When South Korea’s president, Yoon Suk-yeol, entered office last year, the odds rose that a frostier bilateral relationship with China might take hold. After all, Yoon on the campaign trail talked tough on China, and conservative South Korean politicians typically deepen the US alliance and are suspicious of Chinese support to the Democratic People’s Republic of Korea (DPRK or North Korea). Even despite the growing closeness of DPRK-China ties, Yoon has been able to effectively manage his government’s relationship with Beijing, potentially setting a template for how other small and medium-sized nations might do the same.

Yoon’s Carrots and Sticks ApproachIndeed, as I have previously argued, Yoon and his government, to some extent, have taken a harder line on China. For example, Yoon became the first South Korean leader to attend the North Atlantic Treaty Organization (NATO) Summit, during which he criticized not only Russia, but China as well. In April, before his state visit to Washington for a summit at the White House with President Joe Biden, Yoon railed against any “attempt to change the status quo by force” in the Taiwan Strait. He further offered that South Korea would cooperate with the international community to prevent such an outcome. Yoon’s comments predictably angered China and sparked a monthslong diplomatic tit-for-tat that stretched into the summer.As part of that summit, Biden and Yoon jointly issued the “Washington Declaration,” which includes measures to enhance extended deterrence, such as the establishment of a nuclear consultative group, the exchange of nuclear-related information and visits by nuclear-powered military assets like the B-52 and submarines, which could be leveraged not only for a North Korea, but China-related contingency as well.But Yoon has simultaneously tried to keep an even hand in dealing with Beijing. For instance, when then-House Speaker Nancy Pelosi visited South Korea after her highly controversial visit to Taiwan to meet President Tsai Ing-wen, Yoon was nowhere to be found. The presidential office said he was on a five-day vacation and had no plans to meet with Pelosi, though he eventually did hold a last-minute phone call with her. His administration has also treaded softly in the country’s debut Indo-Pacific strategy statement in December, referring to China as a “key partner” with which Seoul “will nurture a sounder and more mature relationship as we pursue shared interests based on mutual respect and reciprocity, guided by international norms and rules.”Such moves have probably contributed to a gradually stabilizing and normalizing of the South Korea-China relationship. For example, this week, South Korea resumed trilateral talks with China and Japan, a mechanism that had been dormant since 2019. This foreign ministers-level meeting is paving the way for a trilateral summit soon. In a surprising new pact that goes into effect in May, Beijing relented to Seoul this month and will mandate that its fishing boat (and presumably fishing militia forces) keep their trackers on to help the South Korean coast guard combat illegal fishing within its exclusive economic zone.China’s Likely Considerations/CalculationsYoon’s foreign policy, however, is probably only one part of the story. Dismal Chinese economic numbers—including a collapse in exports, leveling off of inflation, rising unemployment, and slowing consumption, production, and investment—may be prompting Beijing to achieve a better partnership with Seoul. The same could be true for Chinese President Xi Jinping’s decision to meet with US President Joe Biden earlier this month at the Asia-Pacific Economic Cooperation (APEC) Summit in San Francisco.Another factor is probably Yoon’s push to open and strengthen ties with Japan, which has a strained relationship with China. Earlier this year, Yoon held a summit with his counterpart, Japanese Prime Minister Fumio Kishida—the first of its kind in over a decade. Since then, Seoul and Tokyo have agreed to resuscitate a military information-sharing agreement, and in August, Biden met with Yoon and Kishida at Camp David in the first-ever standalone trilateral summit between the three nations. Earlier this month, Secretary of Defense Lloyd Austin sat down in another unprecedented trilateral with South Korean and Japanese defense ministers to share information relevant to “severe security environments,” suggesting that North Korea isn’t the only target. Hence, Beijing probably seeks to undermine and ultimately end the strengthening South Korea-Japan partnership possibly aimed at it.Yet another factor may have more to do with China’s military modernization than anything South Korea is doing. When I visited Seoul earlier this month, I spoke with an interlocutor who believed that Beijing’s calculus is rapidly changing on the so-called “Three No’s” demanded of Seoul in 2017, including no new deployment of Terminal High Altitude Area Defense (THAAD) batteries, no South Korean integration into US regional missile defenses, and no trilateral military alliance with Japan and the United States. His theory was that Beijing’s rapid progress in developing a credible nuclear triad (capable of nuclear attacks from land, air, and sea) reduces the salience of pressuring Seoul to follow the Three Nos—a commitment Seoul denies actually exists anyhow.ConclusionAlthough South Korea is arguably inching closer to a trilateral military alliance with the US and Japan, now featuring, for example, joint military exercises, China can still rationalize that the partnership is still too new and possibly ephemeral, likely circumscribed and strained by lingering mistrust from World War II legacy issues, such as the comfort women.In the end, Yoon’s China policy has been unexpectedly successful thus far. He is also buoyed by the South Korean public’s increasingly negative views on China, with the nation now reportedly holding the most anti-China sentiment worldwide. Of course, Yoon is still a relatively new president—he is less than two years into his five-year term—and much could still go wrong, especially if he pursues the Taiwan issue more assertively. But for now, at least, Yoon and his government have successfully managed China, and perhaps offered a road map for how others can too.

