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 -------------- ¶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 -------------- ¶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 BEIJING 00000083 002 OF 002 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