‘The economy is security’ and vice versa

OPINION:

This year marks the 70th anniversary of the Korean War armistice and the security alliance between the United States and South Korea.

This week, South Korean President Yoon Suk-yeol will make his first state visit to Washington, where he will address a joint session of the U.S. Congress. After Seoul’s commendable rapprochement with Japan, Yoon’s visit to Washington will be another highly consequential diplomatic act for the South Korean leader.

The U.S. Congressional invitation to President Yoon states that this is a critical time to reaffirm the two countries’ “shared commitment to democracy, economic prosperity, and global peace.” Russia’s ongoing war of aggression against Ukraine has brought China, Russia, and North Korea closer together. China has become more dominant and aggressive on the world stage than at any time in recent history. Better geopolitical coordination between East Asian democracies is needed, as well as stronger military and economic ties with non-Asian democracies, especially the United States.

The world is increasingly locked in a new Cold War, largely due to the rise of totalitarian China and its challenge to the rules-based liberal world order and democracy itself. Lest we forget, the first major military conflict of the Cold War, the Korean War (1950–1953), did not end with the dissolution of the Soviet Union. In fact, a peace treaty has never been signed between the two Koreas. With China’s complicity, communism has yet to be defeated in the Korean Peninsula, let alone elsewhere in Asia. Therefore, it is unsurprising that the world is now falling into another Cold War.

Another fact we must remember is that the last (and so far only) direct military clash between the U.S. and China in history was during the Korean War. In a sense, the Korean Peninsula is where the seeds of the Cold War were buried—and where the new Cold War has found an opportune place to germinate.

The new Cold War is proving much more difficult to fight because of the unprecedented economic interdependence among nations, regardless of ideological differences. Over the past three decades, China has achieved rapid economic growth under the regime’s one-party system, becoming the world’s second-largest economy and rapidly closing the gap with the United States in the technology and defense sectors. China has greatly expanded its influence on the global stage, offering the world’s authoritarian states a counterexample to the notion that the only path to modernity is liberal democracy. The biggest problem for the democratic world is the overdependence of individual countries’ economies on China. South Korea, for example, relies on China as its largest trading partner, accounting for 26 percent of its exports in 2022.

Over the past two decades, many countries have faced the dilemma of “security dependence on the United States” and “economic dependence on China.” Most East Asian countries have struggled to maneuver between these two superpowers. This is true of ASEAN member states, as well as Tokyo and Seoul, which have historically had close military alliances with Washington. But as China has become more adept at using its economic power to coerce democracies to bend to its will, especially on values-related issues, East Asian countries like South Korea have found it increasingly difficult to maintain a balance.

The fact that U.S. President Joe Biden chose South Korea as the first stop on his first trip to Asia after taking office is significant. Not only have Washington and Seoul sought to transform their military relationship into a “comprehensive global strategic alliance,” but both have also felt the need to elevate their economic relationship to a “technology alliance,” with the goal of fostering technology and supply chain collaboration based on shared values. During a visit to the White House last May, President Yoon described the U.S.–South Korean partnership as an “economic security” alliance, emphasizing that “the economy is security, and security is the economy.”

President Yoon is right. Case in point: In late 2016, Seoul decided to deploy the U.S. Missile Defense Agency’s Terminal High Altitude Area Defense (THAAD) system in response to North Korean missile threats on land owned by Lotte Corporation in South Korea’s Seongju County. A few months later, China reacted angrily and boycotted Lotte after the company’s board of directors agreed to a land-swap deal with the South Korean government that allowed officials to deploy the missile defense system in Seongju.

In recent years, China has retaliated economically against the Czech Republic and Lithuania over Taiwan, against Taiwan over its growing autonomy, and against Australia for calling for an investigation into the origins of the COVID-19 pandemic. This is by no means an exhaustive list. And China has threatened economic sanctions against virtually all democracies—including democratic powers like the United States and Germany—for calling out China’s human rights abuses.

Russia’s invasion of Ukraine, which began in February 2022, demonstrates the validity of South Korean President Yoon’s belief that “the economy is security, and security is the economy.” It is abundantly clear that several economic factors—primarily Europe’s overdependence on Russian oil, gas, and grain; the economic vulnerability of the entire democratic world in the face of close and unprincipled trade relations with China; and the growing friendship between America’s two greatest military and strategic adversaries—coalesced to embolden Russian President Vladimir Putin to invade Ukraine with alarming audacity.

After Putin invaded and annexed Ukraine’s Crimea region in early 2014, Washington rallied a group of key allies in the G7 and beyond to impose coordinated sanctions on Russia. The fact that this U.S.-led collective economic contingency plan failed to deter Putin’s invasion of Ukraine last year demonstrates the inadequacy of building security into the economy and underscores that much more needs to be done.

China and North Korea pose a credible and growing threat to East Asian countries. Therefore, South Korea, Japan, Taiwan, and the United States must act now to form an initial prototype of an “economic NATO” based on democratic values. The purpose of the alliance is not to decouple economically from China, which is neither possible nor in the best interest of these countries. Rather, the alliance would allow these countries to maintain and even expand their economic ties with China, but with minimal vulnerability and maximum security.

The values-based economic coalition we propose would be neither a military organization like NATO, nor a U.S.-led security organization like the Quadrilateral Security Dialogue or AUKUS; nor would it be a trade organization like the WTO. Our proposed economic alliance could help promote China’s human rights progress, but it would also serve as a powerful economic bloc to respond collectively when members face economic conflict with China over human rights issues, democratic norms, or the rules-based liberal international order.

The formation of a strong economic alliance between South Korea, Japan, Taiwan, and the United States—and the eventual emergence of a full-fledged transatlantic “economic NATO”—would leave China with no doubt that it would face severe economic repercussions if it invaded Taiwan, supported North Korea’s nuclearization, or economically bullied democratic countries.

History has proven time and again that “the economy is security, and security is the economy.” Unfortunately, however, the U.S. has shown much more interest in building a pseudo-military “NATO” with South Korea, Japan, and Taiwan, than in forming a values-based “economic NATO.”

For now, the economies of South Korea, Japan, and Taiwan are each far more dependent on China than on the United States. Transformation will take time, resources, and an enduring willingness to bear the costs associated with forming and maintaining the “economic NATO” proposed herein. In the Korean War Veterans Memorial in Washington, D.C., there is the Wall of Remembrance, on which the words “FREEDOM IS NOT FREE” are etched in large capital letters. It is imperative that the world’s democracies remember this harsh reality at this critical historical juncture. Precisely because freedom does come at a price, an economic and security alliance between the U.S., South Korea, Japan, and Taiwan, if successful, would serve as an important model for the democratic world at large.

• Jianli Yang, a Tiananmen Massacre survivor and former political prisoner of China, is founder and president of Citizen Power Initiatives for China and the author of For Us, the Living: A Journey to Shine the Light on Truth. Yonghun Kim, is a senior advisor of Center for Civic Culture Studies.