Source : 38 North

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The weak economic momentum, along with the hope for the Federal Reserve’s rate freeze next month and moderating inflation, may prod South Korea’s central bank to keep its policy rate unchanged again this week.

But the Bank of Korea (BOK) is likely to say that it will keep its restrictive monetary policy stance amid still high inflation and soaring household debts.

On Thursday, the BOK is widely predicted to leave the rate, which currently stands at 3.5 percent, unchanged, which would be the seventh straight rate freeze in the face of a murky growth outlook, according to a survey of 13 economists by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The series of rate freezes comes after the BOK delivered seven consecutive hikes in borrowing costs from April last year to January.

South Korea’s economy has been dogged by slumping exports and sluggish consumer spending. For the year, the central bank had expected Asia’s fourth-largest economy to expand 1.4 percent this year, but it is still unclear whether such a forecast would be achieved in the face of a still murky economic outlook.

Weak global demand, led by China’s slowing economy, and a delay in the recovery of the IT sector have been blamed for a slump in the country’s outbound shipments.

But recently, the country’s exports have shown signs of recovering. South Korea’s exports rebounded for the first time in 13 months in October, driven by robust auto shipments, along with signs of an improvement in the chip sector.

Outbound shipments moved up 5.1 percent on-year to US$55 billion last month and logged a trade surplus of $1.64 billion in October, the fifth straight gain.

This week, the central bank will announce its updated growth outlook for the year and next year as well.

The economy grew 0.3 percent, 0.3 percent and 0.6 percent, respectively, in the first, second and third quarters.

Policymakers have also pinned hopes on easing inflation, helping the central bank take a breather in its rate hike moves.

South Korea’s inflation grew at a faster pace of 3.8 percent in October, staying above 3 percent for the third consecutive month, due to higher prices of energy and farm goods.

It is the third month in a row that the annual price growth has picked up pace.

But oil prices have been stabilizing in the face of the Israel-Hamas war, possibly helping inflation ease down the road, a development that supports the central bank’s rate freeze.

The central bank is also paying keen attention to rising household debts.

Household loans extended by banks in South Korea rose for the seventh straight month in October, led by rising home-backed loans amid high borrowing costs.

Banks’ outstanding household loans reached a record high of 1,086.6 trillion won (US$833.6 billion) at end-October, up 6.8 trillion won from a month earlier, accelerating from a 4.8 trillion-won rise the previous month and marking an on-month increase for the seventh month in a row.

Early this month, the Fed held its benchmark lending rate steady at a 22-year high for the second consecutive time as it keeps striving to bring down inflation to its 2 percent target.

The Fed kept the rate between 5.25 and 5.50 percent. But it left open the possibility of a rate change later to achieve “maximum” employment and its inflation target.

Next month, the Fed is widely expected to stand pat again.

Source : Yonhap News Agency

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Five years ago, when leaders of the two Koreas exchanged a historic handshake in Pyongyang, the Korean people looked on with hope, wishing that this masterpiece of diplomacy may finally put an official end to the seven-decade-long war on the peninsula. 

