Challenges and Policy Tasks for Northeast Asia following the APEC Summit Conference

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Sung-Yoon Lee

sylee@sejong.org

Principal Research Fellow

Sejong Institute

1. Executive Summary

Northeast Asia in the second half of 2025 has entered a phase of heightened structural instability. The consolidation of North Korea–China–Russia coordination, expanded DPRK nuclear ambitions, and intensified competition across maritime and technology domains are compressing strategic space for all regional actors. The APEC Summit Conference and associated bilateral summits generated tangible results for Seoul—particularly in ROK–U.S. economic-security coordination—but also heightened the risk of bloc polarization. They also provided rhetorical cover for accelerated DPRK military development.

The immediate policy task for the Lee Jae Myung administration is to replace single-track bilateral relations management with a complex multi-layered design: align national objectives with risk mitigation and credible buffering mechanisms across inter-Korean, ROK–U.S., DPRK–U.S., ROK–China, ROK–Russia, and ROK–Japan relationships. This requires disciplined messaging on sensitive security initiatives (including the SSN track), calibrated ambiguity on Taiwan-related contingencies, and strengthened crisis-management channels to prevent spillover dynamics from the East China Sea or Taiwan Strait into the Korean Peninsula.

Three developments define the post-APEC environment: (1) rapid deterioration in China–Japan relations, with the primary axis shifting from historical disputes toward Taiwan and “national survival” framing; (2) China’s restrained but deliberate signaling on the ROK–U.S. understanding to advance ROK SSN construction, likely reflecting both prioritization of pressure on Japan and lessons from the THAAD backlash; and (3) North Korea’s sharp denunciation of the SSN issue and the rhetoric of the “complete denuclearization of North Korea,” aimed at strengthening Pyongyang’s leverage for sanctions relief and mutual arms-control negotiations with the U.S.

Key Takeaways

- Treat the post-APEC environment as a structural—not episodic—challenge; prioritize sustained risk management over one-off diplomatic events.

- Elevate the ROK–U.S. alliance as a top-tier security and economic partnership while controlling escalation narratives tied to SSN and Taiwan contingencies.

- Use practical, sanctions-compliant cooperation with China and Russia (tourism, culture, logistics, talks on Arctic routes) to widen diplomatic buffers and reduce bloc polarization risks.

- Strengthen ROK–Japan forward-looking cooperation and shuttle diplomacy, while managing history and the Dokdo issue as a disciplined two-track risk domain.

2. Issue Background: Northeast Asia Before and After APEC

A. Pre-APEC strategic signals and growing alignment among DPRK, China, and Russia

A series of high-visibility events in late 2025 carried strategic meaning beyond ceremony. The appearance of Xi Jinping, Vladimir Putin, and Kim Jong Un together at China’s Victory Day parade in September—followed by DPRK summits with Russia and China—reinforced perceptions of a tightening alignment directed at contesting U.S. influence in the region.

Pyongyang’s large-scale domestic celebrations for the 80th anniversary of the Workers’ Party, attended by high-level foreign figures, further suggested an effort to translate external support into diplomatic leverage for 2026. These signals unfolded against concerns about expanded North Korea–Russia military cooperation, including the possibility of sensitive technology transfer under conditions of prolonged confrontation with the West.

B. APEC Outcomes: concrete results and embedded strategic costs

The APEC cycle produced notable bilateral results. First, the ROK–U.S. summit reportedly achieved progress in tariff negotiations and outlined a large-scale Korean investment package in the United States. The U.S. side also signaled provisional political support for Korea’s pursuit of nuclear-powered submarines (SSN), subject to complex legal and administrative processes and extended timelines.

Second, the ROK–Japan summit reaffirmed a forward-looking agenda spanning advanced technology, economic security, and socio-cultural cooperation, and endorsed continued shuttle diplomacy. Yet these gains were complicated by Tokyo’s Taiwan-related remarks, which rapidly escalated China–Japan tensions and narrowed room for regional stabilization initiatives.

