China's Rapprochement With South Korea

Who Won the THAAD Dispute?

Left-wing South Koreans protest the arrival of Donald Trump in Seoul, November 2017. Kim Hong-ji / Reuters

After a tense year that included harsh Chinese sanctions on South Korea, Beijing and Seoul announced on October 31 that they would take steps to repair bilateral relations. And on November 10-11, Chinese President Xi Jinping and South Korean President Moon Jae-in will hold a summit on the sidelines of the Asia-Pacific Economic Cooperation meeting in Da Nang, Vietnam. 

The timing of the Chinese-South Korean rapprochement was significant: it followed closely on the heels of both China’s 19th Party Congress (which further cemented Xi’s grip on power) and an October 23 meeting of the U.S., Japanese, and South Korean defense ministers, which produced an agreement for their countries to work toward greater trilateral cooperation. The reconciliation also came just days before November 4, when U.S. President Donald Trump set off for his first trip to Asia since taking office. 

The source of the year-long dispute between China and South Korea was the latter’s installation of the Terminal High Altitude Area Defense (THAAD) missile defense system. Beijing claims that THAAD and its powerful radar undermine China’s nuclear deterrent and has cast the missile system as part of a U.S.-led plan to contain growing Chinese power in East Asia. South Korea and the United States, for their part, insist that THAAD is aimed only at defending against the nuclear threat from North Korea.   

The falling out between the two countries has been costly, particularly for South Korea. Since July 2016, when former South Korean President Park Geun-hye decided to install THAAD, Beijing has attempted a series of punitive economic actions in order to force a reversal of the decision by Seoul. According to a report by the Hyundai Research Institute, Chinese economic retaliation for THAAD will cost the South Korean economy approximately $7.5 billion in 2017, compared to a loss of only $880 million for the Chinese economy.

Now that the dispute is over, the central question going forward is whether or not China’s economic coercion against South Korea worked. The

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