Introduction: Decomposing and Assessing South Korea’s Hedging Options

Increasingly scholars have opined that South Korea’s response vis-à-vis a rebalancing United States and a resurgent China—like that of other Asian states (except Japan and the Philippines)—is neither pure-balancing nor pure-bandwagoning, but a less straightforward approach commonly termed “hedging.”¹ That is, rather than completely siding with one power against the other, Seoul has opted to hedge by adopting ambiguous and at times contradictory measures aimed at cultivating a long-term fallback position amid enduring uncertainty. Under President Park Geun-hye, while Seoul has continued to uphold the ROK-US alliance as the bedrock of its external strategy, it has gradually developed a stronger partnership with Beijing, seeking “harmony with China,” entering into a bilateral FTA, and joining (albeit belatedly) the Beijing-led AIIB, but defying China’s unilateral announcement of an ADIZ over the East China Sea, and displaying displeasure over Beijing’s pressure on the proposed deployment of the US THAAD system in South Korea. These counteracting behaviors are unmistakably hedging.

Indeed, at issue is not whether South Korea hedges, but in what way and to what extent it chooses to hedge. This introductory essay decomposes Seoul’s foreign policy options into five constituent components of hedging: economic-pragmatism, binding-engagement, limited-bandwagoning, dominance-denial, and indirect-balancing (see Figure 1).² These components perform two distinct functions: the first three serve to maximize economic, diplomatic, and geopolitical benefits vis-à-vis the competing powers (hence the label “returns-maximizing” measures), whereas the latter two seek to serve as insurance and mitigate mid- or long-term risks potentially detrimental to South Korea’s existential interests (hence “risk-contingency”). Acting together, these two-pronged measures allow Seoul to maximize benefits when all is well (by capitalizing and cashing in the dividends of its multidimensional, middle-power strategy), but simultaneously to prepare for contingencies (by cultivating various political and military portfolios to mitigate various forms of risks embedded in uncertain power relations).

These measures are mutually counteracting in two senses. First, they offset, negate, and compensate the downsides and limitations of one another (e.g. selectively defying Beijing’s will in order to offset the drawback of developing an increasingly closer economic and strategic partnership with China; diversifying Seoul’s long-term geostrategic portfolios in order to negate the uncertainty and exposed risk of over-relying on its alliance with Washington). Second, the concurrent adoption of contradictory measures (pleasing and displeasing each of the competing powers across issues and across time) serves to instill a sense of ambiguity in Seoul’s foreign policy posture, thereby inculcating an image of not siding with or against any power. Ultimately, these mutually counteracting measures are aimed at keeping a fallback position, avoiding irreversible commitment, and reducing loss should circumstances change as a result of possible fluctuations in power relations.

FIGURE 1: Power-Response Spectrum. Adapted from Kuik 2008; Kuik and Rozman 2015 (forthcoming)

These counteracting dynamics are played out in the five foreign policy options discussed in this Special Forum: self-reliance (enhancing South Korea’s own military preparedness and deterrence), alliance-reliance (strengthening the ROK-US alliance), executing a multi-dimensional strategy to reclaim its diplomatic ownership (which includes an effort to develop a productive partnership with China as one of its pillars), resuming the Six-Party Talks, and rethinking middle power diplomacy (which advocates an adjustment of Seoul’s foreign policy outlook, to be realistically re-oriented commensurate with the degree of its relative power and identity in the regional context).

These policy options, of course, are not entirely either-or options. They entail elements that can be, in fact have been, implemented side-by-side, albeit with different emphasis, combination, and evolving manifestations. Some elements clearly converge, complement, and reinforce each other. For example, strengthening its alliance with the United States helps to boost South Korea’s own military modernization programs. Enhancing its own defense and deterrence capabilities, on the other hand, allows Seoul to pursue a more independent policy, increases its middle-power credentials, improves its position within the alliance, enhances its leverage in dealing with Beijing, and potentially raises the possibility of reviving the Six-Party Talks (if Pyongyang realizes that it does not enjoy military superiority over Seoul), thereby elevating South Korea’s ability to cope with the DPRK, while consolidating dominance-denial and indirect-balancing vis-à-vis China. Finally, developing a stronger partnership with Beijing creates favorable conditions for Seoul to deal with Pyongyang, alongside enhancing its capacity to pursue middle-power diplomacy and a more active multi-dimensional strategy to reclaim its diplomatic ownership at a time of uncertainty.

