Is Korea really younger, smarter brother of China?
Published : Nov 27, 2011 - 21:24
Updated : Nov 27, 2011 - 21:24
Korea the younger, smarter brother of China? The clich cumulates too many “no-nos” to be sustainable. First, nations are not anthropomorphic entities you can compare on moral grounds. Second, Northeast Asian relations can be as touchy as minefields, and the epicenter of Confucianism is not the ideal playground for audacious familial metaphors. Ask a Chinese nationalist, and he’d rather consider South Korea and its actual sibling, North Korea, as mere provinces bound to get back to their Motherland. And why not throw in Japan, Russia, or the U.S. for a fuller familial picture?

I must confess that, when I first came to Korea in 1991, I toyed with another familial clich: Korea as a strange Oedipus, condemned to kill his economic father Japan, and to marry his mother China. Not your usual mom: a Woody Allen-style, Jewish-mother stereotype, always lassoing her offspring with anything that could pass for an umbilical cord, making sure she remains the only woman who counts in her boy’s life (“When you grow up, you’ll understand: that American girl is no good for you.”).

This image came up because of the conflicting feelings of Korean businessmen toward Japan: Korea owed its successes to its own amazing dynamics, but even as the Lost Decade unfolded, benchmarking Japan remained an obsession, and foreign businesses had to prove their credentials there before finding a Korean partner.

“Mother China” is as wrong and caricatural a metaphor as “Japan the economic father,” but a timeless classic. In 1991, following Deng Xiaoping’s economic reforms, the 800-pound gorilla was starting to stretch its muscles after eons of hibernation. Not fit yet, but clearly gaining momentum, and certainly tempted to grow ambitions soon.

South Korea had already surpassed North Korea as China’s main commercial partner on the peninsula following the 1988 Olympics, but for most Korean businessmen, the Middle Empire remained well below the radar ― and for most Koreans, definitely more a political foe than a potential commercial friend.

This changed in 1992 when Korea established diplomatic relations with China, a normalization that facilitated the first boom in bilateral trade ($1 billion in 1989, $5 billion in 1992, $20 billion in 1996). The second boom happened in 2001 (from $44 to 200 billion between 2002 and 2010): that year, China’s accessed the WTO, and Incheon Airport was inaugurated. Even now, when I see ICN destination boards covered with Chinese cities, I remember my first trip from Gimpo to Shanghai in 1992: since direct flights to “red” China were not allowed, I opted for a stopover in Hong Kong.

China is now Korea’s biggest trade partner and Korea China’s fourth biggest trade partner. In 20 years, while China’s share in Korean foreign trade jumped from less than 3 percent to more than 20 percent, the U.S. dived from 29 percent to 10 percent. Korea smartly balances the political influence of both hyperpowers, significantly hosting their first G2+ in Asia (a.k.a. the G20 Summit).

With its 50 million souls and record low birthrate, Korea enjoys trade surpluses with a neighbor boasting a 300 million-strong middle-class expected to double by the end of the decade. Korea is now the economic and cultural model to follow, the subject of benchmark for Chinese players, the trendsetter and a key entry point for Western majors in the region.

So could Korea really be the smarter and younger brother of China? As Zhou Enlai said about the French Revolution, “It’s too soon to tell.”

China is reassuming a position its familiar with, Korea venturing into unknown territories. The dynamics can’t be more different, the future more uncertain. Can Korea transform its Golden Moment into an original and sustainable model? Can China propose a new deal to its own people as the old one (growth versus liberties) expires? How will the North Korean adventure end?

Younger brother or not, in this transitional period, Korea needs to play extra smart. If it can’t push, like its giant neighbor, its own standards in key industries (IT, telecoms, nuclear or solar energy, bullet trains), it has to consider more sustainable standards than surgically enhanced K-pop stars. Hopefully, Korea Inc. has eventually understood the importance of reaching beyond hardware, of getting “softer” without losing the legendary drive and determination to succeed of Korean citizens.

Against such a formidable “coopetitor” as China, Koreans can leverage unique strengths (swiftness in decision making, capacity to democratize innovations, to embrace change), and convenient weaknesses (a small but compact and reactive market, a relative neutrality versus hyperpowers). But Korea can’t succeed without major reforms, starting with the empowerment of SMEs (also a must for China), and reforming an education system that destroys creativity and diversity.

In the brotherhood of nations, Korea and China will experience more moments of tension and friendship. They’ll move closer to each other in order to build more bridges (regional collaboration, FTAs, a common currency?), but also to square off when necessary.

Both China and Korea have to change now, and both have to redefine their own models as true leaders, without positioning themselves versus one particular nation. Let’s hope both can combine the best genes of each country: Sun Tzu’s strategic vision and Sejong’s wisdom.

By Stephane Mot

Stephane Mot is a French author, and an expert in strategy and innovation with a business start-up background. His friendship with Seoul started 20 years ago when he joined the French Embassy, and the city plays a recurrent role in his fiction as well as his blog (SeoulVillage.com). ― Ed.