China warns South Korea against politicizing trade talks amid rising tensions

In Seoul, Chinese Premier Li cautioned South Korea against politicizing trade talks, as the two nations resumed discussions ahead of a trilateral summit with Japan amid escalating tensions in the Indo-Pacific region.

In a bid to navigate escalating tensions in the Indo-Pacific region, China has issued a cautionary note to South Korea against politicizing economic matters, as both nations agreed to resume trade discussions ahead of a long-awaited trilateral summit involving Japan.

Chinese Premier Li Qiang, representing President Xi Jinping’s administration, engaged in high-level talks with South Korean President Yoon Suk Yeol in Seoul on Sunday. This meeting comes amidst China’s pushback against mounting U.S. controls on chip sales to Chinese firms and escalating tariffs on Chinese clean-tech exports under President Joe Biden’s administration.

Premier Li emphasized the deeply intertwined supply chains between China and South Korea and advocated for keeping economic and trade issues separate from political or security concerns, according to reports from Xinhua, China’s state news agency.

The resumption of trade talks between China and South Korea precedes a significant trilateral summit involving Japan, set to take place on Monday. This gathering marks the first time leaders from the three countries have convened in over four years, aiming to bolster economic ties amidst military tensions in the region.

While this diplomatic endeavour signals a potential thaw in regional relations, underlying geopolitical complexities loom large. Japan and South Korea find themselves at the centre of U.S. efforts to curb Chinese access to advanced semiconductor technologies. Both nations have faced pressure from Washington to tighten export restrictions on crucial chip-making equipment to China.

The trilateral summit agenda, spearheaded by South Korea’s principal deputy national security adviser Kim Tae-hyo, encompasses discussions on economy and trade, science and technology, and people-to-people exchanges. However, conspicuous by their absence are contentious security-related topics such as North Korea’s nuclear program and the Taiwan issue.

President Yoon’s previous remarks on Taiwan’s status have sparked ire from Beijing. Last year, he attributed tensions over Taiwan to China’s attempts to alter the status quo by force. Beijing responded by summoning South Korean and Japanese diplomats to protest their countries’ lawmakers’ attendance at the inauguration of Taiwan’s President Lai Ching-te.

The announcement of the trilateral summit was delayed until mere days before the arrival of Premier Li and Japan’s Prime Minister Fumio Kishida in Seoul, reflecting sensitivities surrounding the Taiwan issue. China regards Taiwan as part of its territory and has threatened forceful annexation if Taipei resists indefinitely.

As diplomatic negotiations unfold, uncertainties loom over the prospects of substantive progress, particularly concerning a trilateral free trade agreement (FTA). Initial aspirations for an FTA were hindered by China’s reluctance to open up its services sector. Now, despite China’s willingness, South Korea remains cautious due to concerns over competitiveness against its Chinese counterparts.