Third, the ROK–China summit—the top Chinese leader’s first visit to Korea in 11 years—signaled interest in rebuilding political trust and expanding practical cooperation, including discussion of a KRW–CNY currency swap. At the same time, Seoul’s SSN messaging and alliance wording on denuclearization became new points of sensitivity for Beijing and Pyongyang.

Finally, a temporary U.S.–China trade pause provided limited tactical breathing space but did not change the underlying trajectory of strategic rivalry. Under such conditions, Korea’s challenge is to convert the wins from APEC into a stabilizing architecture while preventing them from becoming triggers for wider polarization.

3. Rapidly Shifting China-Japan Relations

A. From historical disputes to Taiwan-centered survival framing

China–Japan tensions have long cycled between escalation and détente, often driven by historical memory disputes. The current confrontation is distinct because the focal point has moved toward Taiwan-related sovereignty claims and Japan’s explicit framing of a Taiwan contingency as a potential “national survival” issue.

This shift raises the probability of a longer and more structural crisis. Unlike disputes rooted in symbolic politics, Taiwan remains China’s core national interest and therefore reduces the range of acceptable compromise. As a result, the confrontation is likely to persist and to shape regional economic and security decisions throughout 2026.

B. China’s coercive toolset and spillover effects

Beijing’s response has combined harsh rhetoric with coercive economic and societal measures: discouraging tourism, constraining cultural content, and sustaining pressure in areas such as fisheries and trade. Historical precedent exists, such as the 2010 rare earth export interruption, but the Taiwan-centered dispute portends greater acrimony in both scope and duration.

For Korea, the immediate spillover risk is twofold. First, trilateral (ROK–China–Japan) cooperation mechanisms may weaken precisely when crisis-management channels are most needed. Second, bloc narratives can intensify pressure on Seoul to take clearer positions on Taiwan-related scenarios, potentially linking Korean Peninsula security to East China Sea and Taiwan Strait contingencies.

C. U.S., Russia, and Taiwan: widening the conflict arena

U.S. statements reiterating commitments around the Senkaku/Diaoyu issue and opposition to coercive changes in the Taiwan Strait, alongside congressional and executive actions supporting Taiwan, have reinforced a perception of tightening coalition lines. Russia’s rhetorical criticism of Japanese “militarism” has further hardened the geopolitical framing.

Taiwanese political actors have encouraged symbolic support for Japan, including tourism promotion proposals, but such gestures are unlikely to shift the underlying balance and may invite further Chinese pressure. The net effect is an expanded conflict arena in which Korea’s diplomatic agility becomes both an opportunity and a risk.

4. China and North Korea React to the ROK-U.S. SSN Discussion

A. China’s restrained official posture: the logic of ‘quiet response’

Beijing’s official response to Korea’s SSN momentum has been notably restrained compared to its sharp denunciation of Australia’s AUKUS SSN decision. This “quiet response” is best understood as a calibrated strategy shaped by simultaneous escalation with Japan and by lessons from the THAAD episode, which produced durable anti-Chinese sentiment in Korea and imposed reputational costs on Beijing.

In practice, China appears to be managing Seoul through indirect signaling—avoiding open confrontation while reserving pressure tools and emphasizing narratives that Korea could be drawn into U.S.-led containment dynamics. This approach seeks to keep Korea within a manageable zone of influence without forcing a decisive strategic break.

B. Indirect criticism through media amplification and domestic voices

Chinese state media have amplified Korean domestic criticisms of the SSN pathway, highlighting concerns about escalation, regional arms competition, and potential linkage to Taiwan contingencies. Such amplification can shape elite perceptions while keeping the diplomatic temperature lower than direct government condemnation.

This pattern also illustrates the importance of Seoul’s messaging discipline. If SSN initiatives are framed as components of broader regional confrontation, China will be more likely to treat them as hostile steps. If framed consistently as defensive, stabilizing, and NPT-compliant measures aimed at countering DPRK threats and safeguarding maritime security, Beijing’s space for escalation narrows.

