South Korea occupies a uniquely important place in China’s strategic calculus—economically, politically, and geopolitically. It is not merely a neighboring state, but an indispensable partner in shaping East Asia’s balance of power. As a vital trading partner deeply embedded in China’s technological and industrial chains, and a pivotal player in managing regional tensions involving the United States and North Korea, its strategic importance is undeniable. The recent election of Lee Jae-myung as South Korea’s president offers China an opportunity to recalibrate a relationship that had drifted into distrust under the previous administration. If managed well, this political transition could allow both countries to stabilize a relationship increasingly strained by US-China tensions, military misgivings, and economic weaponization.
China’s interest in South Korea begins with the economy. Since normalizing diplomatic relations in 1992, bilateral trade between the two countries has surged from roughly $6 billion to well over $300 billion. South Korea is China’s fourth-largest trading partner, while China is South Korea’s largest. Semiconductor exports being critical to both economies are at the heart of this relationship. Moreover, China remains reliant on South Korean semiconductor giants such as Samsung and SK Hynix, particularly in light of tightening US export controls. South Korea, in turn, faces its own strategic dependency. The country sources nearly 90 percent of its rare earth imports from China, minerals essential to the production of electric vehicle components, high-performance magnets, aerospace technologies, and medical instruments. This asymmetry leaves Seoul exposed to potential supply disruptions whenever Beijing chooses to politicize trade flows.
President Xi Jinping’s recent call with Lee Jae-myung, which emphasized the importance of maintaining “regional supply chain stability,” was not a ceremonial pleasantry but a strategic appeal. For China, keeping South Korea close is necessary to reduce exposure to the US-led technological decoupling. But South Korea’s importance is not limited to trade. It is also embedded in the security architecture of East Asia in ways that directly impact China’s strategic environment. A treaty ally of the United States, South Korea hosts more than 28,000 US troops on its soil. It has participated in joint military exercises, advanced missile defense deployment, and broader Indo-Pacific coordination efforts, most of which China views as threat and containment measures. The 2017 deployment of the US Terminal High Altitude Area Defense (THAAD) system in South Korea marked a flashpoint. Retaliation from China came with a suite of economic measures: cutting tourism, banning Korean cultural imports, pressuring conglomerates like Lotte, and implicitly warning against deeper security integration with Washington. This episode not only left a scar on bilateral trust but also demonstrated China’s willingness to use economic leverage to achieve strategic outcomes. For South Korean companies and citizens the lesson was clear that economic ties with China carry geopolitical conditions.
Lee Jae-myung’s election could mark a turning point in restoring trust that eroded during Yoon Suk-yeol’s presidency. Yoon led one of the most conservative and pro-Western administrations in South Korea’s recent history. Lee’s foreign policy is marked by pragmatism and an emphasis on strategic autonomy. In his first week in office, he held diplomatic calls with the leaders of the United States, Japan, and China. Notably, Xi Jinping’s congratulatory message and extended phone call emphasized mutual respect, adherence to “core interests,” and an invitation to deepen regional cooperation. In turn, Lee invited Xi to Seoul for the APEC summit later this year, signaling openness to reengagement. Both sides appear willing to revive a dialogue that had grown brittle.
Lee’s approach seems to reflect a hedging strategy. While reaffirming South Korea’s alliance with the United States, he is also keen to prevent strategic overdependence on Washington. He has called for reducing the risk of confrontation in the Taiwan Strait and Korean Peninsula, emphasizing diplomacy over military signaling. His administration is preparing to balance security commitments with economic realities—a departure from Yoon’s more hawkish stance. For China, this presents a window to reduce tensions, avoid being encircled by US alliances, and potentially drive a wedge between Washington and one of its key regional partners.
Still, both sides will need to navigate longstanding mistrust and rising nationalist sentiment. Chinese policymakers remain wary of South Korea’s participation in frameworks like the US-led “Chip 4” alliance or the Quad. Similarly, Korean public opinion continues to be skeptical toward China, especially in the wake of COVID-19, the THAAD retaliation, and repeated incursions by Chinese fishing fleets into Korean waters. According to the Sinophone Borderlands project, which conducted a global survey across 56 countries, South Korea reported the highest levels of negative sentiment toward China. An overwhelming 81 percent of South Korean respondents expressed unfavorable or very unfavorable views, substantially more than in any other country surveyed. Lee might face domestic political pressures not to appear overly conciliatory, particularly from a conservative opposition that views China as a strategic threat.
Moreover, the structural pressures stemming from intensifying US-China tensions are unlikely to dissipate. Washington remains committed to countering China’s rise in East Asia and will continue to expect South Korea’s active participation in collective deterrence strategies. Any indication of Seoul drifting closer to Beijing could prompt diplomatic, military, or economic recalibrations from the United States. President Trump’s tariff war pushed regional players to rethink their economic alignments. Reflecting this shift, top trade officials from Japan, South Korea, and China recently held their first trilateral economic dialogue in over five years. They affirmed their intention to pursue a “free, fair, comprehensive, high-quality, and mutually beneficial” free trade agreement. In this complex geopolitical environment, Lee Jae-myung’s leadership will be tested not just through rhetoric but in concrete decisions—ranging from defense procurement and export controls to participation in regional summits.
Despite these constraints, both countries stand to gain from a more constructive relationship. For China, improved ties could undercut US containment efforts, secure access to advanced technology, and open the door for more stable North Korea diplomacy. For South Korea, deeper economic engagement with China could aid in recovery amid global trade turbulence and provide greater leverage in managing the unpredictability of North Korea. In fact, China’s recent calls for regional cooperation with ASEAN, Japan, and South Korea underscore its desire to present itself as a responsible stakeholder in East Asia rather than a coercive hegemon.
Yet the relationship can only deepen if China recognizes South Korea as an equal partner with its own strategic interests, not just a buffer state or a technology source. Heavy-handed responses to disagreements will only push it further into Washington’s arms. Conversely, South Korea must recognize that hedging is not a permanent solution. It must invest in building a resilient bilateral mechanism with China that can withstand periodic disagreements without collapsing into retaliation.
To that end, both countries should consider institutionalizing their relationship beyond crisis diplomacy. A joint strategic and economic council, formalized diplomatic hotlines, and increased cultural and academic exchanges could offer buffers against misunderstanding.
Lee Jae-myung’s presidency may not herald a radical shift in the China-South Korea relationship, but it does create space for repair and recalibration. By emphasizing pragmatism, engagement, and balance, his administration has the potential to move bilateral ties away from reactionary swings and toward strategic maturity. For China, this moment is not just an opportunity—it is a test of whether it can treat South Korea as a full partner rather than a subordinate actor in its regional vision. The stakes go beyond bilateral trade or diplomacy. The outcome will shape the security and economic future of East Asia, where neither China nor South Korea can afford another breakdown.
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