South Korea Moves to Improve Relations With Mainland China

IF an Oscar were awarded for diplomatic acting, South Korea might walk away with it. In a feat of purposeful make-believe, South Korea is appearing to have already renewed diplomatic ties with China, the last close ally of North Korea, even though reality is otherwise.

One by one since 1987, South Korea has won Communist countries' recognition, in a bid to outmaneuver North Korea. China is the last and biggest trophy.

And this year is a final test. Victory might help South Korea's strategy to ease the tense stalemate on the Korean Peninsula, the hottest cold-war remnant.

In January, China allowed South Korea to open a trade office in Beijing. South Korea sent a high-level diplomat, Roh Jae Won, who speaks as much about diplomacy as business. He issues visas and enjoys diplomatic immunity.

The trade-office opening prompted South Korean President Roh Tae Woo to predict that formal relations would be established by the end of the year. His critics accused him of "over-eagerness."

About 20 South Korean businessmen began a tour of China on May 8 to find a site for an industrial park just for Korean companies. They go even though their investments would not be guaranteed.

At the end of the month, South Korea will play host to a huge trade fair for about 100 Chinese companies that will display products from noodles to computers. In June, a second ferry will ply the waters between China and South Korea.

Since South Korea sent 5,000 athletes and visitors to Beijing last year for the Asian Games (along with lots of money and communications technology), Korean restaurants have opened in the Chinese capital and Korean vehicles sent for the games are now common on Chinese streets. South Korean companies advertise their names and wares on the Chinese highway as if no political estrangement existed between the two nations.

"This is all to give the impression that China already accepts South Korea," says Lee Hong Pyo, China specialist at the International Private Economic Council of Korea.

"No matter where you go in Beijing, you can find the essence of South Korea."

Seoul officials say that a little diplomatic pretense can influence a debate in Beijing over how much to recognize South Korea at the expense of North Korea. Many Chinese trade officials and others have already been won over, they add.

"China is on the fence," says Kim Kyung Won, a former South Korean ambassador to Washington and the United Nations.

The prime targets are the hard-liners and old-timers in China's communist hierarchy who cling with loyalty to their longtime fellow revolutionary, Kim Il Sung of North Korea.

Personal ties between Mr. Kim and Chinese leader Deng Xiao Ping go back to the 1930s, and the bond may be hard for South Korea to break.

"Many in the Chinese government think that North Korea is still more important to China than South Korea," Dr. Lee says. With the collapse of communism in Eastern Europe and changes in Moscow, China may be holding fast to its faithful ideological allies.

South Korea's immediate goal, however, is not so much diplomatic recognition. It wants China not to veto the south's bid to join the United Nations.

Sometime this fall, South Korea hopes formally to apply for a UN seat, despite strong opposition from North Korea, which seeks instead a joint Korea seat.

China, if it decides to lean closer to South Korea, could either abstain in the Security Council vote on South Korea's application, or just conveniently be absent on the day of the vote.

The Soviet Union, which opened an embassy in Seoul last September, has indicated it supports the application. In return for establishing ties, South Korea gave Moscow a $3 billion loan.

"If we get into the UN, then all the major powers share our view on solving the Korean issue," said a South Korean official. "UN membership for us will turn the screws on the north."

No wonder, then, that North Korea and China have had many high-level talks in recent months.

China has not let a diplomatic coolness with South Korea hinder its business ties too much. Trade boomed in the late 1980s to reach $3.5 billion last year, more than double the trade between South Korea and the Soviet Union. South Korea is the seventh-largest trading partner of China, while China is South Korea's fourth-largest trading partner.

But South Korean companies face an unfavorable tariff of 5 to 30 percent on their exports to China. This trade discrimination also applies to Israel and South Africa. As part of its campaign to woo China, South Korea is using this trade issue to seek a semi-official treaty giving it preferential trade status that would end the tariff.

Many South Korean companies, hit by rapidly rising wages, are eager to invest in China's low-wage economy.

"We are desperately looking for translocation sites," Lee says. "Korean wages are really, really high, about six to 10 times higher than in China. That's why we're so crazy about going to China."

But, he says, China wants to see more business and diplomatic exchanges between North and South Korea as a condition to expanding trade.