Challenges and Opportunities for Restarting Taiwan-South Korea Relations

Challenges and Opportunities for Restarting Taiwan-South Korea Relations

Challenges and Opportunities for Restarting Taiwan-South Korea Relations

Global semiconductor manufacturing giants Taiwan and South Korea have emerged as key players in a US-led endeavor on supply chain security. The Biden Administration, in addition to the governments of Germany and Japan, has enlisted help from Taiwan Semiconductor Manufacturing Company (TSMC, 台灣積體電路製造股份有限公司) to alleviate the global microchip shortage that has halted production at several auto factories, while both TSMC and South Korea’s Samsung Electronics are setting up new chip factories in the United States. A new partnership involving the United States, Taiwan, South Korea, and Japan focused on ensuring supply chain security could bring Taiwan and South Korea, two like-minded yet distant democracies, closer together within a US-led regional cooperative framework. It could also bolster South Korea’s position within the US regional alliance structure and weaken Beijing’s persistent efforts to pry Seoul away from Washington.

South Korea: A Weak Link in US Asian Alliances

As a major US ally in East Asia, South Korea is critical to the Biden Administration’s strategy for developing a multilateral approach to countering the People’s Republic of China (PRC). In its Interim National Security Strategic Guidance, issued in March, the White House stated that it will “forge a common approach with like-minded countries” to support Taiwan and “stand up for democracy, human rights, and human dignity, including in Hong Kong, Xinjiang, and Tibet.” However, Chinese Ambassador to South Korea Xing Haiming (邢海明) called on Seoul in February to “respect China’s positions on the issues of Taiwan and Hong Kong.” As a result, South Korea finds itself caught between its US ally and its largest economic partner China.

Beijing was quick to exploit South Korea’s position as the weakest link in the US Asian alliance structure. Chinese President Xi Jinping (習近平) moved quickly to reach out to South Korean President Moon Jae-in’s government in an effort to preempt the Biden Administration’s first steps towards consolidating an anti-China coalition of democracies. The Chinese president held a phone conversation with Moon on January 26 of this year, reiterating his support for Moon’s priorities, including talks between the United States and North Korea and an inter-Korean dialogue. Indeed, Beijing’s critical role in bringing Pyongyang back to the negotiating table should not be understated. Xi’s call occurred more than a week before President Biden placed his first phone call to Moon on February 3. The Biden Administration has expressed its desire to mend South Korea-Japan tensions, particularly as the rift between the two US allies has created openings for Beijing to capitalize on and showcase its regional leadership. In their January phone conversation, Xi also informed Moon of his intent to push forward on reaching the second phase of the China-South Korea free trade agreement and the construction of the China-Japan-South Korea free trade area.


Seoul is still reeling from its experience under Chinese sanctions over the controversial deployment of the US Terminal High Altitude Area Defense (THAAD) anti-ballistic missile defense system in its country in 2016. Beijing imposed numerous sanctions and bans that sent shock waves throughout South Korea’s economy and entertainment industry. China banned Chinese tour groups to South Korea, closed several Lotte stores in China, and restricted imports of South Korean automobiles, cosmetics, and K-pop, costing the country more than USD $7.5 billion in economic losses. The THAAD system remains deployed in South Korea, and President Moon was unsuccessful in lobbying the Chinese government to drop its stringent sanctions against Seoul during his four-day visit to Beijing in December 2017.

The discomforting experience over THAAD has left South Korean policymakers wary about invoking “a second THAAD.” Such fears were reignited when the Trump Administration urged Seoul not to use Huawei Technologies (華為) products in 2019. A top adviser to President Moon, Chung-in Moon, wrote in Korean media that South Korea should be cautious about joining regional security frameworks such as the Quadrilateral Security Dialogue (the Quad), a “diamond of democracies” currently comprising the United States, Japan, Australia, and India. He argued that joining a multilateral alliance against China could potentially bring conflict to South Korea’s maritime areas, portending aggressive Chinese military action in the Yellow Sea. Indeed, China’s use of coercive economic tools against South Korea has become a form of psychological warfare, conditioning Seoul to avoid behaviors that might further antagonize Beijing.

Economic Competition and National Rivalry

Following a bitter termination of diplomatic relations in 1992, Taipei-Seoul relations have confronted another chilly front stemming from their longstanding economic competition and rivalry. In the 1970s and 1980s, Taiwan and South Korea were heralded as two members of the “Four Asian Tigers”—along with Singapore and Hong Kong—for their rapid economic industrialization and export-oriented growth. Taiwan once occupied an enviable position at the head of this pack, with South Korea trailing at the tail end. However, a reversal of economic fortunes has left Taiwan behind. Over the past two decades, South Korea’s economic competitiveness and export volume have surpassed those of Taiwan, generating anti-Korean sentiment within Taiwanese society that has even extended into sports such as Taekwondo and baseball. Adding to this antipathy, TSMC and Samsung are industry rivals, though the South Korean tech firm’s market share and technology still lag far behind that of TSMC.

