From Confrontation to Managed Stability in ROK-China Relations: The Lee Jae-myung Administration’s Policy Shift Toward China and an Assessment of the ROK-China Summit

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Jae-hung CHUNG

jameschung@sejong.org

Senior Research Fellow

Sejong Institute

1. Problem Framing: ROK-China Relations as a “Structural Environment” Rather Than a “Bilateral Issue”

Since the inauguration of the Lee Jae-myung administration, which has emphasized national interest centered pragmatic diplomacy, ROK-China relations have been framed not merely as a bilateral diplomatic relationship, but as a “structural condition of national strategy” that South Korea must directly manage amid a transitional international order marked by the protracted and increasingly multilayered nature of U.S.–China strategic competition.

The current international environment is shaped not only by the intensification of U.S.–China rivalry, but also by the prolonged war in Ukraine, escalating Japan–China tensions and the Taiwan issue, and rising military tensions across the region. These overlapping dynamics have expanded uncertainty and reinforced confrontational trends surrounding ROK–China relations.

Within this structural environment, South Korea must manage economic security risks that could arise from deterioration in relations with China, including supply chain instability, burdens in securing critical raw materials, and contractions in trade and investment. Conversely, even as it seeks to improve bilateral relations, Seoul must simultaneously address the complex challenge of managing the ROK–U.S. alliance and the security interdependencies embedded within it. Ultimately, the core strategic question becomes “how South Korea can secure sufficient space for strategic autonomy.”

Against this backdrop, three analytical questions are raised. First, what background factors and policy logic underpin the Lee administration’s shift in its China policy? Second, what were the substantive achievements and limitations of the January 2026 ROK–China summit? Third, what strategic implications would the improvement and restoration of ROK–China relations hold for the regional order? By examining the structural context of U.S.–China strategic competition, the logic of policy adjustment, and the concrete outcomes and constraints of the summit, this study seeks to present a research framework aimed at proposing future directions for South Korea’s China policy.

2. U.S.-China Strategic Competition and the Structural Dilemma in ROK-China Relations: The Securitization of the Economy and Intensifying Geopolitical Tensions

The first axis that defines the current U.S.–China strategic competition is the “securitization of competition for technological hegemony.” The rivalry between Washington and Beijing has expanded beyond the political, military, and security domains into a comprehensive contest encompassing technology standards, supply chains, financial order, and investment rules. As a middle power, South Korea faces mounting pressure to calibrate its strategic position between the “cost of alignment” and the “cost of non-alignment.” In particular, the second Trump administration has articulated a plan to intensify efforts to contain China along the first island chain under a U.S.-led Indo-Pacific strategy, while strengthening defense commitments and pressure on China through alliances with countries such as South Korea and Japan.

These U.S. policy orientations toward China, and the broader trajectory of U.S.–China relations, are felt immediately at the level of industry and firms. Institutional mechanisms such as the new guardrail provisions of the CHIPS Act, export controls targeting China including advanced semiconductor equipment and AI chips, uncertainties surrounding the Verified End Users (VEU) regime, the exclusion of Chinese-sourced critical minerals under the Inflation Reduction Act through the FEOC framework, and foreign investment screening regimes have compelled South Korean companies to recalibrate investment strategies and restructure supply chains between maintaining production bases in China and securing access to the U.S. market. Risks have become particularly concrete in areas such as difficulties in upgrading and maintaining production facilities in China, constraints on access to equipment, components, and software, expanded scrutiny of investments and mergers and acquisitions in both the United States and China, and heightened regulatory review exposure.

Second, China, under its perception of a “once-in-a-century transformation,” has accelerated the construction of a long-term national industrial and technological ecosystem while simultaneously strengthening export controls on strategic minerals such as gallium, germanium, and graphite, thereby weaponizing economic instruments for strategic purposes. The 2023 restrictions on exports of urea solution and graphite serve as illustrative cases. In an environment in which both the United States and China are strategically weaponizing economic tools, South Korea’s supply chain security and industrial competitiveness face unprecedented challenges.

