China has emphasized that it pursues egalitarian multilateralism to counter the West’s hegemony on the international stage, but its actual course of actions is confusing at best. China stresses vertical hierarchical order centered on China as if it is treating neighboring countries as subordinate states during the feudal age. If a neighboring country causes its wrath, it does not hesitate to retaliate against the country, be it big or small, just like a hegemonic country would do in the pre-modernistic era.
Likewise Palau, a tiny Pacific island with a population of some 20,000, suffered damage from China’s retaliatory action. The island country, whose population equals the number of daily newborns in China, formed diplomatic ties with Taiwan. This angered China, which is consistently following "One China" policy.
The Chinese government imposed a ban on group travels to Palau by Chinese tourists by citing lack of diplomatic ties. As the number of Chinese tourists to the island state was halved, Palau Pacific Airways, run by a Taiwanese airliner, shut off its China routes in July. Large Chinse investors who had constructed hotels and bought large buildings on the island also dumped their properties there. Palau, whose service industry including tourism accounts for 80 percent of its economy, was dealt with a massive blow.
Since China's population accounts for 20 percent of the global population, it is completely different from the U.K. or the U.S., which enjoyed supremacy with relatively small populations. China has so large economy of scale and power that it can even weaponize its own tourism industry. In addition, if the Chinese yuan emerges as a key currency like the U.S. dollar, it will be able to threaten the entire economy of a country simply by excluding economic players from China’s financial system, the way the U.S. does with its independent sanctions. What have happened in South Korea, Canada and Palau may herald what will happen when China comes to rule the world.
It is the fate of the Korean Peninsula that neighbors and should co-exist with China, whether we like it or not. If South Korea is to strengthen its China diplomacy, Seoul needs more "optimistic realists" who carefully take into account potential risks while positively perceiving relations with China at the same time, rather than "pro-Chinese people" who are largely biased. Seoul should run a system of mid- to long-term national strategy that will examine whether the government is not excessively biased towards a certain country in the areas of politics, economy, society and culture, and prepare itself accordingly.
Palau learned the weaknesses of its tourism industry only after Chinese tourists accounted for nearly half its foreign tourists. In a bid to counter China’s threat belatedly, Palau started to promote an eco-friendly, high value-added tourism industry in order to attract tourists from Europe and Japan, whose per-capita expenditure is larger than Chinese. For this reason, the island country started to preemptively ban the use of sun cream to protect its coral reefs, following Hawaii’s suit. The Palau government recently said while Chinese tourists have declined in number, it saw tourism revenue increase due to a hike in per-capita expenditure by foreign tourists. The U.S.-China trade war and what has happened in Palau remind us of the lesson in the "Act of War" that the winner and loser of a war are decided even before the war breaks out.
Yong Park firstname.lastname@example.org