China, S. Korea Cooperate to Ease N. Korea Nuclear Stand

THE death of his elder brother in the Korean War four decades ago is still an aching memory for Suk-young Jin.

But that hasn't stopped the Seoul businessman from joining an investment surge in this coastal Shandong port town, which is part of budding new economic and political ties between South Korea and China.

"The bad-feelings generation has almost disappeared," he said in an interview at his new Chinese factory, which makes quartz crystal components for electronics. "There are still cold war feelings between the South and the North. But, while China may stand for North Korea, China does not stand against South Korea either."

As Beijing and Seoul build an economic bridge across the Yellow Sea, the one-time adversaries also grope for new political links in Asia's shifting regional landscape.

For the first time, China and South Korea, which restored diplomatic relations last September, appear to be pursuing parallel paths in efforts to force North Korea to back down from its hard-line defiance over its nuclear program.

While the United States and other Western countries call for United Nations sanctions against Pyongyang for announcing in March that it would withdraw from the Nuclear Non-Proliferation Treaty, Beijing and Seoul want a more measured approach: South Korea because it fears provoking a military strike by the isolated North, China because it risks angering the West by vetoing UN sanctions or bringing down communist North Korea economically if it abstains and sanctions proceed.

Following a meeting between Chinese and South Korean foreign ministers last month, the US and North Korea are reportedly planning talks in Beijing this week. Although US officials refuse to confirm the meeting, a Western diplomat said Wednesday that both the US and China want "to see the same outcome" and defuse the situation.

Still, even as the US and South Korea turn to China to intervene, Beijing's influence in Pyongyang is waning, diplomats say. Pyongyang's friendship with Moscow aggravated links with China, and China's embrace of market-style economic reforms, and moves toward the West have triggered new mistrust in North Korea. Recent reports indicate there have been firing incidents between troops along the North Korean and Chinese border.

South Korea is moving into this vacuum by exploiting the economic openings in China, especially in coastal areas such as Shandong Province. No longer held down politically, official trade is expected to jump from $8.2 billion in 1991 to almost $20 billion by 1995, Korean diplomats say.

In Shandong, only 100 miles by sea from South Korea, China's new-found economic partner is making its presence felt.

Four years ago, Beijing earmarked Shandong for a special indirect trade with Seoul, channeling commerce away from the province of Liaoning to avoid angering neighboring North Korea. In 1990, direct ferry service linked the Shandong and Korean peninsulas for the first time.

That is paying off in Yantai and its neighboring city of Weihai, where Korean restaurants are popping up and hotels are full of South Korean traders and investors drawn by cheap labor and tax incentives in China. In return, bureaus are opening up to send low-wage Chinese laborers to work in South Korean plants.

The South Korean carmaker Daewoo is exploring opening a major production plant in Yantai. South Korea's Pohang Iron and Steel Co. is helping build an $8 billion, 1,500-mile-long highway from Beijing to Hong Kong, running through Shandong.

"When I first came here in 1989 there was no official trade. I was satisfied with anything I could get," says Liang Jinhua, an ethnic Korean of Chinese nationality who owns a restaurant and a trading company in Weihai. "Now I'm looking for a joint venture partner."

Still, obstacles remain between two peoples, who have traditionally eyed each other with suspicion. Koreans worry that China will become too powerful economically and once again dominate their peninsula as happened frequently in the past.

For their part, many Chinese look down on Koreans whom they call gaoli bangzi or Korean yokel, a reference to the poverty of many North Korean emigres.

"You have to understand the Chinese mind," says Chon-ho Kwon, a Korean businessman in Yantai. "When they grow too strong they can create a lot of trouble."