Third, emerging regional geopolitical tensions, combined with Japan–China tensions, the Taiwan issue, and shifts in the situation on the Korean Peninsula, have amplified structural uncertainty. In particular, amid China’s increasingly firm demands that other states clearly state their positions on “core interests” such as Taiwan, South Korea faces growing pressure. Rather than aligning with a specific camp, Seoul is urged to assume a role as a crisis management facilitator to prevent escalation into regional confrontation and conflict. However, such a role is not easily realized.

Meanwhile, North Korea has further complicated the crisis management environment on the Korean Peninsula by formalizing its hostile “two-state doctrine,” advancing its nuclear capabilities, and deepening military and security cooperation with Russia. Notably, as reflected in the second Trump administration National Security Strategy, North Korean denuclearization was not explicitly mentioned, and the revised edition of China’s defense white paper no longer included language supporting denuclearization of the Korean Peninsula. These developments suggest that the structural environment for denuclearization itself is shifting and now functions as an additional constraint. Against the backdrop of these changes in the global security environment and regional dynamics, the space for ROK–China cooperation on the North Korean nuclear issue appears to be narrowing amid intensifying U.S.–China competition, Japan–China tensions, accelerating Russia–North Korea cooperation, and the recovery of China–North Korea relations.

When these structural conditions are considered in their entirety, the earlier functional division formula of “security with the United States, economy with China” is steadily losing practical validity. South Korea now confronts a far more complex strategic environment, one that requires maintaining the ROK–U.S. alliance while simultaneously preserving economic and public welfare leverage through cooperation with China. In effect, Seoul is being pressed to pursue a high-level balancing strategy between the United States and China in order to substantively expand its space for strategic autonomy, a task that entails significant difficulty and structural constraint.

3. The Lee Jae-myung Administration’s Policy Shift Toward China: A Policy Framework of “National Interest-Centered Pragmatic Diplomacy”

The foreign policy of the newly inaugurated Lee Jae-myung administration can be summarized as “national interest–centered pragmatic diplomacy.” This approach marks a departure from the rigidity of ideology- and value-based diplomacy, prioritizing a pragmatic strategy that places citizens’ livelihoods and substantive national interests at the forefront. Its core lies in maintaining the robust ROK–U.S. alliance as the primary axis while expanding the space for strategic autonomy to avoid subordination to great power politics. Within this framework, China policy is being reshaped through “selective cooperation and issue-specific alignment,” pursuing optimal choices on a case-by-case basis.

The shift in the Lee Jae-myung administration’s China policy is rooted in the legacy and limitations of the preceding Yoon Suk-yeol administration. Following the THAAD deployment, ROK–China relations cooled significantly. The strengthening of the ROK–U.S. alliance, the institutionalization of ROK–U.S.–Japan cooperation, and the announcement of the Korean version of the Indo-Pacific strategy contributed to a contraction in bilateral exchanges and the accumulation of mutual distrust. While the Yoon administration’s value-based diplomacy enhanced South Korea’s international standing, relations with China, South Korea’s largest trading partner and a critical supply chain partner, deteriorated sharply, generating substantial costs in terms of economic security and public welfare. The persistence of the “Hallyu Ban,” instability in the supply of urea solution, and concerns over controls on critical minerals such as rare earth elements and graphite illustrate how deterioration in bilateral relations can directly translate into economic security risks.

Accordingly, the Lee Jae-myung administration has redefined ROK–China relations not as an “optional choice” but as a “structural condition that must be managed and adjusted.” It emphasizes a vision of “harmonious yet distinct (Hwa-i-bu-dong)” relations, seeking to prevent political and security frictions from spilling over into economic and livelihood cooperation. At the same time, recognizing that contentious issues, including the North Korean nuclear problem, maritime boundary questions in the West Sea, and the Hallyu Ban, are unlikely to be resolved in the short term, the administration aims to build a “stable and coexistence-oriented ROK–China relationship” through sustained communication and managed cooperation.

