The Korean Peninsula appears divided in what some analysts call a “new cold war” as US-China tensions escalate over issues ranging from COVID-19 to Hong Kong. Washington’s new China strategy prompted Pyongyang to voice its alignment with China while heightening Seoul’s dilemma of choosing sides. As the North Korean economy suffered the combined effects of ongoing sanctions, the global pandemic, and severe weather, a leaked UN report in August sharpened international criticism of China’s sanctions enforcement. The region’s current domestic political priorities reinforce Beijing, Seoul, and Washington’s trilemma over alternative approaches to DPRK denuclearization.

Pyongyang Takes China’s Side in a US-China “Face-Off”

Xi Jinping and Kim Jong Un exchanged verbal messages of support on May 8-9 recognizing Beijing’s success fighting COVID-19. North Korea firmly backed Beijing in response to the Trump administration’s China strategy released in May, which according to Pyongyang Times shows that “Washington is “now scheming to politically destroy China’s social stability, economically hinder its development, militarily encircle it and diplomatically compress the space of its activity.” Such criticism centered largely on defending the Chinese Communist Party (CCP). The Workers’ Party of Korea (WPK) international affairs department on June 4 condemned US Secretary of State Mike Pompeo’s Fox News interview remarks on the CCP regime, in its first independent statement since Kim Jong Un took power in 2011 according to South Korea’s Yonhap News. DPRK Ambassador to China Ji Jae-ryong in a July 3 Global Times interview accused Washington of attempting to “disintegrate and disrupt socialist China,” expressing “full support and solidarity with the Chinese people and the CPC in their efforts to resist US interference.” Showering much praise on the CCP leadership, Pyongyang Times on Aug. 7 called the United States’ “categorical denial” of China’s socialist system the most serious attack in an emerging “face-off between systems that cannot exist together.”

North Korean support for the CCP regime clearly surfaced in the controversy over China’s Hong Kong security law, a “legitimate step” according to the DPRK foreign ministry. Meeting PRC Ambassador Li Jinjun in Pyongyang on June 4, Foreign Minister Ri Son Gwon promised to continue supporting Beijing’s position on “total unification,” and called external interference on Hong Kong a “violation of Chinese sovereignty and international law.” The DPRK media reiterated this position through Rodong Sinmun commentaries on June 7 and June 11, and a Pyongyang Times article on June 15 criticizing the West’s “anti-China offensive.” At the UN Human Rights Council, North Korea joined a Cuba-led statement on June 30 to endorse the Hong Kong security law’s passage. Fifty-three supporters of the joint statement outnumbered the 27 critics, and South Korea took neither side.

Bilateral anniversaries offered symbolic opportunities for expressing solidarity amid US-China tensions. Marking the 59^th anniversary of the friendship treaty, chairman of the DPRK-China Friendship Association pledged in June: “we fully support all measures taken by the Party and Government of China to defend the country’s sovereignty, security and territorial integrity and will always side with the Chinese people in the struggle to safeguard the socialist cause in the future.” State media commemorated the 70^th anniversary of the Korean War’s outbreak by exchanging similar pledges. Chinese media attention on bilateral advancements over the past two years beyond the Xi-Kim summits were largely limited to cultural cooperation. China’s entertainment industry is busy producing Korean War-themed TV dramas and films projecting “revolutionary” historical narratives, such as Kuaguoyalujiang, depicting China’s fight “against hegemony,” Bingxue Changjinhe, and Jingangchuan, all scheduled to be released in 2021, when the CCP celebrates its 100^th founding anniversary.

Planning For Xi Jinping’s Visit To Seoul

Having completed his strategic communication with Kim Jong Un, Xi Jinping held a phone call with Moon Jae-in on May 13. Moon reiterated his invitation to Xi to visit Seoul for the first time since 2014. The visit, which Moon characterized as “more important than any other thing” in the bilateral relationship, might have occurred in March or April if not for the outbreak of COVID-19. Xi told Moon that “as good neighbors, our countries have become a model for international quarantine cooperation.”

