The Buzz

China Really Hates THAAD (But So Does Russia)

The US military’s Terminal High Altitude Area Defense (THAAD) missile system is slated to be operational in Seongju, South Korea by the end of 2017. THAAD has been met with vocal opposition among South Korean citizens as well as diplomatic protestations from China and Russia. China has been more strident than Russia about the potential dangers of THAAD, while Russia has been outspoken on the need for closer cooperation with China in response to the defense system.

Nevertheless, Russia has recently been more vocal in its opposition. The Russian defense ministry stated in 2016 that THAAD will factor into Russia’s strategic planning for the Asia-Pacific region. More recently the Russia ambassador to Seoul hinted during a press conference with members of the South Korean media that if THAAD is indeed installed in South Korea then Russia will respond with its own countermeasures.

Much analysis of THAAD and its implications for regional security have focused on the dynamics of relations between powers China, Russia and the United States, and to a lesser extent on the relationship between China and South Korea. In the latter case, trade between China and South Korea has suffered due to what some South Koreans perceive to be Chinese retaliation against South Korean businesses.

South Korea is one of China’s largest trading partners, although China is sufficiently strong and diverse in its economic relationships that it apparently considers limited economic retaliation in response to THAAD to be a reasonable undertaking. Contrastingly, Russia’s economy remains heavily focused on Europe.

While the percentage values of China and Russia’s respective export volumes to South Korea are equal at 3.8 per cent, the actual dollar amount of Chinese and Russian exports to South Korea are vastly different — US$89 billion and US$17 billion respectively. But Russia is still limited in how it can respond to THAAD without incurring its own risks in the economic realm.

One of the cornerstones of Russian foreign policy in East Asia is establishing solid trade relationships with various Asian economies. In particular, Russia wishes to diversify itself away from excessive reliance on China as a source of investment and commerce. Russian economic outreach to Japan, while continuing at a steady pace, must also contend with a lingering territorial disagreement.

In this context, South Korea represents a powerful source of economic sustenance for Russia both in and of itself and as a measure of diversification among trade partners. Yet stringent Russian opposition to THAAD carries the risk that trade relations with South Korea could suffer. Indeed, Georgy Toloraya, former Russian ambassador to North Korea and South Korea, asserts that trade relations between the two countries have already experienced a setback.

One possible development that may be to Russia’s benefit is if the main opposition leader in South Korea, Moon Jae-in, wins the upcoming presidential election (which will be held by the end of the year). A recent poll by the Seoul-based Asan Institute for Policy Studies indicates that the biggest reason for popular opposition to THAAD was a lack of trust in President Park Geun-Hye over the decision to allow THAAD’s installation. If Moon can emerge victorious based on popular discontent with Park, then the new administration could potentially take measures to hinder or outright halt THAAD’s placement in South Korea.

Russia may benefit from increasing its diplomatic opposition to THAAD as a way of asserting its voice in regional affairs independently, rather than as an associate of China. Yet the Russian Far East’s relative economic underdevelopment and the minimal economic tools at Russia’s disposal to shape South Korean behavior, particularly given Russia’s need for South Korean investment, means that Russia will have a more difficult time in substantiating its claims that it will be able to actively respond to THAAD.

Even if Russia elects not to attempt to use economic measures against South Korea, anything that constitutes a hardening position in Moscow toward Seoul runs the risk of harming the two countries’ economic relationship.

Anthony V. Rinna is an analyst on Russian foreign policy in East Asia for the Sino-NK research group. He currently resides in South Korea.

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