The restoration of bilateral ties has been pursued in a phased yet compressed manner. The roadmap, beginning with the first leaders’ phone call in June 2025, followed by their first in-person meeting at the Gyeongju APEC summit in November 2025, and culminating in the Beijing summit in January 2026, can be interpreted as a strategic effort to bridge an approximately nine-year gap in presidential visits to China at an early stage.

4. Key Outcomes of the ROK-China Summit: Political and Diplomatic Affairs, Economic and Livelihood Issues, Cultural and People to People Exchanges, and Foreign and Security Policy

A. Politics and Diplomacy: Restoring High-Level Communication Channels and Institutionalizing Summit Diplomacy

President Lee Jae-myung paid a four-day state visit to China from January 4 to 7, 2026, marking the first presidential visit in approximately nine years. During the visit, he declared 2026 the “inaugural year of the comprehensive restoration of ROK–China relations” and sought to shift the bilateral relationship toward one grounded in mutual trust at the leadership level. In addition to his summit meeting with President Xi Jinping, President Lee held consecutive talks with other senior Chinese leaders, including Premier Li Qiang, Zhao Leji, Chairman of the Standing Committee of the National People’s Congress, and Chen Jining, Party Secretary of Shanghai. These engagements reflected a multilayered diplomatic approach extending beyond summit level interactions.

The political and diplomatic outcomes of the summit can be summarized in four principal aspects. First, it consolidated the political foundation for the comprehensive restoration of ROK–China relations. Second, it strengthened practical cooperation centered on public welfare and livelihood issues. Third, it expanded strategic communication aimed at peace and stability on the Korean Peninsula. Fourth, it established a framework for the stable management of sensitive issues, including stability in the West Sea and cultural exchanges.

B. Cultural and People-to-People Exchanges: A “Phased Restoration” Rather Than “Full Lifting” of the Hallyu Ban, and Management of Public Sentiment

In the realm of cultural and people-to-people exchanges, discussions were held regarding the lifting of the “Hallyu Ban” and the restoration of cultural and content exchanges. However, both sides agreed that the full-scale resumption of K-pop, television dramas, and films would be pursued subject to working-level consultations. Specifically, they decided to proceed incrementally, beginning with sectors of lower political sensitivity, such as Go (Baduk) and football.

To mitigate the broadly intensified anti-Korea and anti-China sentiments, both sides agreed to expand exchanges across youth, media, local governments, and academic communities. Furthermore, they committed to strengthening historical and cultural ties through symbolic measures, including consultations on panda loan arrangements, the donation of cultural heritage items, and the preservation of sites related to the Korean independence movement.

C. Economy and Public Livelihood: 14 MOUs and a Substantive Cooperation Package for "Tangible Restoration of Relations"

The economic and public welfare domain constituted the most consequential pillar of the recent ROK–China summit and yielded a measure of tangible progress. A total of fourteen MOUs were concluded following the summit, with a deliberate emphasis on practical exchanges and cooperation to ensure that citizens could perceive the benefits of restored bilateral relations. Key outcomes included progress in negotiations on services and investment under the ROK–China FTA, expanded cooperation in services market access, collaboration on critical minerals and supply chains, environmental and climate cooperation, partnerships in the digital economy and venture and startup sectors, and joint responses to demographic challenges such as low birth rates and population aging, including cooperation in silver industries, healthcare, biotechnology, pharmaceuticals, and child welfare.

The fourteen MOUs were pursued as a continuation of the six agreements concluded at the November 2025 Gyeongju APEC summit. They carry significance in that they attempt to move beyond the earlier linear division of labor characterized by “Korean technology provision and Chinese large-scale production bases,” and instead signal a transition toward more horizontal forms of cooperation under conditions of technological competition. In particular, the MOU establishing a regular “Economic Cooperation Dialogue” between South Korea’s Ministry of Trade, Industry and Energy and China’s Ministry of Commerce represents a meaningful institutional development that differentiates this round of agreements from past one-off arrangements.

