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    Greater China
     May 23, 2009

The dragon's shadow
China's Rise and the Two Koreas by Scott Snyder

Reviewed by Sreeram Chaulia

China's unprecedented economic growth in the past two decades opened avenues for its commercial influence to expand extensively in East Asia. Economic cooperation between China and South Korea, in particular, was unstoppable and drowned out the former's long-standing ideological closeness to North Korea. Flourishing economic exchanges between China and South Korea were viewed by the North as Beijing's betrayal of socialist ideals, but Pyongyang was helpless to prevent Beijing's new economic thrust in the region.

China's redirection of peninsular policy in favor of the South not only shook the North but also gnawed at the foundations of old alliance systems in the entire region. American scholar Scott Snyder's new book argues that although China's economic influence on the peninsula may not have fully transformed the security policies of the two Koreas, it does challenge the primacy of the United States.

At the same time, the author is not sanguine about predictions that formation of a new "outside alliance" between Beijing and Seoul is only a matter of time. In his estimate, "it is not clear" whether future circumstances will force South Korea to snap its security alliance with the US and end up bag and baggage in China's strategic embrace.

Many South Koreans are uncomfortable with the notion of subordination to China, an anxiety fueled by potential flashpoints and disputes between the two countries. Wary of economic over-dependence on China and worried about China surpassing South Korea in global economic competitiveness, Seoul signed a free-trade agreement with Washington in 2007. A total strategic realignment of the South in favor of China is thus unforeseeable.

The early chapters of Snyder's book survey why and how China shifted from a "One Korea" stand to a "Two Koreas" policy. As early as 1985, Chinese patriarch Deng Xiaoping had decided that China needed healthy relations with South Korea to benefit the business and economic interests of both sides. Also intent on trade gains, the Roh Tae-woo presidency in Seoul conceded to Chinese demands in 1992 by cutting all South Korean links with Taiwan. The perceived economic advantage was the prime enabler of Sino-South Korean normalization.

As bilateral trade grew at double-digit rates for over 15 years, a corporate "China lobby" arose in Seoul. China's vast pool of cheap labor and rising South Korean wage rates drove copious South Korean foreign investment into Chinese manufacturing units. Snyder adds that China's explicit acknowledgement that South Korea was a model for its own economic modernization also spurred relations. During the Asian financial crisis of 1997, China even learned from South Korea's mistakes in banking, currency and borrowing policies.

China's entry into the World Trade Organization (WTO) in 2001 triggered a second wave of "China fever" in South Korea, which became the leading foreign investor in China by 2004. Continuing the learning trend, Chinese workers on short-term overseas training contracts spent time in South Korea acquiring new skills.

By 2005, however, South Korean firms began hurting from Chinese competition in international markets. As China's production capacity in higher value-added sectors improved, it faced South Korean anti-dumping suits at the WTO. Thus far, the two sides have averted retaliatory trade measures, but public perceptions are hardening that each is taking undue advantage of the other.

China's new foreign direct investment policies requiring technology transfer and production for the Chinese domestic consumer market are frustrating South Korean-invested firms. Industrial espionage by Chinese employees and sub-contractors at South Korean-owned companies is threatening the South's thinning technological lead over China. Snyder quotes a South Korean observer that the economic relationship "will be transformed into a kind of competition and then a China problem and China threat as time goes by". (p 77)

In the political sphere, China and South Korea have been cooperating through regional institutions and dialogues, with shared objectives on the thorny North Korean nuclear issue. But since 2004, problems that had been swept under the carpet to keep oiling the economic partnership could no longer be hidden. China's claims on the ancient Koguryo kingdom inflamed South Korean nationalism and raised specters of a China-centered East Asian order that would dent Korean autonomy.

China's access to mining and natural resource concessions in North Korea sparked renewed anxieties in the South that Beijing would thwart a Seoul-led Korean reunification process. In the past few years, harsh Chinese crackdowns on North Korean refugees have also drawn the ire of South Korean human-rights activists.