Therefore, when South Korean newspaper Chosun Ilbo published a December 2020 article praising Taiwan for its successful management of COVID-19, Taiwanese media and talk shows reacted with surprise and pride that South Korea was finally paying attention to Taiwan—while also noting that the island was beating South Korea on pandemic control. Indeed, South Korea has experienced more than 99,000 COVID-19 infection cases and more than 1,600 deaths, compared to a little over 1,000 infection cases (mostly imported cases) and only 10 deaths in Taiwan. It was an acknowledgment that Taiwanese have long waited to hear from the South Koreans—partially to heal old wounds, but also because Taiwan President Tsai Ing-wen (蔡英文) has increasingly sought to decouple from the Chinese economy, whereas Moon has prioritized economic engagement with China. The Chosun Ilbo article warned that the Moon government’s economic dependence on China could cause the South Korean economy to fall further behind that of Taiwan. As a result of its effective COVID-19 mitigation efforts, Taiwan’s economy is expected to grow by 4.64 percent this year, according to the island’s statistics bureau. South Korea is also expected to make an economic comeback, but at a relatively slower rate of 3.1 percent, based on an assessment by the International Monetary Fund (IMF).

Like-Minded Democracies but Still Far Apart

The Republic of China (ROC) and Republic of Korea (ROK) are two like-minded democracies with similar national trajectories that have nevertheless failed to utilize their full potential in collaborating on regional issues. Although Taiwan and South Korea enjoy robust economic and trade relations—with two-way trade reaching USD $35.7 billion in 2020—and strong pre-pandemic tourism flows, cooperation on political and security issues remains stagnant. Seoul has stopped short of building higher-level political and security collaboration with Taipei due to fears of upsetting Beijing. South Korea, for example, declined to advocate for Taipei’s participation in the World Health Organization (WHO), even after the US Congress sent it a letter asking for its support in May 2020. Diplomatic insiders in South Korea have posited that Xi may have requested that Moon object to Taipei’s bid to regain WHO observer status during a phone conversation on May 13, 2020.

Under current circumstances, Seoul is unlikely to become a vocal advocate for Taipei’s security situation vis-à-vis China or contribute to its quest for greater international recognition. Currently, Seoul calculates that the costs of infuriating Beijing on a range of issues, including Taiwan, are too high for it to bear. While there is a legitimate reason to fear a THAAD redux, South Korean policymakers have also learned harsh lessons from the risks of depending too heavily on the Chinese economy. There is a clear need for both Taipei and Seoul to diversify their foreign relationships.

There are several potential areas for Taipei-Seoul cooperation. First, Seoul may have overlooked Taipei’s contributions to the international non-proliferation regime, in particular on the enforcement of United Nations Security Council sanctions against North Korea. While Taiwan’s government has vowed to play a responsible role on the issue of North Korean sanctions enforcement, several Taiwanese individuals and entities have been sanctioned by Washington for their involvement in illegally shipping petroleum to North Korea and illegally financing North Korean missile programs. Taipei could work closely with Seoul to share information and intelligence on illegal North Korean ship-to-ship transfers and other actions by its citizens that contravene UN sanctions. Second, both Taiwan and South Korea are seeking to direct more financial capital into Southeast Asia. Tsai’s “New Southbound Policy” (NSP, 新南向政策) and Moon’s “New Southern Policy Plus” strategy share similar goals on investing and shifting supply chain production to factories in Southeast Asia. Both sides could jump-start cooperative ties on Southeast Asia under the US Indo-Pacific Strategy, such as by working with Washington to finance infrastructure projects to counter the appeal of China’s Belt and Road Initiative (BRI, formerly known as “One Belt, One Road,” 一帶一路) in the region. Third, the Biden Administration’s supply chain security alliance is a new regional mechanism that could potentially bring these two distant US partners closer together.

Ultimately, the South Korean government will need to assess how well its China policy has served its economic and national interests. Taiwan faces similar challenges under China’s multifaceted pressure campaign, but it has chosen a different path than South Korea. If Seoul chooses to hedge more definitively against the China threat, Taiwan could offer South Korea some lessons on economic decoupling from China and managing the onslaught of Chinese influence operations targeting society and the media. Perhaps then substantive progress could be made in boosting bilateral relations between these two like-minded partners, as well as buttressing the Biden Administration’s multilateral approach to dealing with China.

The main point: Beijing is attempting to divide the United States’ Asian alliances by targeting South Korea, the weakest link in the alliance structure. While there are many areas where Taiwan-South Korea relations could be strengthened, the China factor remains a major barrier to doing so.

(The author would like to thank GTI Spring 2021 Intern Gavin Stark for his research assistance.)