At the same time, structural limitations remain. Many of the fourteen MOUs take the form of nonbinding memoranda containing declaratory diplomatic language. Ensuring substantive implementation will therefore depend on follow-up measures and the establishment of performance indicators to translate these understandings into concrete cooperative projects. Given past instances in which ROK–China MOUs were suspended amid shifts in the political and diplomatic environment, institutionalizing sector-specific implementation roadmaps and monitoring mechanisms will be essential.

The fourteen MOUs concluded at this summit can be broadly categorized into four areas: (1) society, demographics, and culture; (2) environment, climate, and natural resources; (3) industry, digital economy, technological innovation, and infrastructure; and (4) trade, quarantine, food safety, and intellectual property. These include cooperation to enhance child rights and welfare, joint scientific and technological innovation to address global issues such as climate change, expanded environmental and climate cooperation with regularized consultations, collaboration in national park management, digital technology cooperation including software and cybersecurity, partnerships in transportation and future mobility, AI-based venture and startup cooperation, promotion of industrial complex exchanges and investment, food safety and quarantine cooperation including fisheries hygiene, and strengthened protection of intellectual property rights.

D. Foreign Affairs and Security: Managing "One China" Risks and Stabilizing the West Sea (PMZ)

At the recent ROK-China summit, China clarified its position on core interests, including the Taiwan issue, and explained its basic stance in the context of South Korea’s foreign and security strategy. In particular, prior to his visit to China, President Lee Jae-myung stated in an exclusive pre-recorded interview with China Central Television that the understanding reached at the time of the establishment of diplomatic relations remains valid and that South Korea respects the “One China” principle. While this position may be regarded as a precondition for improving bilateral ties strained since the THAAD deployment, it also carries the potential to be interpreted negatively by the United States and Taiwan. Accordingly, careful risk management, including close communication within the ROK–U.S. alliance to prevent misperceptions, will be required.

Meanwhile, the issue of structures within the West Sea Provisional Measures Zone, PMZ, has emerged as a particularly sensitive test case within the framework of a managed relationship. At the summit, the two leaders reaffirmed their shared understanding of the West Sea as a “peaceful and friendly sea.” They also reached consensus on convening, at an early date, vice ministerial level official talks on maritime boundary delimitation in order to address issues related to structures in the PMZ, illegal fishing, and maritime boundary disputes. Specifically, the two sides agreed to continue negotiations and to hold vice ministerial level talks in 2026 to seek progress on the PMZ structures, illegal fishing, and boundary delimitation issues.

China’s partial removal of certain structures in the West Sea can be interpreted as reflecting multiple considerations, including the need to ease anti Chinese sentiment in South Korea, maintain stable supply chains with neighboring countries, and promote investment cooperation. It may also be viewed as a practical measure aimed at discouraging excessive alignment among South Korea, the United States, and Japan amid deteriorating regional conditions, while fostering a favorable atmosphere in ROK–China relations to revitalize economic cooperation and people to people exchanges.

Furthermore, progress was made toward institutionalizing foreign and security dialogue. The two sides agreed to regularize the “Foreign and Defense 2+2 Strategic Dialogue,” enhance mechanisms to prevent unintended incidents in the West Sea and within the Korea Air Defense Identification Zone, resume high level discussions on denuclearization and a peace regime on the Korean Peninsula, and strengthen crisis management capabilities. Notably, President Lee urged China to play a constructive role in facilitating the resumption of dialogue with North Korea. China, for its part, emphasized the importance of mutual cooperation and communication for peace and stability on the Korean Peninsula and expressed its intention to sustain ongoing dialogue and cooperation.

E. Policy Implications: Shifting from “Stalemate to Management” toward “Management to Development” in ROK-China Relations

President Lee Jae-myung’s state visit to China marks an important milestone in shifting ROK–China relations “from stalemate to management” after nearly nine years of strain. However, advancing from “management to development” will require more than diplomatic declarations; it depends on concrete implementation and tangible outcomes. Under the structural constraints of U.S.–China strategic competition, the ultimate success of the Lee administration’s pragmatic China policy will be determined by the follow-up process over the next two to three years.

