissions, urea became necessary for the country’s domestic transport industry, and 97.6 percent of it was imported from China. Thus, after China locked up urea exports in October 2021, trucks in South Korea stopped their operations, and the country’s domestic distribution network was driven into crisis. Hence, fully aware that further Chinese supply-chain or import lockdowns could render South Korea’s industries powerless, South Korean politicians are wary of provoking any strife with Beijing.
Furthermore, the Moon administration’s desire to formally end the Korean War with North Korea requires China’s strong support. Moon has been promoting the cessation of the 70-year-long Korean War as a starting point to the denuclearization of North Korea. For the Moon administration, the upcoming Olympics is an opportunity to revive inter-Korean dialogue, much like the 2018 PyeongChang Winter Olympics, which led to three inter-Korean summits. As China was one of the participants of the Korean War, the Moon administration hopes to confirm China’s support for peace on the Korean Peninsula. Boycotting the Olympics while seeking an end-of-war declaration would be counterproductive and irritate China.
For these reasons, China offered South Korea various “carrots” to secure its attendance. A South Korean film was released in China in December for the first time since the THAAD deployment, implying Beijing’s willingness to lower its sanctions against Korean cultural products. Yang Jiechi, a member of the Chinese Communist Party’s Politburo, stated his support for the end-of-war declaration as “promoting peace and stability on the Korean Peninsula” and also pledged to cooperate for the supply of raw materials to ensure “stable communication on regional and global industrial supply chains.” Neglecting these offers and stepping away from Beijing would be burdensome for South Korea.
Nevertheless, South Korea’s ambiguous stance between the U.S. and China may also cause problems for its long-term diplomacy. If South Korea does not manage to overcome its economic dependence on China, its diplomacy will gradually lean toward China and potentially isolate Seoul from other liberal democratic nations. South Korea may even be viewed as “favoring” the Chinese authoritarian regime, which will hurt its status as one of the few East Asian full democracies.
Moreover, relying on China for the denuclearization of North Korea may marginalize the ROK-U.S. alliance. While China does play a crucial role on the North Korea issue, South Korea must also consider the importance of deterring further North Korean nuclear armament and provocations before initiating any peace process. A reliable peace process requires solid security engagement with the U.S. and declaring peace on the Korean Peninsula without such efforts will only give North Korea and China the means to undermine U.S. relevance in the region.
South Korea’s “China conundrum,” therefore, will persistently cause a headache for its decision-makers. As seen in Seoul’s reaction against boycotting the Beijing Olympics, South Korea’s geopolitical location and China’s increasing political and economic leverage will constrain it from keeping pace with its democratic allies. Meanwhile, the public’s increasing anti-China sentiment and an approval rating of 50.9 percent for a diplomatic boycott add another concern for Seoul as it prepares for the next presidential election in March. Seoul will need to start finding the answers to the dilemma of “whether to hedge or to choose” between the U.S. and China.
This article was originally published on New Perspectives on Asia from the Center for Strategic and International Studies and is reprinted with permission.