An Aug. 21-22 visit to Busan by former PRC Foreign Minister and Chinese Communist Politburo Member Yang Jiechi for talks with new National Security Advisor Suh Hoon marked another significant step in planning for a Xi visit to South Korea. In advance of the meeting, a senior South Korean diplomat outlined the Moon administration’s goals toward Beijing in The Korea Times, stating that “The most important reason that President Moon wants to have good relations with China is primarily economic, and secondly, North Korea issues, now that US-North Korea relations are virtually frozen. We know that China still has channels of communication with North Korea. Therefore we are hoping that President Xi Jinping will play a more active role in facilitating the resumption of South-North talks and North Korea-US bilateral talks.”

Figure 1 CCP member Yang Jiechi meets National Security Advisor Suh Hoon in Busan. Photo: Yonhap

The high-level exchange drew attention in South Korea as the first significant senior-level meeting between South Korea and China since the intensification of the downturn in US-China relations following China’s promulgation of a National Security Law for Hong Kong and a range of retaliatory actions and responses from the Trump administration on a wide number of issues. Yang’s visit yielded an agreement that Xi would visit South Korea “as soon as the COVID-19 situation has been stabilized and the right conditions are in place.”

South Korea’s Hankyoreh Sinmun reported that Yang proposed to Suh that China and South Korea “elevate our strategic cooperative partnership to a new level” by “strengthening high-level exchange and strategic communication and actively linking our two countries’ development strategies.” Blue House Spokesperson Kang Min-seok summarized South Korea’s response as emphasizing that “a relationship of mutual prosperity and amicable cooperation between the United States and China is important to the peace and prosperity of Northeast Asia and the world.”

While Yang hinted at the need for a strategic reframing of the China-South Korea relationship, National Security Advisor Suh Hoon focused on technical issues including cooperation on the COVID-19 pandemic, acceleration of second-phase negotiations of the South Korea-China Free Trade Agreement, and exploration of trial programs for linking China’s Belt and Road Initiative with South Korea’s New Southern and New Northern Policies.

Global Times reported the Heilongjiang Provincial Academy of Social Sciences Director Da Zhigang stated that Yang’s visit “not only paves the way for higher level exchange visits in the future, but also shows that China appreciates South Korea’s objective attitude on issues related to China—Seoul has not chosen a side, unlike what Japan has done, as it has the big picture of friendship in mind and understands the geographic proximity between the two countries.”

Premier Li Keqiang is also likely to visit Seoul by the end of 2020 to participate in the China-South Korea-Japan summit meeting. The Xi-Moon call coincided with efforts to re-establish travel links and support economic recovery between the two countries.

Pandemic-Era Recovery of China-South Korea Economic Ties

China’s economic recovery from the pandemic and the revitalization of China-South Korea trade ties have emerged as an important influence on South Korean economic prospects through the end of 2020. To the extent that China’s economy recovers quickly, exports to China will buoy South Korea’s export picture and buoy South Korea’s economic recovery. To this end, the two countries have cooperated to promote expedited entry and streamlined quarantine regulations in an attempt to normalize economic exchange and to support closer China-South Korea ties.

Figure 2 Chinese and ROK economic ministers join the 8th RCEP Ministerial Meeting via videoconference. Photo: ASEAN

Samsung Electronics Vice Chairman Lee Jae-yong was one of the first Korean CEOs to take advantage of the guidelines in mid-May, visiting a semiconductor plant in Xian. Lee’s visit came shortly following a US announcement that it will limit the supply of memory chips made with US technologies to Huawei Technologies, symbolizing the complexities of the technological competition between South Korea’s Samsung and China’s Huawei as two global end-to-end suppliers of every component of the technology supply chain for 5G products.

Samsung and Huawei are the largest 5G patent holders in the world, with Huawei ranking first in market share of 5G equipment based on the rapid expansion of China’s large domestic market. Samsung leads in the number of 5G patents granted by international patent offices. Samsung is a supplier of memory chips to Huawei, but new US restrictions on sales of US-origin technology chips to Huawei may tilt Samsung’s new investments in memory chip production toward the United States rather than China. The Korea Herald reports that South Korean semiconductor, electric battery, and display manufacturers remain ahead of Chinese competitors, but the lead is diminishing on the strength of Chinese state-led investments in cutting-edge technologies such as 5G and Artificial Intelligence (AI).