Furthermore, if bilateral relations are not effectively managed, the “China risk” could evolve into a significant strategic dilemma for South Korea. To mitigate this risk, Seoul must maintain a pragmatic diplomatic posture that avoids excessive alignment with either side while exploring new multilateral frameworks that reflect evolving global dynamics. Establishing a stable foundation through functional cooperation in areas such as economic security, supply chain resilience, and climate policy will remain essential.

Ultimately, the benchmark for assessing ROK–China relations should not rest on diplomatic rhetoric but on the delivery of results that produce substantive improvements in citizens’ lives. In this sense, the “comprehensive restoration” of bilateral ties remains conditional. Only through the substantive implementation of the fourteen MOUs, the full lifting of the Hallyu Ban, and visible progress on West Sea issues can a comprehensive restoration be credibly affirmed. To ensure that these agreements do not become one-off declaratory arrangements, as in the past, it is imperative to establish sector-specific implementation roadmaps and performance monitoring mechanisms at an early stage.

F. Future Tasks and Directions: Implementation as the Litmus Test for Diplomatic Success

The overarching policy implication of the ROK–China summit can be summarized as follows: the restoration of relations is fundamentally a matter of implementation rather than agreement. Going forward, the institutionalization of annual summits and the activation of strategic dialogues across foreign affairs, security, economic, and industrial domains should be accompanied by a quarterly performance review mechanism. To ensure effective implementation of the fourteen MOUs, the establishment of sector-specific standing consultative bodies will be essential. At the same time, Seoul should deepen cooperation on critical mineral supply chains while pursuing de-risking strategies aimed at diversifying external dependencies.

A key priority will be the early operationalization of the “ROK-China Economic Cooperation Dialogue.” This requires institutionalizing regular communication between South Korea’s Ministry of Trade, Industry and Energy and China’s Ministry of Commerce, supported by a phased implementation roadmap with 100-day, one-year, and three-year benchmarks. Such a framework could facilitate the restructuring of bilateral economic relations toward mutually beneficial interdependence, including cooperation in advanced industrial technologies and progress in follow-up FTA negotiations. In addition, alignment with China’s Fifteenth Five-Year Plan may create opportunities for South Korean firms to expand into high-value emerging sectors and pursue joint entry into third-country markets. At the same time, for minerals such as gallium and graphite, where reliance on China remains significant, a parallel strategy of stabilizing Chinese supply while securing alternative sources in Australia, Canada, and Africa will be required.

Finally, cooperation in climate and environmental sectors can function as a stabilizing pillar of bilateral relations. Given that these areas remain relatively less politicized within the broader context of U.S.–China strategic competition, they offer a feasible and durable foundation for cooperation. Addressing highly visible issues such as fine dust and yellow dust may also provide a pragmatic starting point for rebuilding public trust and strengthening the sustainability of ROK–China relations.

G. Conclusion: Completing the Shift from “Stalemate to Management” through “Tangible Results for the Public”

President Lee Jae-myung’s state visit to China, the first in nearly nine years, represents a symbolic turning point that has shifted ROK–China relations “from stalemate to management.” The future trajectory of bilateral ties now depends on whether this phase of management can evolve into one of development through effective implementation.

Over the next two to three years, key evaluative criteria will include the extent to which the “Hallyu Ban” is substantively lifted; whether the fourteen MOUs produce measurable outcomes in investment, trade, services market access, and supply chain stability; and whether West Sea issues, including those related to the PMZ, are managed through institutionalized negotiation frameworks and mechanisms for preventing unintended incidents. Equally important will be South Korea’s capacity to manage associated risks in a manner that does not generate friction within the ROK–U.S. alliance framework.

Ultimately, the success or failure of the Lee administration’s “national interest–centered pragmatic diplomacy toward China” will not be determined by the persuasiveness of diplomatic declarations alone. Rather, it will be assessed on the basis of whether a verifiable implementation system, supported by quarterly review mechanisms, time-bound roadmaps with defined KPIs, strengthened supply chain and economic security capacities, and the steady accumulation of functional cooperation in areas such as climate and environmental policy, delivers “tangible and substantive improvements in citizens’ lives.”