China is pursuing a regional development strategy for its northeast region with the realization that it is an area imperative to China’s future development and that it will function as a powerful engine in securing China’s regional competitiveness. For the successful development of northeast China, however, the issues related to the Korean peninsula must first be resolved. Therefore, it is important to understand how China views the Korean Peninsula, and which strategy it will employ in approaching this problem.
This study uses the ideal model method and global action patterns method to demonstrate that peaceful unification is the most ideal setting for China regarding the Korean Peninsula if China’s goal is to pursue its development strategy in the Northeast region. We conclude that China will choose a policy strategy that supports the unification of the Korean Peninsula in order to implement its own national strategy.
We consider four main scenarios related to the unification of the Korean Peninsula: status quo, military conflict between South and North Korea, North Korea’s pursuit of openness and reform, and peaceful unification. We conclude that China will strategically construct its policy underpinnings vis-à-vis the Korean Peninsula in support of a peaceful unification. Furthermore, China will eschew strategic competition with neighboring powers such as the US or Japan, and instead embrace cooperative co-existence in Northeast Asia. This would also mean that Northeast Asia will soon emerge on the global center stage as a peaceful and cooperative region.
Unification of the Korea Peninsula and economic benefits for China can be considered in three aspects: unification and economic benefits for China’s northeast region resulting from North Korea’s reform and opening up, the ripple effects of inter-Korean economic integration on China’s Eurasian strategy, and the application of the One Belt and One Road Strategy. If a Northeast Asian triangular trade network becomes a reality, China’s northeast region would be the greatest beneficiary in connection with unification of the Korean Peninsula. In particular, economic effects engendered from increased openness of the three provinces of northeast China due to Korean unification will be considerable. Increased openness of the three northeast Chinese provinces by itself is expected to generate economic benefits of about 283.6 billion RMB.
Additionally, when considering the inter-Korean economic integration using the CGE (Computable General Equilibrium) model, while it is true that trade diversion caused by inter-Korean economic integration may impact China negatively in the short term, North Korean economic growth will accelerate and increase import demand, which may increase China’s exports to North Korea and create a positive ripple effect.
Regarding the Eurasian Strategy and the application of the One Belt and One Road Strategy, if President Park’s Eurasia Initiative Strategy is implemented, China’s Northeastern region would experience increased openness and more areas would become open to development, henceforth strengthening its regional competitiveness. This would mean that the Northeast region could become a new engine of growth for the Chinese economy.
Since the beginning of the modern era, all international environmental factors that crucially impacted China’s national interests have stemmed from the Korean Peninsula. Thus, Korean unification and China’s security interests are closely connected.
In China’s perspective, Korean peninsula also represents an extremely important issue to the US and Japan in implementing their respective strategies. As a result, surrounding powers such as the US, China, Russia, and Japan is paying close attention to the constantly changes and standoff politics of inter-Korean relations; naturally, there would be strategic competition among the surrounding major powers who intend to prevent negative outcomes that could hurt them.
Reconciliation of the two Koreas or unification of the Korean Peninsula will induce the surrounding countries to acknowledge that they could lose out on potential economic benefits if they do not actively participate in Northeast Asian regional cooperation. If so, the mood in Northeast Asia will be extremely cooperative, which would provide favorable international conditions for Chinese regional strategy vis-à-vis East Asia.
Sino-Korean strategic cooperation is absolutely necessary in the process of unifying the Korean Peninsula. In the long-term view, South Korea needs to pursue a neutral policy towards the US and China. In the current situation, China also maintains a favorable attitude regarding the ongoing active role of the US forces stationed in Korea. However, the role of the US-Korea alliance must be limited within the Korean Peninsula. Moreover, while North Korea is undergoing top-down reform, a desirable policy for South Korea and China should be to encourage change in North Korean society and help North Korea to open up and initiate reform.s
Especially, if one wishes to see substantial changes in North Korea, one must actively conduct economic exchange with North Korea. Furthermore, regarding economic exchange with North Korea, South Korea and China should be attentive towards the creation of special zones in North Korea.
Finally, in order to realistically resolve the North Korean nuclear problem, the issue at hand must be divided into several steps. Internal politics within North Korea must first be stabilized by achieving economic exchange within set boundaries and at the same time, we must induce North Korea’s integration into the international society. Unified Korean Peninsula will play the role of a hub, located at the crossing point of interests of great territorial and maritime powers. Of course, the benefit will be shared by neighboring countries, as well as China and the Korean Peninsula. In this way, a peaceful unification of the Korean Peninsula will be a bonanza not only to the Korean Peninsula and China, but also to all neighboring countries.