The China-ROK-US Trilemma on DPRK Denuclearization

Beijing reiterated its commitment to peninsula peace and stability after North Korea blew up an inter-Korean liaison office on June 16 and announced plans to deploy forces to the demilitarized zones. North Korea’s actions signaled frustration over the US-ROK alliance and economic sanctions, while reminding China of the geopolitical risks of inter-Korean tensions. According to the Korean Central News Agency on May 24, Kim Jong Un led a meeting of the WPK Central Military Commission that discussed “new policies for further increasing the nuclear war deterrence of the country.” Satellite imagery reports in May identified ongoing developments in North Korea’s weapons program, including the continued operation of the Pyongsan Uranium Concentrate Plant and near-completion of a new ballistic missile facility in Pyongyang. Based on the International Campaign to Abolish Nuclear Weapons estimates, North Korea spent an annual $620 million on its nuclear weapons program in 2018 and 2019. Despite such developments, PRC State Councilor and Foreign Minister Wang Yi at a May 25 press briefing for the National People’s Congress (NPC) annual session claimed that North Korea’s “positive steps” toward denuclearization “have not been reciprocated in a substantive way by the US side.” As US-DPRK talks remain deadlocked since the failed February 2019 Trump-Kim summit in Hanoi, Beijing continues to advance its December 2019 UN Security Council (UNSC) draft resolution proposed jointly with Russia, and a dual-track approach to denuclearization and peace.

Some Chinese analysts remain optimistic about the prospects for regional diplomacy. Central Party School expert Zhang Liangui projected in July that US-DPRK talks are likely to resume regardless of the outcome of 2020 US elections, claiming, “North Korea is a failed state … very few people in China realize how big a threat North Korea can be.” Zhang Tuosheng of China Foundation for International and Strategic Studies in a China Daily op-ed proposed restarting the Six-Party Talks, arguing “countries have far more common interests than differences” on Korean peninsula issues. In his July 22 testimony to the US Senate Foreign Relations Committee, a week after meeting counterparts in Seoul and Tokyo, Deputy Secretary of State and Special Representative for North Korea Stephen Biegun identified North Korea as one area of US-China cooperation given their “shared strategic interest” in peninsula peace and stability. But the Chinese foreign ministry appeared to dismiss such remarks two days later, insisting that “China upholds an independent foreign policy … China will act based on its own position and judgment.” After Kim Jong Un’s subsequent claims on North Korea’s nuclear deterrent capabilities, China’s foreign ministry argued that peace talks remained stalled because “the DPRK’s legitimate concerns are not paid enough attention.” China Global Television Network released an op-ed on July 27 suggesting that the risks of a legitimate nuclear North Korea for the United States’ regional position explain “why the Korean War has yet to formally come to an end.”

The impasse on DPRK denuclearization underscores the challenges of coordinating Moon’s proactive engagement of Pyongyang, Xi’s minimal interference, and Trump’s maximum pressure. Such strategies perpetuate a trilemma over alternative approaches—China-ROK appeasement of North Korea, US-ROK alliance cooperation and economic pressure, and US-China bargaining on the Korean Peninsula—that risk marginalizing one party. Despite the three leaders’ respective summit diplomacy with Kim Jong Un, recent tensions in the three bilateral relationships may only weaken the prospects for trilateral cooperation and enhance Pyongyang’s diplomatic leverage.

An Unexpected Invitation and South Korean Strategies for Managing Sino-US Animosity

Amid growing China-US tensions, Moon Jae-in received and rapidly accepted an unexpected an impromptu invitation from President Trump in early June to join the next G7 as an observer to be held in November along with Australia, India, and possibly Russia. It remains to be seen whether the G7 will come off in an expanded form, given objections to expansion by Germany and Japan. But most notable for South Korea has been China’s reaction to the expanded version of the G7 as a thinly veiled effort to expand a US-led international containment coalition against China. A Global Times commentary by Li Jiacheng of Liaoning University sent a shot across the South Korean bow warning that “South Korea bows to the US rashly and is choosing to pick the side of the US amid China-US conflicts. This is not a wise choice and will jeopardize China-South Korea relations.”

The dramatic deterioration in US-China relations symbolized by Beijing’s decision to impose a new national security law on Hong Kong and the US response has catalyzed debate among South Korean security analysts regarding what Seoul National University Professor Yoon Young-kwan described as “the shape of Asia’s new Cold War.” South Korea’s debates have centered on an increasingly open competition between Beijing and Washington to force South Korea to align with either Washington or Beijing despite South Korea’s preferred strategy of choice avoidance.

