China wins its war against South Korea’s US THAAD missile shield – without firing a shot

Seoul signs up to military constraints in return for Beijing lifting economic sanctions, setting a worrying precedent for China’s regional rivals

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Chinese President Xi Jinping and South Korean President Moon Jae-in. Photo: AP

Published: 11:30am, 18 Nov 2017Updated: 11:30am, 18 Nov 2017

A detente between China and South Korea may be good news for the Korean economy and a necessary step towards resolving the North Korea issue, but at the same time it threatens to degrade regional security for years to come.

When South Korean President Moon Jae-in and Chinese President Xi Jinping agreed on November 11 to “normalise exchanges”, they ended a conflict that began more than a year ago with Seoul and Washington’s decision to deploy an anti-ballistic missile system in South Korea.

Beyond THAAD: the real reason why China is angry with South Korea

Beijing, which claims the system’s radar can be used by the United States to spy on China, retaliated against the deployment of the Terminal High Altitude Area Defence (THAAD) system with unofficial sanctions against the South. Seoul has now agreed to accept military constraints in return for the lifting of those sanctions, creating a worrying precedent for Beijing’s rivals in the region.

South Korean protesters try to block two US military vehicles hauling THAAD missile defence systems in Seongju. Photo: EPA

The military constraints are known as the “three nos”, meaning Seoul agrees there will be no further anti-ballistic missile systems in Korea, no joining of a region-wide US missile defence system and no military alliance involving Korea, the US and Japan. This is an enormous sacrifice but for reasons both economic and political Moon had few other options.

Economically, after being suffocated for 16 months by China’s “doghouse diplomacy”, many South Korean businesses were left gasping for air. Hyundai’s sales in China dropped 64 per cent in the second quarter of 2017 from a year before, Lotte’s supermarket sales in China fell 95 per cent over the same period and Chinese tour groups to South Korea were banned outright, which alone led to an estimated revenue loss of US$15.6 billion this year, according to Hyundai Research Institute.

Seoul wants THAAD, but do Koreans?

Politically, a better strategy might have been playing both ends against the middle by fostering better ties with Japan and the US but this would have alienated Moon from his base and may not even be something he wants at the moment.