Xi, Park tackle nuclear issue

Talks between Chinese and South Korean leaders Thursday injected momentum into bilateral economic cooperation, including a free trade deal, and discussed denuclearization of the Korean Peninsula. But divergences remain on the appropriate way to deal with Pyongyang.  [Special coverage]

Chinese President Xi Jinping, who arrived in Seoul on Thursday morning for a two-day state visit, received a warm reception and held talks with his South Korean counterpart Park Geun-hye.

Addressing a press briefing following the talks, Park said Xi's visit serves as a clear message for denuclearization of North Korea, reported the Yonhap News Agency.

It is the first time that a Chinese president has visited Seoul before Pyongyang after taking office. The last China-North Korea summit was held three years ago.

"In today's summit the two leaders agreed that the denuclearization of North Korea should be realized by all means and agreed that [we] resolutely oppose a nuclear test," Park was quoted as saying by AFP.

However, the joint statement released by the Xinhua News Agency didn't name North Korea and referred to the issue as denuclearization on the Korean Peninsula, which is consistent with Pyongyang's claim that denuclearization must apply to the whole peninsula, including the US nuclear umbrella.

In the joint statement, the two countries agreed that denuclearization and maintaining peace and stability of the Korean Peninsula are in the common interests of all countries involved in the Six-Party Talks, and called for efforts to create conditions for resumption of the talks.

No explicit criticism of Pyongyang was included in the document, though Seoul had hoped that China could endorse its position of zero tolerance on North Korea's possession of nuclear weapons.

Kim Heung-kyu, a professor with the Department of Political Science at Ajou University in Suwon, South Korea, said Beijing is reluctant to make straightforward statements against North Korea. "Given the uncertainty in the future, China must leave some room for maneuvering, so it's reasonable for China to keep its own position on denuclearization on the peninsula," Kim told the Global Times.

The expert also noted that Xi's visit to Seoul itself acts as a strong signal to the North that Chinese foreign policy is changing toward pragmatism instead of ideological bonds or geopolitical heritage.

China's policy objectives on the peninsula used to stress stability over denuclearization, but analysts say the top priority has been shifting as China takes a more active role in denuclearization.

"Since 2012, the US has deployed advanced weaponry such as B-52 bombers to the region, citing North Korea's threat. It made China realize the grave threat imposed by the US rebalancing strategy, so it gave rise to the importance of denuclearization," said Wang Sheng, a professor on international politics studies at Jilin University.

Kim Heung-kyu attributed the recent adjustments in China's North Korea policy to the country's changing "foreign policy DNA," noting as China's identity becomes that of a great power, its calculations on the peninsula have also evolved.

"Extending China's influence over the whole peninsula [instead of just North Korea] can better serve its national interests," the professor said.

Seoul, which mainly manages North Korea in coordination with the US, is also seeking China's support. Park had used her meetings with Xi to rally support for her "Trust-Building Process" in managing inter-Korean relations.

"The South used to rely on its alliance with the US to press Pyongyang and asked China to do the same, however, the Obama administration's policy only escalated the tension. Therefore, there is growing understanding in Park's administration that it is in dire need of China's help in both the denuclearization process and a future reunification," Wang told the Global Times.

In Pyongyang, the official Korean Central News Agency Thursday quoted a spokesperson from the Korean People's Army as saying that the North will continue firing tactical guided missiles. North Korea fired several missiles in the past few days, which was interpreted by some as a message of displeasure against Xi's visit to Seoul.

Kim Heung-kyu said he expects Pyongyang to make further provocations as a sign that they will not submit. In the meantime, "they can find leeway to strengthen the relationship with Japan and work harder to have better relations with Russia."

Japan said Thursday it will lift some sanctions on the North in return for Pyongyang's reopening of a probe into the conditions of abducted Japanese.

On bilateral political and security cooperation, Xi proposed that the two sides formally start maritime demarcations negotiation in 2015, and an early establishment of hotlines between the two defense ministries.

On the economic front, Xi and Park said in the joint statement that the two countries seek to strike a free trade deal by the end of this year.

China is South Korea's largest trade partner, while the South is China's third largest trade partner. In 2013, bilateral trade volume reached $229 billion, with South Korea enjoying a surplus of $62.8 billion. The two are eyeing a trade growth to $300 billion in 2015.

Kim Do-hoon, president of Korea Institute for Industrial Economics & Trade, said that once the free trade pact is sealed, he expects the South Korea surplus to grow, as the South's exports to China will see higher increase.

"But this doesn't mean a negative impact on Chinese industry. Given the structure of Korean exports to China, which sees Korean components and materials go to Chinese manufacturing, the cheaper imports could help shore up the competitiveness of Chinese industry," Kim told the Global Times.

According to the economist, the sticking point in the negotiation is the potential impacts on South Korea's agricultural sector and China's high-tech industry, but that can be minimized by adding some of those items to a sensitive list excluded from tariff reductions.

China agreed to award an 80 billion yuan ($12.88 billion) licence for South Korea to invest in Chinese capital markets, help launch the direct trading of the yuan-won pair and establish a yuan-clearing system in South Korea, Reuters reported.

Meanwhile, people-to-people exchanges were also highlighted, with both sides committed to promoting tourism and youth exchanges and visas waiving for official passport holders.

China also planned to loan a pair of pandas to South Korea.