October 28, U.S. President Trump arrives in Seoul, only one day left.。However, South Korean President Lee Zee-ming was sitting in the Blue House with a frown. This list brought by the United States has long been described by the South Korean media as an "ultimatum". He has to sign it even if he does not sign it. The upcoming talks were called the "final trial" by Yonhap.
A $35 billion massive investment requirement, the transfer of land ownership of U.S. military bases in South Korea, and the comprehensive pressure of customs policy, one clause has been heavily pressed on the South Korean government’s shoulders. Does Li Ziming really have no choice but to sign with tears?Will this seemingly bilateral forced palace cause greater storms around China?
Looking back at the starting point of the whole thing, there are actually traces to follow. As early as July, the United States and South Korea initially reached an agreement of intention on investment in the United States, with the amount set at 350 billion US dollars.
At that time, the South Korean government thought that this was just a symbolic number and might be "slowly talked about" through phased payments. However, it did not expect that the United States suddenly turned against it in October and demanded that this investment must be fully implemented during Trump's term., and it had to be paid in cash.
For South Korea, this is no different than a heavy hammer. South Korea's Deputy Economic Prime Minister Goo Yun-chul has long publicly stated that the country can only squeeze out an overseas investment quota of US$15 to US$20 billion a year at most.Now, to take out 350 billion yuan in just a few years is tantamount to pulling bones from the state treasury.
To make matters worse, the current exchange rate of the Korean won continues to fall, and it has fallen to a 16-year low of 1,440 won per dollar. At the beginning of the negotiations, this US $350 billion was equivalent to about 487 trillion won. With the change of exchange rate, it has now soared to 504 trillion won. This means that South Korea has to pay nearly 20 trillion won more "wasted money" for the exchange rate difference alone.
South Korea’s total foreign exchange reserves are only $42 billion, and once it really invests the full amount, the entire country’s financial security will be shaken. This way of investing could repeat South Korea’s 1997 financial crisis.。
However, the economic pressure is not the deadliest yet.The real anger of the people is the land issue.This time Trump proposed that the U.S. not only should continue its military presence, but also hope that South Korea would transfer "land ownership" of major military bases such as the Hampshire Base directly to the U.S. government.
You know, these bases were originally provided by South Korea to the U.S. military for free. Now they are not only "permanently used", but also changed to the U.S. name, which is equivalent to handing over sovereignty. In South Korea, the public opinion was shaken, people walked out on the streets and shouted, "What is the difference between this and colonial rule?"。
The background of this land is not simple either. Humphries Base is the largest overseas military base of the US military in Asia. It is located in Pyeongtaek City, Gyeonggi Province and is the strategic hub of the entire Northeast Asia region. Once the land belongs to the United States, the United States will freely expand its anti-missile system and deploy offensive weapons without South Korea's consent, and South Korea will completely lose control over military deployments on its territory.
The deployment of the THAAD system has long proved that the U.S. military expansion in South Korea directly threatens the security of the northeastern region of China.The surveillance radius of the THAAD can penetrate China’s core, and this time if the U.S. takes ownership of the base, the future deployment of more sensitive military equipment will become unhindered.
This also explains why China decided to take action on October 14. On the same day, China's Ministry of Commerce announced sanctions on South Korea's shipbuilding company Hangzhou Ocean's five subsidiaries in the United States, prohibiting them from doing any transactions with Chinese companies.The reason for the sanctions is that these companies are cooperating with the United States to suppress China's shipbuilding industry and suggest imposing additional port fees on China ships.
According to the sanctions news, the Huanuan Ocean stock price fell by 5.8 percent, and the market value instantly evaporated by two trillion Huan. At the same time, modern heavy labor was also affected, and the stock price fell by 4.1 percent. While the South Korean presidential office tried to calm the market, claiming “limited impact”, the industry had long known that this was only the first signal of China’s release.
This seemingly game between South Korea and the United States has already affected the geographical balance of the whole Northeast Asia. By forcing South Korea to give up land and pay, the United States is actually strengthening its strategic containment of China. Taking the base in your own hands is equivalent to building a permanent military fortress at the doorstep of China; forcing South Korea to shift manufacturing investment to the United States is weakening industrial cooperation between China and South Korea。
South Korea's semiconductor industry relies on the Chinese market for 42% of its exports, and Samsung's chip factory in Xi'an is responsible for 28% of the world's high-end mobile phone chip production capacity. Once the investment focus is tilted to the United States, the supply chain between China and South Korea will be torn apart. China's mobile phones, home appliances, automobiles and other manufacturing industries may all be affected by chain impacts.
Furthermore, the United States also demands that South Korea buy $100 billion in liquefied natural gas annually, and demands to take away 90% of the dividend in terms of investment returns, which South Korea can essentially only share.
Faced with this situation, the South Korean government tried to adopt a "delaying tactic" to deal with it. It is proposed to invest US$25 billion each year first for 8 years, totaling US$200 billion, and the remaining US$150 billion will be made up in the form of loan guarantees.But the Trump team is not satisfied with this, and still insists on "cash priority", and wants to control the direction of investment and the distribution of income, giving South Korea no room to spin.
Domestic pressure is also rising.Many congressmen in South Korea have publicly questioned why the president has circumvented the legislative process and tried to sign this major agreement without consideration. SME owners have also raised slogans in the streets to protest that once tariffs rise to 25%, the manufacturing industry, which is already profitless, will fall into a massive collapse.
In July, South Korea's steel exports to the United States had dropped by 26 percent, and if semiconductors were also included in the high tariff list, the entire export lifeline would be damaged. Even so, the U.S. Department of Commerce still said that "South Korea will not be treated worse than other countries", but under the Trump administration's repeated unusual style, this promise was hardly believed.
What is even more ironic is that Li Ming, who referred to the U.S. military as an “occupying army” in his presidential campaign, now signs an agreement to hand over the sovereignty of the land with his own hands, and the Korean media describes him as “putting his own ears.”In the face of the steady pace of the United States, Lee's support rate continues to decline at home.
Seeing that the deadline for negotiations is approaching, news has emerged from inside the Cheongwadae that Li Zai-ming is likely to sign the contract tearfully when Trump arrives on October 29. Some officials privately disclosed that the agreement was not for negotiation, but for "acceptance."
From the whole process, the US strategy is not complicated: Use security kidnapping, economic squeezing, and geopolitical containment to force South Korea to move closer to the United States in an all-round wayAnd China, it is at this point that it has become the real opponent of "outside the target".
This palace-style negotiation may only be a small piece of Chinese-American game in Northeast Asia, but it has brought about more than a restructuring of relations between the two countries, but also a collective impact on regional security, stability in the industrial chain and national sovereignty.
Less than two days later, will Li in Ming really press that “pound-weight” signature pen? will the United States be willing to pay for South Korea’s inclusion in the “anti-Chinese war vehicle”?
The Korean-U.S. negotiations, known as the “final trial”, not only plunged South Korea into a double situation of economic and sovereignty, but also made China alert to the new U.S. layout in Northeast Asia.
Source of information:
[1] Lee Jae-myung: South Korea-US trade agreement negotiations are deadlocked Guangming.com
[2] Trump is approaching, "This time, South Korea may have to reach an agreement in tears" Observer.com