C. North Korea’s sharp denunciation: leverage building for bargaining

North Korea’s response has been far more confrontational. Pyongyang has portrayed the SSN issue as a “nuclear domino” trigger and condemned alliance language emphasizing “complete denuclearization of North Korea” as denial of the DPRK’s legitimacy. Such framing supports Pyongyang’s longstanding strategy: to normalize its status as a de facto nuclear power while seeking phased sanctions relief and arms-control style negotiations with the U.S.

Importantly, DPRK leaders understand that SSN construction—if it proceeds—will require a decade or more. Yet Pyongyang uses the issue to pressure Washington politically and to argue that U.S. security cooperation with Seoul is incompatible with dialogue. The objective is to strengthen bargaining leverage for an eventual negotiation package: implicit nuclear recognition, sanctions easing, arms-control talks, and diplomatic normalization, with a view toward favorable changes in the U.S. force posture issues.

5. Policy Recommendations for the Lee Jae Myung Administration

A. Inter-Korean policy: readiness without illusion

Given Kim Jong Un’s declared rejection of engagement with Seoul for an extended period and DPRK’s pattern of ignoring South Korean outreach, early restoration of inter-Korean dialogue is unlikely. Seoul should therefore pursue a two-level approach: maintain a coherent long-term engagement framework while strengthening deterrence and crisis-management channels.

The administration’s END concept (Exchange–Normalization–Denuclearization) should be operationalized as a long-term architecture rather than a near-term diplomatic event. Seoul should prioritize incremental confidence-building where feasible (humanitarian channels and risk-reduction measures) while preparing to link inter-Korean engagement to any DPRK–U.S. contacts that may arise.

B. ROK-U.S. alliance: top-tier partnership with escalation control

The APEC cycle suggests a window to institutionalize a top-tier alliance that integrates security, supply chains, technology, and industrial cooperation. Seoul should treat tariff and investment packages not as isolated economic deals but as strategic instruments for alliance resilience and mutual dependence.

At the same time, Seoul must control escalation narratives. SSN cooperation should be presented consistently as a stabilizing defensive capability that improves maritime awareness and deterrence against North Korean threats. South Korea should avoid rhetorical linkage that implies automatic participation in extra-peninsular contingencies. Such discipline reduces China’s incentive to retaliate and limits DPRK propaganda opportunities.

C. DPRK-U.S. engagement: shape the track, avoid marginalization

Given the scale of North Korea’s nuclear capabilities and the possibility of continued growth, Washington may seek arms-control contact even without near-term denuclearization. Seoul should prepare to shape such engagement rather than oppose it reflexively. The priority is to prevent the Republic of Korea from being sidelined: maintain transparent, continuous coordination with Washington and define a facilitator role that aligns arms-control steps with Korean Peninsula stability.

D. ROK-China and ROK-Russia: practical buffering under sanctions compliance

Korea should stabilize ties with China through practical cooperation that does not compromise alliance obligations or sanctions compliance: tourism, culture, consumer industries, local-level exchanges, and selective supply-chain coordination. Given China’s sensitivity to Taiwan, Seoul should exercise rhetorical discipline and pursue a calibrated ambiguity that preserves crisis-management channels while supporting regional peace and stability.

With Russia, Seoul should maintain strategic communication and pursue limited functional cooperation within sanctions constraints, including logistics and Arctic-route discussions. Incremental normalization steps (air routes, cultural exchanges) can widen diplomatic options and reduce the risk of an uncontested DPRK–Russia consolidation.

E. ROK-Japan: forward-looking cooperation and two-track risk management

Seoul should deepen cooperation with Tokyo in advanced technology, economic security, and societal exchange while institutionalizing shuttle diplomacy. Historical and territorial issues, including Dokdo, should be managed through a disciplined two-track approach: prevent recurring escalation from derailing cooperation, while maintaining principled positions and crisis-response readiness.

(Table 1. Korea’s Long-Term Northeast Asia Strategy: Objectives-Risks-Buffers)