South Korea finds itself in an awkward position as the U.S. tries to form a united front of regional partners to counter China’s increasing economic and military power, while Seoul has shown little interest in alienating its neighbor and most important trade partner.
Seoul exported goods worth over $136 billion to China in 2019, according to a 2020 report by the Carnegie Endowment for International Peace.
Victor Cha, the Korea Chair at the Center for Strategic and International Studies in Washington, told the Financial Times in a Wednesday report that while “major liberal democracies” are forming a “complex patchwork of coalitions” Seoul is acting like the “shy girl at the prom” and is “sitting by the punch bowl.”
The paper reported that China is South Korea’s most important trade partner and Seoul has made it a point not to cross Beijing. But Seoul has recently undergone a $275 billion defense modernization program, which includes funding for a naval fleet aligned with U.S. forces. 
An October 2020 Pew global poll showed that 83 percent of South Koreans had no confidence that Chinese President Xi Jinping would do the “right thing in world affairs,” according to the Carnegie report. 
The Diplomat reported that even North Korea was viewed more positively than Beijing in Seoul while the U.S. had the most favorable rating.
“The United States is our sole ally, and we also have strategic cooperation with China. There is no reason why we must lean on one side to limit the relations with another,” Lee Jae-myung, the governor of Gyeonggi province, said. “It is wiser diplomacy to induce the U.S. and China to compete to cooperate with us.”
Van Jackson, a former Pentagon official at Victoria University of Wellington, New Zealand, told the FT that Seoul’s ambiguity is “reasonable” given the “historical context.”
While “war games” with the United States and South Korea were suspended under President Trump, in his failed effort to secure more favorable trade deals with China, they have resumed under President Biden. And, there are nearly 27,000 U.S. troops deployed on the island, which is the second-largest deployment of U.S. troops behind Japan.
TREND FORECAST: Seoul is trying to accomplish a very sensitive balancing act, and while its population does not particularly care for the Chinese leadership, money comes before war. 
President Biden and South Korean President Moon Jae-in met in Washington over the summer and issued a statement after the meeting, which did not explicitly mention China but spoke out against “all activities that undermine, destabilize, or threaten the rules-based international order.” The statement—for the first time—mentioned Taiwan.
China responded by condemning the countries for mentioning an “internal affair” and said they are “playing with fire.”
We have reported on Biden’s effort to keep Beijing at bay. (See “BIDEN RAMPS UP PRESSURE ON CHINA,” and “U.S. LAUNCHES COLD WAR 2.0: CHINA LAMBASTS ‘COLD-WAR MENTALITY.”
South Korean support would be a major coup for the Biden administration. However, we maintain our forecast that despite the latest Aukus deal which unites Australia, the United Kingdom and the United States against China—and even with the military support of Japan and South Korea—the combined militaries would not defeat China’s overtaking of Taiwan which Beijing said they want to do peacefully. 
And should war break out among these nations, it would be the beginning of WWIII. 
Thus, we maintain our forecast that the U.S. will not militarily challenge China over Taiwan, and would likely allow the island to fall to Beijing.  

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