Sieren's China: When two nations are at odds

At the moment, North and South Korea are causing a headache – and not only to China. It would be justified if China were to opt for tougher measures to bring them both into line – North Korea for its missile tests and South Korea for allowing the US to install the Terminal High Altitude Area Defense (THAAD) missile system on the Korean Peninsula. Instead, it's actually the US which is threatening to run riot. US President Donald Trump sees North Korea as a sly enemy that has been playing games with Washington for years. While Washington is using North Korea to push China into a corner. Trump accuses Beijing of not doing enough to rein in the regime in Pyongyang.

Gaining Beijing's trust

When US Secretary of State Rex Tillerson travelled to China for the first time last weekend, he had to try to smooth relations in the light Trump's repeated digs at China. He also had to gain Beijing's trust.

But Sino-US relations are not only tense because of Trump but also because the US is installing THAAD in South Korea. Chinese analysts are concerned about its long-range X-band radar, which could be used to monitor military movements in China. This would allow the US to know ahead of time when China planned to launch intercontinental missiles.

Therefore, China has made it clear to Seoul that it is disgruntled. The government has imposed "unofficial” sanctions on South Korea. These have affected South Korea's Lotte Group, which has opened several discount stores in China over recent years. They have been forced to close on the grounds of failing to comply with fire regulations. Moreover, some Chinese consumers are boycotting Korean supermarkets that sell products such as fish, fruit or detergent.

Summit in early April

US Secretary of State Tillerson's visit came at a tense time. The most important result was the setting of a meeting at the highest level. The US President will meet his Chinese counterpart in the US at the beginning of April. Rex Tillerson will miss a NATO summit that will take place at the same time to meet with the Chinese officials since this is about nothing less than the US position in Asia, the world's new center of power. The US wants to continue stationing its troops in South Korea. However, this can only be justified if Pyongyang continues to be so volatile.

Beijing and Seoul are joined by the fact that both would prefer North Korea to open up peacefully. The US is not interested in such a scenario. While China and the US are at odds, Kim Jong-un can look on with glee and without any qualms test a rocket engine just on the day that the US Secretary of State visits Beijing, calling even more attention to itself.

Economic losses

The loser in this geopolitical game is the South Korean economy. The Lotte Group has lost $66 million in this month alone because of the closing of its Chinese stores. This is a tough blow to the South Korean economy which is also suffering from corruption scandals and the president's ousting from power. Elections are due in early May but the situation is a real mess: Beijing does not want any tough sanctions to be imposed on North Korea because a collapse of the regime would lead to chaos on the border with China and would bring US troops even closer. The situation could relax in early May if the China-friendly opposition leader Moon Jae-in wins and becomes South Korea's next president.

Frank Sieren has lived in Beijing for over 20 years.