The middle chapters of Snyder's book address the hot-button topic of Sino-North Korean relations. Chinese policymakers justify massive food and energy aid to Pyongyang as a "strategic" necessity to forestall a regime collapse and refugee influx from the North. China has tried to shift trade with the North from subsidies to market-based terms, but failed as Pyongyang sank further into an economic morass.

In 2001, North Korean supremo Kim Jong-il displayed a burst of enthusiasm for the Chinese model of economic growth, but he flattered to deceive. China had to bribe North Korea with assistance worth US$50 million in 2004 to get Pyongyang to participate in the six-party talks. In 2005, China unveiled a $2 billion "comprehensive assistance package" to "bind Kim Jong-il closer to Beijing" (p 126) and to ease the pressures on the Korean-populated north-eastern border region of China.

Snyder deduces a contradiction between China's need to keep North Korea in its orbit for a "foothold on the peninsula" (p145) and its rhetorical support for Korean reunification. A corollary contradiction lies in China's interest in denuclearizing the peninsula and its insistence that such an outcome not enhance the "guiding role" of the US in the region.

Pyongyang's nuclear test in 2006 "shocked" China as it had been advising Kim Jong-il not to resort to such extreme measures. After that event, two schools on the North have emerged in China. One camp contends that "we cannot slap the DPRK [Democratic People's Republic of Korea] down as that would undermine China's influence over North Korea and give the US the upper hand". (p 155)

The other camp wants Beijing to be Washington's "constructive collaborator" in pushing Pyongyang to denuclearize. The former's hand seems stronger overall, as China has been reluctant to coerce the North to eschew nuclear brinkmanship. Snyder attributes this stance to China's premonition that punitive measures would "further diminish Beijing's leverage" on the peninsula. (p 158)

The author next explores the triangle wherein South Korea depends on China for economic growth and on the US for security. He refers to the leading South Korean thinker Chung Jae-ho's view that a strategic realignment by Seoul towards Beijing and away from Washington is "highly unlikely, at least in the near term". (p 166) The US and South Korea, says Snyder, are "still in a 'marriage', even if it might not always seem so stable". (p 168) The election of the pro-US Lee Myung-bak as South Korea's president in 2007 in fact surprised Chinese strategists who presumed that the South was a "low-hanging fruit ripened by Sino-South Korean trade". (p 176)

Although South Korea's quasi-alliance with Japan has clear counterbalancing intent against China, it is dogged by recurring tensions over historical crimes. So bitter is Seoul's row with Tokyo on the contents of Japanese textbooks that it prompts US officials to "doubt South Korea's reliability as an ally". (p 192) Seoul wants to avoid being dragged into a "new Cold War" in Asia that might jeopardize its economic partnership with China. Even conservative South Korean strategists now "think twice about Chinese perceptions" (p 196) before contemplating participation in multilateral security systems aimed at hedging against China's rise.

Yet, countervailing political and economic factors have made South Koreans tread gingerly, lest they land in the Chinese lap. The South Korean public's resistance to Chinese hegemony is emotional and deep-seated, just as strong as it is towards American highhandedness. Korean "anti-hegemonism” and Chinese suspicions that the US could manipulate the peninsular reunification project leave open the old characteristic of regional rivalries in Northeast Asia. So, despite major changes in economic relationships since the Sino-South Korean entente, the security picture is as contested as it was during the Cold War.

Snyder's account is decidedly pro-American for endorsing Washington's claim that its military footprint is a force for good that stabilizes the region. He overlooks the perspective that the US itself is a stumbling block for Korean reunification. That said, his core theme about China attempting to leverage economic interdependence for strategic ends helps appraise how the dragon's shadow is lengthening over East Asia.

China's Rise and the Two Koreas: Politics, Economics, Security by Scott Snyder. Lynne Rienner Publishers, Boulder, 2009. ISBN: 978-1-58826-622-4. Price: US$22.50, 241 Pages.

Sreeram Chaulia is associate professor of world politics at the Jindal Global Law School in Sonipat, India.

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