[Insight & Opinion] Time to Rethink Relations with a Changing China

Since the reform and opening-up initiated by Deng Xiaoping in 1978, China maintained this trajectory for 40 years but has been pursuing fundamental changes since the mid-2010s. It is clear that China is changing. We need to recall that the goal of China’s reform and opening-up was not economic development but the “establishment of the material foundation to complete the socialist revolution.” Deng Xiaoping, inheriting a China devastated by the Great Leap Forward and the Cultural Revolution, had to rebuild the material foundation necessary for the transition to socialism. This perspective is clearly reflected in Deng Xiaoping’s statement in March 1985, where he said, “What we are doing is socialism, and the ultimate goal is communism,” and that “the purpose of opening up and reform is to develop the socialist economy.” Despite ups and downs, China has successfully accumulated the material foundation for over 40 years and has now become the world’s second-largest economy.

From China’s point of view, the conditions to achieve the original goal have now been established. The future China pursues is one where China does not need the world, but the world needs China. To this end, China has begun to increase its food self-sufficiency rate and establish multiple safety nets for the stable import of essential resources and energy. Renewable energy, including solar power, is regarded as a core element in achieving a self-sufficient economic structure that China requires. Through the success of industrial strategies that closely benchmarked South Korea’s and Japan’s industrial policies, China realized that it is easier and ultimately advantageous to bring about a paradigm shift through technological leaps and innovation rather than following the Western path, especially in separating from the West. Of course, in this process, there have been technology theft and unauthorized copying, the mobilization of various means to exclude competitors and foreign companies, and differential support to nurture domestic industries. The Chinese leadership is well aware that while they want to create their own new system and order, this path must not lead to suicidal isolation. China must be seen by many countries as an alternative to the Western-led order, and to make others follow China’s will, it must have corresponding economic and technological power. In this regard, industrial strategies such as “Made in China 2025” emerged.

What differed from China’s expectations was the rapid change in the United States. As the U.S. began to build walls and bind allies to encircle China in the fields China aimed to achieve, China encountered a major obstacle just short of reaching its ultimate goal. From China’s perspective, the current situation is a moment to decide which path to take, and the U.S. also faces a time to catch its breath and prepare for the next phase. This dynamic underlies the high-level talks between the two sides and the U.S.’s conciliatory remarks such as “de-risking.”

From our perspective, we are facing a fundamental change different from the past 30 years of relations with China. Considering that China has achieved most of what it could gain from globalization, the importance of South Korea as a country has clearly diminished compared to before, except in terms of security. The reality is that there is nothing South Korea can do that China cannot, except for memory semiconductors. China’s consistently aggressive and high-handed attitude toward us stems from the disappearance of any inevitable reason to treat us amicably. We are at a point where we must forget past memories and seriously prepare to set and adapt to a changed relationship with China.

Choi Jun-young, Senior Advisor, Yulchon LLC