The Lee Jae-myung Administration’s Search for a Pragmatic Approach to Korea-China Relations

Lee Sang-man

Visiting Professor, Institute for Far Eastern Studies, Kyungnam University

I. Introduction

The Lee Jae-myung administration, inaugurated in June 2025, faces a critical juncture in East Asian geopolitics and in South Korea’s strategy toward China. This year marks both the 80th anniversary of Korea’s liberation and the 33rd anniversary of South Korea-China diplomatic normalization, underscoring the importance of recalibrating relations not only with Beijing, but also with Washington, Tokyo, and Moscow.

In contrast to the Yoon Suk-yeol administration’s U.S.- and Japan-centered diplomacy grounded in “value diplomacy,” President Lee advocates a pragmatic “Korea First” approach—seeking flexibility, strategic autonomy, and practical cooperation with all four major powers.

The goal is to strengthen South Korea’s diplomatic room for maneuver, advance national interests, and create conditions for peaceful coexistence on the Peninsula under a durable peace regime.

South Korea-China relations today are marked by continuity as well as change. The traditional pillars of economic and cultural interdependence remain, yet new fault lines have emerged in three areas: (1) economic diversification and de-Chinaization trends, (2) increasingly complex public opinion, and (3) heightened security frictions, particularly in the maritime and air domains.

Issues such as China’s “Northeast Project,” the “West Sea Project,” and disputes over Ieodo have become intertwined with military and sovereignty concerns, making pragmatic policy responses all the more urgent.

Against the backdrop of intensifying U.S.-China competition, Seoul must find sustainable solutions to the structural dilemma of balancing alliance commitments with independent diplomacy—the long-standing challenge encapsulated in the phrase Anmi-Gyeongjung (security with the U.S., economy with China).

II. The Current State of South Korea-China Relations

1. Economic Interdependence under Pressure

Economic ties remain substantial, but diversification is accelerating. By 2023, South Korea’s exports to China fell below 20% of the total for the first time since the early 2000s, with the United States and Japan surpassing China as top destinations.

In 2024, total exports reached a record $683.8 billion, with semiconductors leading growth (up 43.9% year-on-year). Exports to China grew by only 6.6%, compared with 10.5% to the U.S., narrowing the gap in export shares.

At the same time, Korean firms face intensifying competition from low-cost Chinese goods across industries ranging from steel to cosmetics. Around 70% of Korean manufacturers report being directly affected or expect to be. Direct investment trends further highlight the shift: South Korean FDI into China declined sharply in 2023, while investment in the U.S. surged by 180%.

2. Public Opinion: Cooperation Amid Distrust

Public sentiment toward China remains ambivalent. According to a 2023 EAI survey, more than 80% of South Koreans viewed relations with China as “important,” even as overall favorability remained low. A Pew study that same year found 64% of South Koreans considered China a “major threat,” a higher share than those citing North Korea’s nuclear program.

By 2025, public concern had shifted toward the U.S.-China power rivalry itself, with respondents expressing wariness about U.S. military intervention in a Taiwan crisis. These trends reveal both the depth of mistrust and the recognition of unavoidable interdependence.

3. Security Tensions in Air and Maritime Domains

Security frictions have become more pronounced. In 2023 and 2024, Chinese and Russian military aircraft repeatedly entered the Korean Air Defense Identification Zone (KADIZ) without notification.

A notable incident in November 2024 involved 11 aircraft from both countries, prompting South Korean fighter scrambles. These incursions were widely interpreted as tests of Seoul’s readiness and demonstrations of joint military power.

Maritime disputes are also intensifying. China’s “West Sea Project,” including expanded surveys and patrols near Ieodo, challenges South Korea’s EEZ rights and raises sovereignty concerns. The convergence of air and maritime pressure highlights the multidimensional nature of security risks in Korea-China relations.

III. Directions for Improving South Korea-China Relations

The Lee administration’s pragmatic diplomacy represents an attempt to recalibrate South Korea-China relations while preserving the credibility of the U.S.-ROK alliance. The aim is not to dilute strategic clarity but to secure tactical flexibility within a rapidly shifting regional environment.

Key considerations include:

1. Maintaining Alliance Strength While Rebuilding China Ties.

Pragmatism requires sustaining the U.S.-ROK alliance as the cornerstone of national security, while simultaneously pursuing functional cooperation with China. Joint ventures in trade, technology, and environmental governance could provide channels for constructive engagement without undermining alliance obligations.

2. Leveraging Inter-Korean Engagement as a Stabilizer.

Efforts to resume inter-Korean dialogue can indirectly improve South Korea-China relations. Reduced tensions on the Peninsula lessen China’s security concerns, diminishing the rationale for military signaling while enabling expanded cultural and economic exchanges. Beijing, in turn, benefits from reduced diplomatic burdens and greater regional stability.

3. Building Institutionalized Mechanisms.

For stability, bilateral relations require durable frameworks:

High-level strategic dialogue to sustain communication during crises.

Issue-specific coordination mechanisms on technology, security, and trade.

Multilateral platforms (e.g., ASEAN+3, RCEP) to broaden cooperation agendas.

Civil society initiatives to address rising anti-China and anti-Korea sentiment.

4. Pursuing a Sophisticated Diplomatic Design.

True pragmatism goes beyond balancing between Washington and Beijing. It requires simultaneous pursuit of strategic clarity and tactical flexibility—anchoring alliance credibility while pursuing practical benefits with China.

Conclusion

The Lee Jae-myung administration’s pragmatic diplomacy seeks to navigate the structural dilemma of U.S.-China competition while advancing Korea’s national interests. Success will depend on sophisticated policy design: preserving alliance stability, expanding functional cooperation with China, and reducing structural mistrust through dialogue and institutionalized mechanisms.

If Seoul can achieve this balance, it will move from being a passive object of great power rivalry to an active shaper of Northeast Asia’s emerging multipolar order.