Bright future beckons ROK

China's peaceful rise can be attributed to its reform and opening-up, which are based on the economic development model that best suits its national conditions. China has gained confidence, reshaped national pride and mapped out a development path in the past three decades to achieve higher goals.

But China's rise has put some of its neighbors like the Republic of Korea in a strategic dilemma, the dilemma of balancing political considerations and economic cooperation. The question for the ROK is, whether to get a ride on China's fast economic development and, if so, how?

After repeated considerations and several twists and turns, the two sides established formal diplomatic relations on Aug 24, 1992, ushering in a new period of China-ROK partnership. Since then, China-ROK relations have made great achievements, with their cooperation focusing on trade and investment in the early days and spreading later into various fields, including politics, security and culture. China has become the ROK's largest trading partner, and the ROK, China's third largest.

About 40,000 ROK companies are doing business in China. By the end of 2011, their bilateral trade volume had crossed $220 billion from $6.4 billion in the early days. Personnel exchanges between the two countries last year exceeded 6.5 million. And every week 837 flights operate between seven ROK and 30 Chinese cities.

China's economic stability has played an important role in helping the ROK overcome the 1997 Asian financial crisis and the 2008 global financial crisis. Most ROK companies have an optimistic view of China's future, and strive to explore a win-win cooperative and competitive model. Big ROK manufacturing companies and their Chinese counterparts are expected to jointly tap the Chinese market. Structural adjustment in the two countries' manufacturing sector is gaining speed and their strategic cooperation in the private sector is thriving.

Previously, economic and people-to-people exchanges between the two countries focused mainly on their respective interests, so the lack of mutual understanding and shared vision of future cooperation have increased their political and diplomatic burden. It's obvious that without mutual respect and trust, the two sides' strategic partnership will face more crises.

China and the Korean Peninsula have a long history of exchanges. After World War II, the ROK implemented a development strategy inclined toward the US-led Western countries. After diplomatic relations were established, China became one of the most important neighbors of the ROK in almost all fields, from economy and politics to culture and the reunification of the Korean Peninsula.

Faced with a rising China, the ROK's reaction is complex. The rapidly changing situation on the Peninsula and across the world demands that the two neighbors make a responsible judgment. But to build mutual trust, they need a lot of time.

The 20 years of economic cooperation have made the two countries increasingly interdependent on the economic front, but they need more coordinated efforts to fill the emotional blank. Mutual trust, not only economic interests, is needed to take bilateral relations to lofty heights.

China and the ROK should pay attention to not only their respective interests, but also a comprehensive partnership in the future, for regional development promoted by bilateral cooperation can enhance both countries' status on the global stage.

Occasional conflicts between peoples of the two countries are another matter of concern. But sensitive issues in bilateral relations can be resolved through talks, and the two countries can take advantage of "Confucian culture" to carry out in-depth dialogue.

Continuing to create interests through further economic cooperation will form the basis of promoting cooperation in political, social and other fields. So the two sides should read the trend of the world economy, jointly invest in the energy industry, strengthen cooperation in renewable and green industry, and jointly develop global standards.

The two countries' manufacturing industries can compete with as well as complement each other in the domestic and foreign markets, and thus create a new economic mode of cooperation to open up global markets through "joint research and innovation".

Besides, they should sign a free trade agreement as soon as possible to achieve mutual prosperity and promote regional economic integration and development. They should also make efforts to deepen their financial cooperation to help build a regional financial system that is insulated from global financial crises.

To strengthen communication and mutual trust, the two countries need to take both official and unofficial diplomatic approaches to resolve mutual issues before they blow out of proportion.

Also, the two countries should establish a platform for people-to-people exchanges and give institutional support to young people on both sides to enhance mutual understanding. The common pursuit of regional development and peace, based on the Oriental culture, will open a new chapter in the history of the region without the interference of the West.

This year will see leadership transition both in China and the ROK. In the next 10 years the two countries will explore more systematic strategic cooperation, get new opportunities and face more challenges at home and abroad.

China's transition will be smooth, preparing it for a second take-off, while the ROK needs to develop a new strategy to adapt to the new situation and consolidate the basis for the Korean Peninsula's reunification.

The two sides need to strengthen their strategic communication and cooperation. In particular, China, the ROK and Japan have to work closely to counterbalance the impact of the United States and the European Union. The Cold War logic of being "either friends or enemies" is anachronistic. China can develop a win-win strategy with its neighbors, which will also prepare the ground for the next generation of China-ROK relationship.

The author is a guest professor at the School of Finance, Renmin University of China.

(China Daily 08/23/2012 page9)