Unbalanced act

20 September 2017 By William Pesek

Seoul’s balancing act between China and America looks untenable. North Korean missiles are flying, yet Beijing is spanking South Korea over a U.S. missile-defence system. Trump, unsympathetic, wants trade concessions. Perhaps it’s time for a regional counterbalance to China.

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Hyundai’s China sales fell 41 percent between January and July amid fraying relations with joint-venture partner BAIC Motor Corp., the biggest crisis since the Seoul-based auto giant entered the Chinese market in 2002.

The U.S. notified Seoul in July that it would renegotiate a 2012 Korea U.S. Free Trade Agreement, one President Trump called a “horrible deal” that “destroyed” his economy. U.S. Trade Representative Robert Lighthizer said that “since KORUS went into effect, our trade deficit in goods with Korea has doubled from $13.2 billion to $27.6 billion, while U.S. goods exports have actually gone down.”

In May, U.S. officials confirmed that Lockheed Martin’s Terminal High Altitude Area Defense, or THAAD, system had become operational in South Korea. State-run China Daily reported Beijing is “gravely concerned” that the “deployment will severely damage China's security interests and undermine the regional strategic balance”.

William Pesek is a Tokyo-based journalist, former columnist for Barron’s and Bloomberg and author of “Japanization: What the World Can Learn from Japan’s Lost Decades.”

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