Following the August Yang Jiechi visit to Busan, The Korea Times advocated for “the government to maintain the principle of ‘balanced diplomacy’ without siding with a certain nation. Maintenance of the alliance with the US is essential as the backbone of our security. Yet keeping friendly ties with China is also essential as it is our top trade partner, in addition to its role in inter-Korean affairs and regional stability.” But this strategy assumes that South Korea can find the space necessary to continue choice avoidance.

As South Korean analysts look for the leverage necessary to avoid hard choices, some have proposed peninsula-based options premised on inter-Korean cooperation. For instance, special advisor to President Moon, Moon Chung-in has advocated that “South Korea needs to take a more prudent balancing diplomacy. In so doing, Seoul needs to make a major breakthrough to inter-Korean relations. Improved inter-Korean relations will serve as a very valuable buffer to US-China strategic rivalry on the Korean Peninsula.”

An alternative argument relies on South Korea’s global diplomacy to escape the China-US rivalry. Korea National Diplomatic Academy’s Kang Seon-jou advocates that “Seoul could also think of alternatives, if its national objective doesn’t necessarily require taking one side … It could be banding together with other nations, such as European countries, Australia and Canada,” said Kang. “Seoul needs a diplomatic system that could relieve some pressure of having to choose.”

Immediate diplomatic necessities may drive South Korea to walk a diplomatic tightrope by selectively appeasing both Washington and Seoul. This is the pathway that Lee Seong-hyeon envisions when he observes that when Xi comes to Seoul later this year, China may raise complex requests during the Busan visit related to US-led initiatives such as the Indo-Pacific strategy, Economic Prosperity Network and the Clean Network Initiative. Xi may also ask Moon to formally declare South Korea’s joining the China-led Belt and Road Initiative.” Another concern is that China might again utilize its economic leverage to drive wedges in the US-South Korea alliance. South Korean analyst Park Won-gon speculated that, “The underlying idea is to capitalize on Korea to make US strategy to contain China trickier” by enhancing South Korea’s export dependency on China.

China-DPRK Economic Exchanges and Sanctions Implementation

According to the Korea International Trade Association, North Korea’s trade dependence on China reached a record high of 95% last year after bilateral trade in 2018-2019 grew by 15% to $2.84 billion. In January-June 2020, it fell by 67% to $412 million compared to the same period in 2019, reflecting a 72% decline in exports and 67% decline in imports. Chinese customs data suggests a slow recovery in trade under the constraints of sanctions and COVID-19. China shipped 2,820 tons of refined petroleum products to North Korea in January-June according to UNSC data, 37% of what it provided during the same period last year. Despite this decline, UN self-reported data in July showed stable monthly inflows of fuel exports to North Korea in January-May, supported largely by Russia. Chinese food exports to the North similarly showed modest increases in April-May, while North Korean grain imports from Russia almost tripled in April compared to last year’s volume. Satellite imagery reports in the summer suggested a gradual recovery in cross-border projects like the new Yalu River bridge linking Dandong and Sinuiju, Tumen-Namyang bridge, and an island economic development zone. Joongang Daily warned that China’s opening of a new Changbaishan office under the Changchun customs office on Aug. 17, to manage border trade with North Korea, could affect South Korean business with China.

Such trends reinforce a wide consensus on the limits of US pressure and international sanctions. According to the Institute for Science and International Security, China accounted for almost a quarter of the 250+ identified cases of DPRK sanctions violations in February 2019-2020, followed by Hong Kong’s 8%. The US Justice Department on Aug. 27 filed a complaint to forfeit 280 cryptocurrency accounts tied to North Korean cyber hacks, revealing the links to Chinese money laundering. As the DOJ announced on July 23, the United States also filed a complaint to forfeit more than $2.37 million from four companies accused of laundering money on behalf of sanctioned DPRK banks, including Dandong Zhicheng, sanctioned by the Treasury Department for buying coal from the North. In May, the DOJ charged 28 North Koreans and 5 Chinese of laundering more than $2.5 billion to support North Korea’s weapons program.