Nevertheless, some of these options inherently embody directions and policy actions that diverge, compete, and even contradict each other. For instance, there exists a long-term dilemma between alliance-reliance and self-reliance. In addition, rigidly tying its strategy to its alliance with America risks reducing South Korea’s own maneuvering space for middle power diplomacy, risks limiting the scope of its cooperative partnership with China, and risks provoking the DPRK’s military actions. Disproportionately developing its strategic cooperation with Beijing, on the other hand, runs the risk of inviting political interference, economic dependence, and even security challenges over the long term. Finally, over-playing the exigency of reclaiming diplomatic ownership and middle power strategy might reveal Seoul’s own limitations in protecting and advancing its interests at the regional level, thereby exposing its external vulnerabilities in an increasingly volatile environment.

Below, this introduction first explicates the range of threats and risks confronted by South Korean policymakers. This is necessary because policy response is often a function of the perceptions of risks. It is the nature, magnitude, and ordering of perceived risks (relative to available resources and supports) at a given time that prompts policymakers to choose certain combination of feasible options over the others. The article then assesses: (a) in what way do the five policy options entail elements of economic-pragmatism, binding-engagement, limited-bandwagoning, dominance-denial, and indirect-balancing; and (b) to what extent do the options’ differing emphasis on these elements facilitate or impede them from performing the dual hedging functions of returns-maximizing and risk-contingency.

Threats and Risks

South Korea confronts multiple forms of threats and risks. Three are the most profound. First and foremost, Seoul faces growing military threats from the DPRK’s nuclear weapons, other WMD, ballistic missile programs, and cyber capability. These threats have grown after the DPRK’s nuclear tests, the sinking of the Cheonan in March 2010, and the shelling of Yeonpyeong-do in November 2010.

Second, South Korea is also facing the multiple challenges of living with a rising and increasingly assertive China. It is concerned about the uncertainties surrounding Beijing’s future strategic intentions, worrying that an increasingly powerful China might seek to dominate Northeast Asia. In addition to power asymmetry and its geographical proximity to China, South Korea’s anxiety is also attributable to the ongoing disputes over Ieodo or Suyan Rock, as well as the overlapping maritime claims to their EEZ in the West or Yellow Sea. There is likewise concern about the deepening economic dependence on China.

Third, South Korea is acutely concerned about the risks of uncertainty in great power relations, particularly the danger of entrapment into possible US-China conflict. While the growing US-China rivalry in recent years has had systemic effects impacting almost all regional states, no country faced greater pressure than South Korea, in part because of its identity as a US ally, its close proximity to China, its ambivalent historical memory of the sinocentric tributary system, its ongoing security concerns over the DPRK, and the Seoul-Tokyo imbroglio. As observed by Terence Roehrig, “If US-Sino relations deteriorate, South Korea will be in a difficult spot and will be part of the chessboard for the resulting clash of wills.” There is also a quiet concern about the US long-term strategic commitment and the certainty of the US alliance system as a pivotal source of security assistance. According to Hong Kyudok, Seoul sees the danger that might result from a possible reduction in US defense spending or “a change in its strategic priorities.”

Given the multiplicity of risks as well as the prevailing uncertainty in US-China relations, South Korea is not likely to opt for any single or straightforward policy, as discussed below. Instead, it is more likely to hedge by choosing a bundle of mutually reinforcing but at times counteracting strategies.

Weighing the Hedging Options

To mitigate the above threats and perceived risks, Seoul possesses a range of policy options. This Special Forum, as noted, considers five: Option 1, enhancing military deterrence (by Hong Kyudok); Option 2, strengthening the ROK-US alliance (Terence Roehrig); Option 3, reclaiming diplomatic ownership (Choi Young Jin); Option 4, resuming the Six Party Talks (Cheng Xiaohe); and Option 5, rethinking middle power diplomacy (Gilbert Rozman). Each of these options in and of itself does not constitute a hedging act, but their combinations (two or more) do contain mutually counteracting elements that qualify them as hedging behavior (albeit in varying degrees and forms).

