[New York Diary] China Grows Anxious Over Trump 2.0

Is China returning to its "taoguang yanghui" policy? After years of asserting its dominance with the slogan of "Continental Rise," China is now lowering its head and reaching out to neighboring countries.

China's recent visa-free entry policies for major countries have sparked analysis that the country's diplomatic stance is shifting. This month, China allowed visa-free entry for 29 countries, including South Korea, and just a few days ago, expanded the list by nine more countries. President Xi Jinping has also been emphasizing peaceful coexistence. At this month's Asia-Pacific Economic Cooperation (APEC) summit, President Xi stressed cooperation by mentioning "seeking common ground while reserving differences" (qiutong cunyi) in his meeting with U.S. President Joe Biden. Furthermore, there is speculation that President Xi, who has not visited South Korea since July 2014-prior to the so-called "THAAD incident"-may visit next year. Compared to China's recent "wolf warrior diplomacy," characterized by overtly coercive tactics toward countries like Japan, Australia, and Norway, this is a dramatic policy shift.

Two main factors are cited as the reasons behind China's sudden move to improve relations with neighboring countries. Externally, there is the return of U.S. President-elect Donald Trump to the White House, who has signaled a hardline stance against China. Internally, the stagnating Chinese economy has driven changes in foreign policy. Looking at the foreign and security policy team for Trump’s second term, the pressure on China is expected to intensify in the coming years. Both Senator Marco Rubio, who will serve as Secretary of State, and Congressman Mike Waltz, who will become White House National Security Advisor, are known China hawks. Senator Rubio led the legislation to ban TikTok, China’s video sharing platform. Congressman Waltz has also argued, "We are in a Cold War with the Chinese Communist Party," and insisted that the United States must end conflicts in Europe and the Middle East to focus on the greater threat posed by China.

Previously, President Biden pursued a "small yard, high fence" strategy, selectively pressuring China on high-tech and other risk factors in cooperation with allies and partners, rather than a full-scale economic and trade decoupling. In contrast, President-elect Trump is likely to take a much tougher and more comprehensive approach, such as imposing 60% tariffs on Chinese imports. After his inauguration in January next year, he is expected to quickly resolve the Middle East conflict and the Russia-Ukraine war, then focus most military and diplomatic resources on pressuring China. From China’s perspective, unable to match the United States, improving relations with neighboring countries and forming multilateral alliances are the only ways to withstand U.S. pressure.

The economic downturn is also a key reason for the shift in China’s policy direction. In the third quarter of this year, China’s economic growth rate was only 4.6%, raising concerns about achieving its annual target of around 5%. Numerous issues persist, including high youth unemployment, astronomical local government debt, and worsening asset inequality. The global rise in anti-China sentiment since the COVID-19 pandemic and increased geopolitical uncertainty due to intensifying global conflicts are also making things more difficult for China. Ultimately, the change in China’s foreign policy is not based on idealistic goals such as global cooperation, but rather on internal and external pressures that have made achieving the "Chinese Dream" increasingly difficult.

How should South Korea respond? On November 5, many U.S. experts interviewed after the presidential election diagnosed the accelerating U.S.-China rivalry under Trump’s second term as an "opportunity" for South Korea. Robert Z. Lawrence, a leading international trade and commerce expert at Harvard Kennedy School, advised that South Korea is in the optimal position to maintain friendly relations with both countries, reduce economic dependence on China, and further strengthen economic cooperation with the United States. The possibility of President Xi’s first visit to South Korea in 11 years and President-elect Trump’s message of cooperation in the shipbuilding sector during his first call with President Yoon Suk Yeol highlight South Korea’s strategic importance to both the United States and China. In Trump’s second term, South Korea should emphasize the importance of the Korea-U.S. alliance based on shared security and values, while further strengthening economic cooperation with the United States. At the same time, in dealing with a cornered China, South Korea should remember the idiom "honeyed words, dagger in the heart" (gumi bokgeom), seeking to improve relations and maximize its own gains.