But as time surges forward, the once-celebrated inter-Korean agreement stands vulnerable, overshadowed by North Korea’s escalating nuclear threats, and its leader, Kim Jong Un reinforcing ties with his fellow authoritarian leader Vladimir Putin of Russia. Now, South Korea grapples with a growing divide on whether to uphold that deal.

The debate is set to intensify on the back of  former South Korean President Moon Jae-in’s  attendance of the commemorative event of the fifth anniversary of the September 19 Pyongyang Joint Declaration in Seoul on Tuesday.  

“The [current] government and the ruling party have expressed their intentions to reconsider or possibly scrap the military agreement,” Moon said at the event. “However, it’s crucial to note that the inter-Korean military agreement has been instrumental in preventing military confrontations between the two Koreas.”

Moon’s comments are largely seen as a warning against the administration of President Yoon Suk Yeol for its hardline policy on North Korea.

“It would be irresponsible to remove the last safety pin in place,” Moon added. “As relations between the two Koreas deteriorate and military tensions escalate, it’s imperative for both sides to uphold the agreement.”

His remarks may potentially improve  public opinion of South Korea’s progressives before the general election in April. Should that happen, it would conversely work against Yoon’s hardline policy on Pyongyang. 

Under the 2018 inter-Korean military deal, the two Koreas agreed to “end hostility” and to “take substantial steps to make the Korean Peninsula a permanent peace zone.” 

“Military accords should be honored and respected to the fullest extent to ensure dialogue continues and to prevent dire consequences,” Moon said. 

The former president was supported by key officials from his administration – his foreign minister Kang Kyung-wha and unification minister Kim Yeon-chul at the event.

South Korea’s progressives see consistent engagement with North Korea as a potential catalyst for altering Pyongyang’s hostile behavior and its actions of violating human rights. They believe that integrating North Korea into the international stage would foster transparency, open avenues for dialogue, and gradually shift the North’s stance towards global norms and values.

Conservatives, on the other hand, have long protested against what it defined as far-fetched engagement, saying that excessive aid to North Korea despite its continued provocations would only foster its nuclear ambitions. The conversative Yoon administration is thus adopting a hawkish policy on North Korea, aimed at pressing Pyongyang to forfeit its nuclear weapons.

The ongoing debate is set to gain its momentum, as Yoon’s Defense Minister nominee Shin Won-sik has opined about his inclination to scrap the inter-Korean military deal last week.

Some analysts consider the deal invalid, with North Korea returning to its brinkmanship diplomacy after its high-stakes summit with the United States collapsed in Hanoi February 2019. For instance, in November 2019, North Korea fired coastal artillery near the maritime buffer around the border island of Changlin-do. 

In May 2020, North Korea fired gunshots towards a South Korean guard post at the inter-Korean border, and in September 2020, a South Korean civilian was shot dead at the maritime border by the North and subsequently incinerated.

Further complicating matters is North Korea’s amplified nuclear and missile threats. The threats are expected to further intensify with Putin vowing to aid North Korea in developing its satellite technology. 

Rocket technology can be used for both launching satellites and missiles. For that reason, the UN bans North Korea from launching a ballistic rocket, even if it claims to be a satellite launch. 

South Korea’s internal disagreement surrounding its North North Korea policy could potentially undermine that of the allies. The lack of a unified stance – be it hardline or dovish policy – risks disabling Seoul and Washington to form a coherent strategy that could be implemented in the long-term.

Experts, however, noted that the main reason for this policy inconsistency is due to Kim Jong Un’s altered stance on his diplomacy after the fallout in Hanoi in 2019. 

“North Korean inconsistency is what leads to South Korea having to change its policy. If Pyongyang had continued to engage post-Hanoi summit, I think that both, Moon first, and Yoon now would have probably sought to try to accommodate this. Alas, this hasn’t been the case,” said Ramon Pacheco Pardo, Professor of International Relations at King’s College London and the KF-VUB Korea Chair at the Brussels School of Governance of Vrije Universiteit Brussel.

