For millennia, China has used the Korean Peninsula as a defensive barrier on its eastern flank. At the same time, the Koreas have been a constant source of security concern for its northern neighbor. Over the weekend, China's reactions to developments on either end of the peninsula reflected its complicated relationship with the two Koreas. On Sunday, in response to the latest demonstration from North Korea of its nuclear weapons program development, Beijing imposed a ban on imports of the country's coal through the remainder of 2017. The stinging rebuke to Pyongyang, if fully implemented, will cut the cash-strapped country's export revenue by a third. Hours later, China issued a direct warning to the South Korean conglomerate Lotte, which is nearing completion of a deal with Seoul that is key to the deployment of the U.S. Terminal High-Altitude Area Defense (THAAD) anti-ballistic missile system.
That Beijing applied pressure against its Korean neighbors is neither surprising nor unprecedented. As the dominant regional power and top economic partner of each country — China is responsible for 90 percent of North Korea's total trade and about a quarter of South Korea's exports — Beijing has many options to try to bend the actions of both countries. Lately China has begun turning toward more assertive means to influence their actions, but even those means have limits.
The warning to Lotte, which threatened its business dealings in China, came after months of indirect economic retaliation and strained relations over a deal whereby Lotte would lease its golf course at Seongju to serve as a base for the THAAD missile shield, which Beijing fiercely opposes. And the heavy economic stick it is wielding against the North follows years of half-hearted measures employed by Beijing to rein in the North Korean nuclear program. In the past, China has imposed several ineffective and short-lived oil export embargoes against North Korea. In 2016, it twice pledged to fulfill U.N. resolutions to ban imports of coal and other commodities from the country. But under the guise of "livelihood purposes," China's imports of North Korean coal last year reached their highest levels in three years.
Still, Beijing has tried to keep its diplomatic lines with both countries open. At one point, even though it was clear that diplomatic avenues alone would no longer restrain North Korea's nuclear ambitions, Chinese Foreign Minister Wang Yi continued to suggest that six-party talks aimed at sidelining Pyongyang's nuclear weapons program were still viable. Similarly, its highly selective retaliation against South Korea left intact multiple political and economic communications channels between the two. But the North is growing more defiant, provocative and unpredictable, and the South has increasingly turned to a U.S.-led security alliance. Beijing's apparent willingness to take steps that narrow its options with both countries demonstrates its increasing realization that its imperatives on the Korean Peninsula are being compromised.
For China, the challenge of managing its relationships with the occupants of the Korean Peninsula stretches back nearly 2,000 years.
Successive Chinese rulers have seen Korea as both strategic bulwark to be preserved and a dangerous land bridge that could convey "outer barbarians" into China proper. The Korean Peninsula served as the route for the failed Japanese invasion of China at the end of the 16th century. At the end of the 19th century, it was the approach for Japan's return to the Asian mainland — before the peninsula again emerged as a Cold War hot spot shortly after the establishment of the People's Republic of China.
Time and again, China's attempts to penetrate Korea's formidable terrain to establish direct control came at a high cost or failed thanks to the strong Korean identity and its military proclivities. It followed that the Chinese Middle Kingdom for the most part relied on a tributary relationship with the peninsula, exercising minimum military control while maintaining an ability to interfere — and at times dominate — Korean politics as it sought to maintain at least neutrality from the Koreans. But that drive often brought it into conflict with other regional powers — especially Japan, and later Russia and the European governments — that began seeking a presence on the peninsula. Until its annexation and occupation by Japan, which ended with World War II, Korea was able to use the interests of other powers to balance its relationship with China.
Since the end of Korean War in 1953, China and the Korean Peninsula have largely picked up where they left off. North Korea, split from its thriving and diplomatically dynamic southern half, has resumed its quest for survival against perceived threats such as the United States. Pyongyang has adopted a provocative approach, combining isolationism with a military buildup and the threat of nuclear deterrence to hold the world's great powers at bay. South Korea, on the other hand, has embraced the U.S.-led security alliance while intricately juggling its relationships with its two large neighbors, China and rival Japan. China has continued to consider the Korean Peninsula as its most strategic safeguard, and shaped its policies to attempt to maintain a neutral and relatively stable atmosphere there. But with South Korea a staunch U.S. ally, the North has taken on an even greater importance to China in its efforts to keep foreign foes off its doorstep.
In this vein, it has adopted a fairly ambivalent attitude toward the North Korean nuclear program. China believes that the government in Pyongyang considers the use of nuclear weapons a last resort to defend the country, or its leaders, from outside threat. To tolerate the North's nuclear program is a better option in Beijing's eyes than to allow its government to fall, creating a power vacuum on its border open to exploitation by other countries. China, which also believes that its interests are better served by a divided Korean Peninsula, supports the efforts of North Korean leaders to preserve their power — pushing off the chances of reunification.
Beijing knows that Seoul's political and economic strength — and its strong alliance with the United States — would allow it to dominate the foreign policy of a reunited peninsula. But Beijing also sees South Korea as the weak link in the U.S.-led security alliance in Northeast Asia because of its longstanding enmity with Japan. This explains Beijing's active cultivation of economic and political connections in South Korea and its moves to undermine Korea-Japan relations. To balance the two Koreas, Beijing hopes to keep their bilateral relations tense enough to prevent reunification, but short of fomenting a war.
China's pursuit of its Korea strategy has created its share of headaches for Beijing. After North Korea refused to trade its nuclear program for normalized global relations and withdrew from negotiations over it, Beijing became the target of growing international pressure urging it to exercise its influence and rein in the North. The new U.S. presidential administration, which sees North Korea as a "key security challenge," has ratcheted up the pressure as it revisits its Korea policy. The looming threat of a nuclear North Korea has likewise spurred the United States and its allies to assume a more aggressive military posture in the region. This led to South Korea's agreement to deploy the THAAD system and moves by South Korea and Japan toward a more pre-emptive and proactive military posture. Each of these developments has made China's long-term security environment in the peninsula more precarious, adding to the existing challenges it faces in trying to rein in both neighbors.