Moving On: China Resolves THAAD Dispute with South Korea

South Korea’s decision to deploy the Terminal High Altitude Area Defense (THAAD) system has been a thorn in Beijing’s side for over a year. Sensitivities over the THAAD system’s radar capabilities led China to impose harsh sanctions on South Korea’s tourism sector and on key conglomerates, including (especially) the Lotte Group. Consequently, the recent resolution of this bilateral row has come as something of a surprise.

While the timing was unexpected, Beijing stands to benefit from a compromise on this issue at least three major ways. First, the agreement provides assurances from Seoul about China’s strategic position in the region. Second, the rapprochement between China and South Korea creates a better political environment for Beijing to deal with the current North Korea crisis. Finally, the agreement allows China to frame itself as the responsible power in the region while Trump is on his Asian tour.

Strategic Reassurance

Although Beijing failed to prevent South Korea’s deployment of THAAD altogether via unilateral sanctions and political pressure, the new agreement got Seoul to publically state it would abide by three “no’s”: 1) no additional THAAD deployments in South Korea; 2) no participation in a US-led strategic missile defense system; and 3) no creation of a ROK-US-Japan trilateral military alliance. In essence, South Korea agreed to at least symbolically distance itself from a US-led strategy of containing China. Seoul left itself some wiggle room on these “no’s,” but this agreement may be somewhat dissatisfying in Washington. US National Security Adviser H. R. McMaster welcomed the Sino-ROK detente, but he also hinted at US concern over South Korea’s possible decoupling from American-led security structures, saying that he does regard the three no’s as “definitive” in terms of official policy.

Coming in from the Cold

In addition to strategic assurances, the new agreement also provides Beijing with a long-term basis from which to engage Seoul on quite positive terms. Historically, Korea has been a buffer state within China’s security perimeter. The Middle Kingdom was deeply involved on the peninsula and fought multiple wars to prevent Korea from falling under the influence of foreign powers. The sidelining of Beijing in the past year-plus has been dramatic and troubling to the Chinese leadership. During the current nuclear/missile crisis, China had managed to isolate itself completely and dramatically from meaningful dialogue and influence in both the ROK and DPRK. Beijing’s Korea policy had been adrift. As tensions have risen in the region, there has been great public debate among Chinese scholars, with many calling for the restoration of a functional partnership with at least one of the Koreas.

Part of that debate has acknowledged the deterioration of Sino-DPRK relations since Kim Jong Un has come to power, lending credence to the idea that mending relations with Seoul was simply the “easier fix.” After all, Pyongyang welcomed Xi to office with a nuclear test and then a few months later executed Beijing’s preferred North Korean interlocutor: Kim Jong Un’s uncle, Jang Song Thaek.

Beijing’s response to these initial moves by Kim Jong Un was to give Pyongyang the cold shoulder. After taking office in 2013, President Xi Jinping broke tradition and visited Seoul before visiting Pyongyang, meeting South Korean President Park Geun-hye in July 2014. He has yet to visit Pyongyang or meet Kim Jong Un and has also repeatedly snubbed Kim’s special envoy to China, Vice Marshal Choe Ryong Hae and kept Chinese high-level visits to Pyongyang to a minimum. By contrast, Park was, for instance, enthusiastically welcomed in Beijing for 2015’s World War II celebrations, had one-on-one talks with Xi, and was given a prime seat on the dais to view a military parade—a position, ironically, that was historically reserved for Pyongyang’s leaders.

In many ways, closer ties with Seoul were seemingly to compensate for the “loss” of Pyongyang, but after the ROK’s deployment of THAAD and then Park’s impeachment, China was left with nothing to show for its shift. Beijing overreached in making THAAD a make-or-break issue for bilateral relations and risked pushing Seoul closer to the United States through its informal sanctions on South Korean companies.

China: The Responsible Stakeholder

Beijing now hopes to exploit growing suspicion in South Korea regarding the Trump administration’s management of the US-ROK alliance by putting the THAAD issue to bed. According to a poll conducted last year by the Institute for Peace and Unification Studies at Seoul National University, most respondents ranked the US as the country they felt closest to (73.8 percent). Only 10.8 percent chose North Korea as the closest country followed by China at 9.7 percent. (Japan came in at 5.2 percent and Russia barely registered in the Korean imagination, at 0.4 percent.)

However, since Donald Trump came to office, South Koreans have grown concerned over the state of the alliance and their relationship with the United States. A Pew Research Center poll conducted in June—before the crisis intensified and became personal—found that only 17 percent of Koreans trust Trump and only 18 percent thought he was qualified. Moreover, as articulated by protesters during Trump’s visit to Korea, there is a growing concern among the South Korean public and government that the current US approach toward North Korea could draw the region into a costly war.

Through this new agreement over THAAD, Beijing and Seoul have now formed something of an “axis of peace,” making room for cooperation against what they view as an unnecessarily risky approach to North Korea’s nuclear program development from Washington. This could restrain the US at some point if the Trump administration fears its hard line could leave it isolated from other actors in the region. Indeed, the resolution of the spat allows Beijing to broadly frame itself as the cooperative power on the Korean peninsula.

The closing of the THAAD file between China and South Korea also puts Beijing in a stronger position vis-à-vis the United States as Trump conducts his nine-day Asia tour, visiting Japan, South Korea, China, Vietnam and the Philippines. The United States is expected to press China on trade issues primarily, but Trump will surely also discuss Beijing’s cooperation on North Korea sanctions implementation and the South China Sea. He almost certainly would have touched on China’s treatment of South Korea over THAAD as well. In response, Beijing can point to ample evidence that it is “doing more” to enforce UN sanctions more rigorously and it has now suddenly removed the friction of its unilateral sanctions against South Korea. This should make discussions with Trump easier.

Following the “China Sanctions” Playbook

Finally, there is also precedent for Beijing wanting to wrap up spats after a period of applying informal sanctions. China is not generally interested in allowing these punitive measures to create long-term damage to bilateral economic ties. Encouraging boycotts for too long disrupts the complex production chains that drive Chinese economic growth. Moreover, China doesn’t want to harm global economic growth, which becomes a concern during spats between major trading nations.  In this sense, Beijing may have decided that it had made its point over THAAD and that its interests would now be better served by improving relations with Seoul in order to help deal with the North Korea crisis in the coming months and push back against US strategic designs on the region in the coming years. Indeed, depending on how the crisis plays out, those concerns may overlap.

Author’s Note: apologies for violating the informal rule that something about Chinese characters for opportunity/crisis is supposed to be included in an article like this.