China, Japan and S Korea Revive Stalled Security, Trade Talks

The Lede:. The leaders of China, Japan and South Korea pledged to revive stalled talks on a trilateral free trade agreement and work toward addressing differences in positions on sensitive issues in Seoul last week. The last time ministers from the three countries met was 2019, and the term “sensitive issues” refers to the warming of relations between Tokyo and Seoul with the United States in contrast to the cooling relations between Beijing and Washington that have happened since then.

What We Know:

●      South Korean President Yoon Suk Yeol hosted Chinese Premier Li Qiang and Japanese Prime Minister Fumio Kishida in Seoul for the 2-day meeting. The leaders discussed economic cooperation on supply chains, export controls, and a restart to talks on a three-way trade deal.

●      Li expressed reservations about Japan and South Korea ramping up security and military cooperation with the United States and the two neighbors’ coordination with Washington’s tech trade curbs against China.

●      Kishida told reporters that he expressed concerns to China about the situations in the South China Sea, Hong Kong, Xinjiang, and Taiwan. He also announced that Japan will chair the next round of the trilateral leaders’ meeting.

●      The meeting coincided with an announcement by North Korea of a satellite launch, a move that is banned under the United Nations. Such launches are seen as disguised tests of long-range missile technology. The three leaders expressed the need to make positive efforts to settle issues in the Korean peninsula.

●      A joint declaration released after the meeting said the three countries should pursue regular communication at the highest levels and collaborate on areas including climate change, conservation, health, trade, and international peace.

The Background: The most recent meeting among these three countries was in Chengdu, China in December 2019, before the COVID-19 pandemic. None of the three leaders at last week’s summit were in office in 2019. China traditionally has sent the premier instead of president to this summit. Last week, China launched a large military exercise around Taiwan to express its disapproval of the self-governing island’s inauguration of its new president.

Likely Outcomes:

●      Over the past years, Japan and China have strengthened ties in military and economic spheres not just with the United States, but in a larger Indo-Pacific coordination framework with Washington that brings all of the U.S. allies in the region closer, in what some describe as a thinly veiled effort to counter Beijing. There is little in the way of further security integration of Japan and South Korea into the U.S.-led bloc aiming to counterbalance China in the region. The two countries will have to balance that reality with any interests that intersect with China moving forward. 

●      The prospects of fruitful trade between the three countries is a motivation to easing tensions against the backdrop of U.S. pressure. This dynamic is found across most of China’s bilateral relations with countries that side more with the United States but want to maintain stable ties with China and is likely a to be a deterrent to an intentional military aggression in the South China Sea. Yet, fully free trade with China is far from becoming a reality given the geopolitical conditions of the U.S.-China rivalry and the spotty business environment that foreign firms operating in the country have been experiencing in recent years. The areas of technology and semiconductors will likely be competitive in the coming years and the United States will put increasing pressure on any outlet that can benefit China, including South Korean and Japanese tech firms.

●      The positions of neighboring countries in Southeast Asia are not so straightforward. Unlike Japan and South Korea, many countries in Southeast Asia are not so closely aligned with either China or the U.S.-led grouping in the Indo-Pacific. Countries on both sides of this rivalry may find opportunities in this region, and the future may bring accommodative agreements in trade and security with disagreements in the South China Sea being a major source of tension.

Quotables:

“President Yoon has been making it clear that he is a strong supporter of the U.S. concept of a rules-based international order. He also says that he shares common interests and values with Japan. That is a clear shift away from China in terms of foreign policy…The opportunities lie elsewhere, primarily in terms of business and economics,” she said. “For that reason, the resumption of negotiations towards a  trilateral FTA may be regarded as a positive step for all involved. These three nations have long proved that they can get along very well in terms of trade and investment.” - Dr. Minseon Ku, foreign policy and international security expert at Dartmouth College

“[It’s] unlikely that Korean businesses are going to want to make cutting-edge technology investments in China, given the geopolitical environment and the fact that Chinese and Korean technology companies are now direct competitors in many areas”. - Yeo Han-koo, senior fellow at the Peterson Institute for International Economics and former South Korean trade minister

“We must uphold the spirit of strategic autonomy and maintain our bilateral relations. And we need to promote multipolarity in the world and oppose the formation of blocs or camps.” - Li Qiang, Chinese Premier

“Common economic interests remain the ballast that holds trilateral cooperation together, but growing misalignment over regional security related to North Korea, Taiwan, and the South China Sea – as well as rising US-China competition – will prevent closer economic cooperation among the three countries.” - Jeremy Chain, East Asia analyst at the Eurasia Group Japan

Good Reads:

China, Japan and South Korea vow to seek progress on FTA (Nikkei)

With Trilateral Summit, China, Japan, South Korea Look for a Reset (The Diplomat)

China hails ‘new beginning’ at summit with Japan and South Korea (FT)

China's premier hails 'new beginning' with US-allied South Korea, Japan (Reuters)

China, Japan, and South Korea talk trade at trilateral summit (GZERO)