CHINESE REACTION TO ROK ELECTION: MINIMAL IMPACT

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 000083

SIPDIS

SIPDIS

E.O. 12958: DECL: AFTER KOREAN REUNIFICATION
TAGS: PREL KN KS CH JP
SUBJECT: CHINESE REACTION TO ROK ELECTION: MINIMAL IMPACT
ON PRC-ROK RELATIONS

Classified By: Classified by Political Regional Unit Chief Mark Tesone.
Reasons 1.4 (b/d).

Summary
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1. (C) While Lee Myung Bak's election as South Korea's next
president ushers in a more conservative government, the
election will not have a major impact on Sino-ROK relations,
predicted one Chinese MFA official. Lee's foreign policy
will be more pragmatic and will focus on the PRC-ROK economic
relationship and the U.S.-ROK alliance, contacts told us.
Chinese contacts do not expect a change in the overall
direction of South-North engagement, but one MFA official
predicted that there may be an adjustment in the new
administration's "enthusiasm level" on giving economic aid to
the DPRK. And, in contrast to the current administration,
Lee may be more willing to raise thorny issues such as
refugees or human rights directly with the DPRK. One
academic urged the United States to continue its own focus on
"big issues such as denuclearization" and to encourage South
Korea to take a similar approach. The bilateral economic
relationship is the foundation of the PRC-ROK relationship,
noted one Korea-watcher, especially since China is a
"lifeline" for the ROK economy. End Summary.

Chinese MFA: No Major Changes
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2. (C) While Lee Myung Bak's election as South Korea's next
president ushers in a more conservative government, it will
not have a major impact on China-ROK relations, said Fang
Kun, Deputy Director of the MFA's Asian Department. South
Korea and China normalized relations 15 years ago and the two
countries have close cooperation within the Six-Party
process, the United Nations and at ASEAN. Fang agreed with
the general consensus of most political analysts and believes
that Lee's foreign policy will be more pragmatic than
President Roh's.


3. (C) There may be some subtle changes in South-North
interaction, said Fang, but he sees no change to the overall
direction of Six-Party Talks. There may be an adjustment in
the new administration's "enthusiasm level" on giving
economic aid to the DPRK, but the ROK will ultimately end up
giving the same amount of economic aid to North Korea as
before, he said. While the current government actively
"sought opportunities" to provide aid to the North, Lee may
begin to set conditions on the provision of aid. When asked
about the flurry of inter-Korean economic agreements signed
since the October summit, Fang predicted that Lee might
tinker with the details but will largely honor those
agreements.

A Pragmatic Foreign Policy
--------------


4. (C) During the course of his election campaign, Lee
promised that his foreign policy would be less ideological
and more pragmatic, said Piao Jianyi, Deputy Director of the
Center for Regional Security Studies at the Chinese Academy
of Social Sciences. This slogan was neither interesting nor
newsworthy, complained Piao. All leaders eventually take
into account their country's national interests and core
values. Look at President Roh, said Piao. President Roh may
have criticized the United States during his own inauguration
ceremony, but after political realities set in, Roh learned
that he could not ignore U.S. views. Piao highlighted the
U.S.-ROK agreements on U.S. troop withdrawal and the Free
Trade Agreement as areas where Roh displayed pragmatism and
downplayed ideology. Piao expects Lee to be no different in
looking after South Korea's national interest.


5. (C) China Reform Forum Senior Research Fellow Yu Meihua
does not foresee many changes on the foreign policy front and
predicts that Lee is likely to focus on more pragmatic issues
such as the ROK-PRC economic relationship. Although Lee has
promised to repair and emphasize the U.S.-ROK alliance, Yu
said that it is likely that South Korea will want to postpone
the 2012 scheduled U.S. troop withdrawal, especially if North
Korea slows down the denuclearization process.

South-North Engagement
--------------


6. (C) One area where Lee will likely differ from Roh is the
issue of South-North engagement, said Piao. He noted that
under the current administration, South Korea often abstained
on UN measures critical of North Korea's human rights
situation in order to avoid provoking the DPRK. Lee,
however, may be more willing to raise thorny issues such as
refugees or human rights directly with the DPRK. Piao urged

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the United States to continue its own focus on "big issues
such as denuclearization and a Northeast Asia peace
structure" and to encourage South Korea to take a similar
approach. China hopes South Korea will continue to focus on
the bigger picture of denuclearization and that it will not
divert its focus to "smaller issues," said Piao.

Economics are Foundation of Bilateral Ties
--------------


7. (C) The ROK and China have a very close relationship in
terms of economics, culture and even have a budding security
relationship, said First Secretary Yong-hyon Kim of the ROK
Embassy. The ROK will continue to deepen its trading
relationship with China, said Kim, and the new administration
will not change its policies towards China. According to
Piao, the close bilateral economic relationship is the
foundation of PRC-ROK ties. China is South Korea's largest
export market and a "lifeline" for the ROK economy, said
Piao. Nevertheless, there may be a slowdown in ROK
investment to China due to rising labor costs, warned Piao.
South Korean conglomerates will continue to invest in China,
but smaller ROK enterprises may begin to relocate to cheaper
markets such as Vietnam.


8. (C) Piao described the explosive growth in
people-to-eople contact between South Korea and China s
"surprising." There are currently 700,000 outh Koreans
residing in China and this couldgrow to 1 million in just a
few years. He added that there are 4.8 million visits each
year between the two countries. While China is a diverse
nation, it is "odd" to have so many South Koreans put down
roots in China, Piao said.
RANDT