“Likewise, I think that it was domestic instability in North Korea in the late 2000s, due to Kim Jong Il’s health condition, and then the transition process to Kim Jong Un, [being] the main reason behind the end of the inter-Korean engagement. So liberals and conservatives may not fully agree on how to approach North Korea, but I actually think that Pyongyang is the main reason why Seoul changes its policy.”

Source : Rfa

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“With regard to the Inflation Reduction Act and the CHIPS and Science Act that were the core agenda (in the Yoon-Biden summit), (Yoon) has not protected our industry and companies at all,” said Lee Jae-myung, chairman of the main opposition Democratic Party, at a party meeting.

Lee said Yoon’s performance at the meeting ended up in a humiliating situation of generously spreading “global hogang” diplomacy. Hogang, a buzzword in Korean, refers to a customer who is easy to deceive.

Lee also criticized Yoon for his improper positions on the Ukraine crisis and the Taiwan question.

On Thursday, the national youth committee and the national university student committee of the party held a rally in front of South Korea’s National Assembly Proceeding Hall to condemn the government’s diplomatic policy for escalating tensions on the Korean Peninsula. Lee also participated in the event.

A joint statement released after the Yoon-Biden talks has caused concerns and criticism in South Korea, with the public opinion saying that the Yoon government is leading the country to “the center of a new Cold War.”

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“With regard to the Inflation Reduction Act and the CHIPS and Science Act that were the core agenda (in the Yoon-Biden summit), (Yoon) has not protected our industry and companies at all,” said Lee Jae-myung, chairman of the main opposition Democratic Party, at a party meeting.

Lee said Yoon’s performance at the meeting ended up in a humiliating situation of generously spreading “global hogang” diplomacy. Hogang, a buzzword in Korean, refers to a customer who is easy to deceive.

Lee also criticized Yoon for his improper positions on the Ukraine crisis and the Taiwan question.

On Thursday, the national youth committee and the national university student committee of the party held a rally in front of South Korea’s National Assembly Proceeding Hall to condemn the government’s diplomatic policy for escalating tensions on the Korean Peninsula. Lee also participated in the event.

A joint statement released after the Yoon-Biden talks has caused concerns and criticism in South Korea, with the public opinion saying that the Yoon government is leading the country to “the center of a new Cold War.” 

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“We understand that countries have different approaches when it comes to supporting Ukraine, and we respect the debate that’s been taking place in Korea,” Landsbergis said.

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The move comes as the South’s defense authorities have come under fierce criticism for the failure to counter the penetration of five North Korean drones into its airspace late last month. It was belatedly revealed that one of them even intruded into the no-fly zone, called P-73, near the presidential office in the central district of Yongsan.

In order to beef up its airspace defense system, the military is considering pushing for the speedy acquisition of the Sky Spotter system, according to the source.

Built by Rafael Advanced Defense Systems, it is designed for the early detection and tracking of such aerial objects, including drones, as well as balloons and kites, that are used for terrorist attacks.

The military plans to decide whether to formally request the purchase of the system following a review in the coming weeks on its effectiveness in countering the North’s drone threats, especially in making up for the radars and thermal observation devices currently in operation.

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South Korean President Yoon Suk-yeol had said that Seoul and Washington are discussing possible joint exercises using US nuclear assets, while North Korean leader Kim Jong Un branded the South its “undoubted enemy.”

“No,” Biden said when asked by reporters at the White House if he was currently discussing joint nuclear exercises with South Korea. He had just returned from a vacation in the US Virgin Islands, where he was accompanied by his national security adviser, Jake Sullivan.

Yoon’s comments followed his call for “war preparation” with an “overwhelming” capability, after a year of a record number of North Korean missile tests and the intrusion of North Korean drones into the South last week.

“The nuclear weapons belong to the United States, but planning, information sharing, exercises and training should be jointly conducted by South Korea and the United States,” Yoon said in the interview with the Chosun Ilbo newspaper.

The newspaper quoted Yoon as saying the joint planning and exercises would be aimed at a more effective implementation of the US “extended deterrence” and that Washington was also “quite positive” about the idea.

The term “extended deterrence” means the ability of the US military, particularly its nuclear forces, to deter attacks on American allies.

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According to him, the United States remains committed to the complete denuclearization of the Korean Peninsula.

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