Because the primary threat is the growing military threat from the DPRK, the primary policy tools for Seoul are the two military approaches of enhancing its own defense and deterrence capabilities (Option 1) as well as strengthening the ROK-US alliance (Option 2). These approaches have been and will remain indispensable means to mitigate, check, and counter-balance North Korean threats. Hong writes, “In the face of the intensifying threat from North Korea, the option that should be foremost in the strategic calculus of South Koreans is enhancing their country’s capacity for deterrence, relying, above all, on their own military forces and only secondarily on those of the United States.” Roehrig similarly highlights the salience of military force, but stresses the relative importance of Option 2: “Given North Korea’s varied capabilities and increasing threat potential…there is ample reason to conclude that the highest priority for leaders in Seoul should be strengthening the alliance with the United States. In extended deterrence and missile defense, the United States has no peer.”

Yet, despite the centrality of internal and external balancing as a tool to cope with the DPRK threats, it is neither a desirable nor a feasible approach to respond to the more diffuse, longer-term risks surrounding the rise of China. Indeed, as far as Seoul’s China policy is concerned, pure-balancing (a complete adoption of Options 1 and 2 targeted directly at Beijing) is a non-starter, because the military-based approaches will be strategically dangerous (raising the risk of entrapping South Korea into any potential US-China conflict), economically unwise (resulting in the loss of lucrative commercial interests that can be gained from China), and politically counter-productive (antagonizing a pivotal actor that is key to the management of the DPRK question, along with turning a potential concern into an immediate enemy, thereby distracting the ruling elites from concentrating on their domestic political functions). These costly drawbacks dictate that, under the current structural conditions, Options 1 and 2 would only be partially and indirectly implemented vis-à-vis China. In fact, Seoul’s concerns about the ramifications of the substantial strengthening of the US-Japan alliance (especially after the Abe-Obama Summit in April 2015) on the prospects of US-Korea-Japan trilateral relations—which further situates South Korea as a junior, if not a marginal, partner in the triangle—might have further dissuaded it from increasing its bet on Option 2.

Options 1 and 2—if they were implemented as the principal policies of South Korea’s alignment posture towards the competing powers—would mainly serve the functions of dominance-denial and indirect-balancing (the “risk-contingency” measures, see Figure 1) vis-à-vis China. These measures would allow Seoul to mitigate geopolitical and security risks (avoiding subservience to Beijing, and discouraging China from taking revisionist security actions in Northeast Asia). If they are implemented without an equal or greater effort to pursue the “returns-maximizing” measures, then these geopolitical and security benefits will be gained at the price of foregoing substantive economic and diplomatic benefits that could have been acquired from a more cordial relationship with the neighboring giant. Such policies, which constitute a heavy-hedging approach because of its relative emphasis on risk-contingency measures (over returns-maximizing actions), are likely to happen only if and when the perceived risks from China have become sufficiently high.

However, if the two measures are counteracted by a greater endeavor to simultaneously pursue economic-pragmatism, binding-engagement, and limited-bandwagoning vis-à-vis China, then such an approach will constitute a light-hedging, which views returns-maximizing activities as the core transactions in South Korea’s China policy. The approach, accordingly, treats risk-contingency measures (indirect-balancing and dominance-denial) as “insurance” (but not principal) transactions, which serve to cultivate a fallback position but without a strong intention to actually employ them. Either South Korea will opt for heavy- or light-hedging depends on the ruling elites’ perceptions of the urgency of responding to threat and the suitability of enlisting allied support, both of which are filtered through domestic politics.

Empirically, it appears that some measures of Options 1 and 2 have been implemented in conjunction with elements of Options 3 and 4, which form the main thrusts of Seoul’s China policy. By and large, these two diplomacy-based options both serve the functions of economic-pragmatism, binding-engagement, and even limited-bandwagoning towards the giant neighbor. According to Y.J. Choi, Option 3—executing a multi-dimensional strategy to reclaim Seoul’s diplomatic autonomy vis-à-vis the key players—necessitates that South Korea takes “a proactive stance” to balance the ROK-US alliance and the ROK-China cooperation, alongside stabilizing ROK-Japan relations and exploring eventual reunification with North Korea. Developing a cordial partnership with China is an integral part to these ends. This, in turn, requires Seoul to continuously adopt pragmatic policies to maximize trade and investment benefits (e.g. signing the bilateral FTA), to engage and institutionalize cooperative relations (e.g. upgrading the bilateral strategic dialogue, forging a common stance against Abe’s historical revisionism), as well as selectively accommodating Beijing’s preference and interests (e.g. dispatching officials to attend the China-centered CICA and Xiangshan Forum, and by emphasizing that the promotion of US-Korea-Japan trilateral cooperation is not targeted at China). Option 3, hence, is a recipe for light-hedging. It prioritizes returns-maximizing measures (over risk-contingency) as the principal transactions of Korea’s China policy. Its tendency to prioritize and maximize benefits, however, should not be construed as a pure-bandwagoning act. This is because Seoul’s collaboration and deference behavior towards Beijing has been performed on a pragmatic, selective, and limited basis (as opposed to an across-the-board manner). An active, multi-directional foreign policy with minimum restraint on diplomatic initiatives is essential for Seoul. Option 3, in short, involves a proactive effort to strengthen Seoul’s partnership with China, but also an insistence on not fully bandwagoning with the giant neighbor. One limitation is that the option alone does not provide a credible security guarantee in the face of looming military threats.