An April report of the UN Panel of Experts on North Korea suggested a range of sanctions evasion strategies, leading some analysts to conclude, “it is clear the Chinese are now quite comfortable violating these sanctions with only the thinnest veneer of deniability.” Media leakage of a draft UN Panel of Experts midterm report enraged China’s Permanent Mission to the UN, which stated on Aug. 4: “China has been completely and strictly implementing DPRK-related resolutions of the Security Council, and faithfully fulfilling its international obligations. To that end, China has sustained huge losses and made tremendous sacrifice.” According to the UN report, North Korea made more than 30 illegal coal shipments in late March-early May, transferred mostly from DPRK ports to Chinese buyers. Forty-three countries filed a complaint to the UNSC sanctions committee in July on DPRK violations of UN restrictions on refined petroleum imports. A UN report in August showed that North Korean IT workers under the Munitions Industry Department continued to work in China and Russia after last year’s ban on DPRK overseas workers, raising an estimated $1.2 million-plus in 2019.

North Korea’s Economic Challenges and “Ghost Ships”

Kim Jong Un’s acknowledgement of the failure of his five-year economic plan drew much media attention at the end of August, as did his plans to reveal a new one at the next WPK congress, timed to occur nearly simultaneously with the US presidential inauguration in January 2021. Combined impacts of sanctions, COVID-19, and August floods heighten North Korea’s economic challenges. The UN reported in May that it has raised $1.3 million to support North Korea’s fight against COVID-19. Kim Jong Un declared a state of emergency in Kaesong on July 26 after the inter-Korean border city reported a suspected COVID case, while there were reports that cases also surged in June in the China-DPRK border city of Mudanjiang. A ROK unification ministry official warned of major food shortages compounded by poor weather and Pyongyang’s January decision to close the border with China, where DPRK troops were mobilized in August to enforce quarantine control. The US Department of Agriculture’s International Food Security Assessment report in August supported these assessments, designating 60% of North Korea’s population as “food insecure.” But even as flood damages further threatened North Korea’s economic stability, Kim rejected “any outside assistance whatsoever” due to concerns over the pandemic, while Rodong Sinmun called for self-reliance. UNICEF indicated in August that North Korea will temporarily close a humanitarian aid sea route between Dalian and Nampho. DPRK officials reportedly ordered the suspension of all border trade from Aug. 25 in an effort to prevent COVID-19 from affecting events marking the WPK’s founding in October.

North Korea’s COVID-19 lockdown has even been linked to an increase in suspected illegal Chinese fishing in DPRK waters in violation of UN sanctions, believed to present a potential source of illicit fees for Pyongyang. An NGO report in July revealed what it called “the largest known case of illegal fishing” operations involving more than 900 vessels originating from China in 2017, associated with a sharp increase in “ghost ships” appearing on Japan’s coast that year carrying dead North Koreans. According to Daily NK, a DPRK patrol vessel capsized in July after clashing with Chinese fishing boats over North Korean bribes, prompting Chinese authorities to temporarily ban Chinese fishing activity in waters off Dandong. In apparent retaliation, North Korean patrols killed three Chinese on Aug. 11 after firing at their boat.

Conclusion: “Peaceful Development” or “New Cold War”?

As Zhang Tuosheng questioned in July, “Northeast Asia is at a crossroad. Will it enjoy more peaceful development or move toward a new cold war?” Although Zhang calls for cooperation toward the former scenario, the intensification of great-power competition means that “small and medium-sized countries in the region may face the difficult situation of having to choose sides.”

Domestic politics remain the key factor in Beijing and Seoul’s external orientation and trilateral ties with Washington. As the CCP prepares to celebrate its 100^th founding anniversary next year, Xi’s domestic challenges continue to generate tough foreign policy and public skepticism over Seoul’s commitment to the “three nos” since the 2016-2017 THAAD dispute. South Korea’s millennial generation has grown increasingly vocal in resisting Moon’s policies as Kim’s “henchman” and Xi’s “puppet,” pointing to costs for national security, the US-ROK alliance, and South Korean democracy. While US priorities now center on domestic political debates, tensions with Beijing may subside after the November elections and save Seoul from taking sides.

Research assistance and chronology compilation provided by Chenglong Lin, San Francisco State University.