By Lee Woo-gap
The Korea-China FTA was finally concluded on Nov. 10 after long negotiations. Some expect a rosy future with an open market of 1.3 billion people that is worth 5 trillion won, while others play it down, saying it does not encompass some important trade items.
My company produces equipment for shipbuilding, with an unrivaled competitiveness in valve spindles for low-speed engines. With world-class technologies and knowhow, we have been setting up mutually cooperative relationships with Chinese companies. We foresaw the Korea-China FTA to pass in time, which prompted us to begin a joint project to construct a large factory in China. It is clear that such advance moves by my company and others will be put under the spotlight with the new agreement. However, what we must pay attention to is soft power rather than traditional industries like shipbuilding, automobiles and steel.
Soft power is a concept on the opposite spectrum of hard power consisting of economy and military might, proposed by a scholar of international politics, Joseph Nye, in 1989. Soft power, easily put, is the power of culture. In the method through which power is exercised, soft power refers to the ability to make others want what I want them to do. That is, soft power is attraction to the one holding the power.
Currently, America’s status as the superpower is being challenged in many fields by China. There is a low chance, however, that the U.S. will give up its status to China in the 21st century because of its soft power. On a related note, Joseph Nye argued that soft power ultimately has a larger influence than economic or military assets.
China, boosted by its rapid growth, is increasing its overseas investment in order to leap into the front in the race to become an economic superpower. Compared to China’s economic prowess, however, its soft power is less developed, and so China, well aware of this fact, is attempting to establish Confucius Institutes around the world. Despite such efforts, China is still considered to be a child with a large body as far as soft power is concerned.
Then what about Korea’s soft power? It is undeniable that America’s popular culture is favored in many places in the world. Hallyu, or Korean wave, is the only culture that threatens the dominance of American culture. The Korean wave is targeting the world beyond Asia with K-pop, TV dramas, and games, causing several Asian countries including China to worry over their weakening indigenous popular cultures.
Under these circumstances, we must focus our attention to the influence of the Korea-China FTA on the countries’ soft power. Through the bilateral free trade deal, China will open its previously closed entertainment market to Korea, which means that Korean companies, in collaboration with Chinese firms, can now produce dramas, films, K-pop concerts, music albums and animated TV shows. Compared to China’s trade agreements with other countries, the Korea-China FTA will allow for the highest level of opening in the cultural services market, which will make it easier for Korean entertainment companies to advance.
But the most important aspect of all this is that the Korean wave will get closer to the 1.3 billion Chinese people, and it has a value that cannot be converted into money. The new situation will give even more of an advantage to the Korean cultural business, which is already enjoying worldwide fandom.
People around the world enjoy American popular culture, drinking Coca-Cola, enjoying Starbucks, and going crazy over McDonald’s. With the new FTA in place, 1.3 billion Chinese will now enjoy Korean soju, put on Korean makeup, and come to Korea for cosmetic surgery. Korea’s newfound attractiveness will also likely influence its foreign relations, causing China to become closer to it than North Korea. In the end, a relatively small flutter of open cultural markets may bring the typhoon that is the unification of the Korean Peninsula.
What then has caused China, a culturally proud country wary of invasive foreign cultures, to so easily adopt Korea’s soft power? There may be many reasons, but I believe a big part has been played by President Park Geun-hye whose openness caused many Chinese, including President Xi Jinping of China, to open up their hearts.
The international order in Northeast Asia resembles that of a cold battlefield, with the complex relationships among Korea, China, Japan and the U.S. forming a seemingly unsolvable not. An attractive president must be luck for Korea in such a situation.
The writer is CEO of Friend Co. and Harvard Co.