[Inside Chodong] Can the Korea-China Honeymoon Return?

Tightly Interwoven Industrial Supply Chains
A Need for New Strategic Cooperation Approaches

"Over the past 30 years, Korea-China relations can be considered one of the best periods in our 5,000-year history. We experienced a kind of honeymoon phase while benefiting from globalization. Now, we are in a challenging period. We need to find new cooperation methods reflecting the changed conditions both internally and externally."

Professor Lee Hyun-tae of the Department of Chinese Language and Chinese Studies at Incheon National University emphasizes the importance of economic exchanges between Korea and China whenever he meets officials responsible for trade affairs or public diplomacy policies toward China. This is because he vividly remembers the time when both countries closely coordinated by fully utilizing each other's strengths, increasing trade across economic and industrial sectors, and fostering a friendlier relationship than ever before. Since the establishment of diplomatic relations with Korea in 1992 and China's rapid economic growth after joining the World Trade Organization (WTO) in the 2000s, we have directly and indirectly benefited and thus grew closer.

Now, after about 30 years, which can be considered a generation, the situation is not easy. The United States regrets having brought China onto the global stage but knows it cannot be undone. It openly pressures China under the pretext of economic security, excludes Chinese products, and urges its allies to join. Since Korea and China have tightly intertwined private-sector exchanges, including supply chains across industries, like lifelines, Korea is reluctant to join the US-led 'Down with China' movement. Nevertheless, what choice is there? Having become true allies through the Korean War, Korea cannot refuse the US, nor does it have the power to do so.

The change in Korea-China relations is not only due to external conditions. It is also influenced by China's improved technological capabilities in producing various intermediate goods used in final products, such as petrochemical products, displays, and substrates. China has reached a level where it can self-supply intermediate goods. This means the traditional manufacturing division of labor?importing Korean intermediate goods to produce final products domestically and exporting them worldwide?is gradually breaking down. The iPhone, which clearly illustrates the 21st-century global division of labor, struggling within China, is a stark example of this trend.

Not only smartphones but also automobiles have reached a level of self-sufficiency. While China attracted leading Western automakers and Japanese and Korean car companies in joint ventures without fully mastering the technology, the rapid shift to electrification has drastically changed the situation. Chinese electric vehicles have gained a competitive edge, and it has become nearly impossible to manufacture electric cars without engaging with the Chinese battery ecosystem. Beyond producing and exporting electric vehicles worldwide, foreign automakers now seek the know-how and value chains of Chinese electric vehicle companies.

Professor Lee calls the future Korea-China relationship a 'challenging period' because there is a strong need to rebound from a peak and downturn phase. Even in the US, protectionist trends are rising, and the global trade order is becoming fragmented, which is a bad sign for Korea, a country dependent on trade, no matter how it is interpreted. If returning to the past cooperation model is impossible, it is time to consider new, more strategic approaches. One of the strategies Professor Lee proposes is playing a buffering role amid the confrontation between major powers. For example, Korea could signal its willingness to create space for China within the US-led semiconductor alliance 'Chip 4.' Acting as a mediator that preserves the dignity of both sides rather than being swayed by the US-China hegemonic competition does not seem like a bad idea.

This content was produced with the assistance of AI translation services.