Option 4 (working with China to resume the Six-Party Talks), in contrast puts Seoul on the verge of bandwagoning with Beijing since it defies the US strategy for managing North Korea and opens the door to Beijing steering a new course on balancing pursuit of denuclearization with insistence on a new regional framework. Beijing-based scholar Cheng Xiaohe observes that, largely as a result of the cooled political relations between Xi Jinping’s China and Kim Jong-un’s DPRK over the past three years, there emerged an opportunity for South Korea to pull China “to its own side in the inter-Korean rivalry” in pushing for the resumption of the Six-Party Talks. Cheng opines that the benefits for Seoul are three-fold: to persuade the DPRK to abandon its nuclear weapons, “to reduce if not totally eliminate China’s support to North Korea,” and to consolidate political ties and a strategic cooperative partnership with Beijing. This option will require efforts of binding-engagement (initiating and setting up a regularized consultation dialogue with China over the DPRK issue); and it may also involve some degree of bandwagoning, if and when South Korea’s collaboration with and deference towards Beijing evolves to the extent that it erodes Seoul’s autonomy and alliance relations with Washington.

Option 5 (rethinking middle power diplomacy) is at odds with Option 3 because it calls for a shift away from self-confident, activist diplomacy toward a more modest understanding of what Seoul can accomplish in the new regional environment. As noted by Gilbert Rozman, “Fraternal ties do not help. Middle power status does not impress, when great powers all claim a stake in peninsular changes.” He asserts that the emerging realities in Northeast Asia “now make it urgent for Seoul to turn toward Washington and Tokyo.” This option is fully opposed to Option 4, since it warns that the “honeymoon” with China leaves South Korea vulnerable to slipping into bandwagoning without realizing it rather than focusing on the real range of risks and opportunities that face it. Option 5 can be seen as broadly consistent with both Option 1 and Option 2. Recognizing the limits of an independent diplomacy in conditions of increasing bipolarity and risk of war or a prolonged arms race, Seoul would not only strengthen its own deterrence capacity and its alliance with the United States, it would keep national identity differences with Japan in context and accept a growing role for trilateralism. This is a call for heavy hedging (for it prioritizes risk-contingency over returns-maximizing), even if changing circumstances might keep light hedging in the mix.

Conclusion

The situation in Northeast Asia is sufficiently in flux. The growing US-China rivalry amid deepening regional interdependence has raised questions about the future relations between the established hegemon and the resurgent power. In large part because of the prevailing uncertainty in great power relations, South Korea—like most other regional states—has attempted to avoid any straightforward or single-directional policy. Instead, Seoul has opted to hedge by not taking sides and by adopting a bundle of deliberately ambiguous measures aimed at keeping its options open. It has pursued a multitude of policy options to maximize benefits while simultaneously seeking to mitigate a variety of risks vis-à-vis the competing powers. Because each of these options entails its own sets of strengths and shortcomings, there is a need to combine options that are mutually counteracting, so that they could offset the drawbacks, limitations, and risks of one another.

The authors of the five options differ in their assessment of the risks, especially on China and China’s relations with North Korea and Russia. They differ in the weight given to security versus economic risks. Hong, Roehrig, and Rozman rate the risks in security or from overestimating the middle power diplomacy of Seoul as high. Cheng also does not place very much hope in Seoul’s diplomacy, but he draws the opposite conclusion in favor of more bandwagoning with China and less balancing with the United States. From both directions, the options these four authors propose are not consistent with the light hedging at times veering toward heavy hedging visible in recent South Korean policies. By contrast, Ambassador Choi, who has represented the diplomatic community with distinction, would double down on the existing way Seoul is striving to conduct its foreign policy. With this range of options, the authors put before readers the choices that policymakers may debate at today’s crossroads.