Abstract
On August 24, 1992, the ROK established full diplomatic relations with the PRC and severed official ties with the ROC on Taiwan, hoping to strengthen its ties with Beijing, and offset PRC-DPRK relations. For both geopolitical and economic factors, the PRC adopted a two-Korea policy after a long and bitter debate among its elites. Deng Xiaoping, was embarking on an open door and reform crusade and highly valued the “Korean connection” as a source of capital and technology, so his support made the difference. Seoul's defection was a severe blow to Taiwan, as the ROK was the only Asian country that still recognized the ROC. Taiwan also harbored resentment because ROK officials intentionally misled Taipei on the ongoing secret diplomatic normalization talk with the PRC, and ordered the suspension of direct flights between Korean and Taiwan. Trade, however, has steadily grown. Although Taiwan and the ROK are democracies, they have virtually no political/governmental interactions, apparently because President Kim Dae-jung places high priority in his sunshine policy and does not wish to offend Beijing. On the other hand, Taiwan has used humanitarian aid, cooperation to dispose Taiwan's nuclear waste, tourism, investment and negotiation of direct air link to move closer to Pyongyang. How does Beijing see the future of the Korean peninsula? For the geopolitical and economic reasons, PRC does not favor Korean unification under a non-communist regime, nor under North Korea. In the years to come, Beijing's goals are to keep peninsula divided, and enhance Chinese influence and reduce the influence of the United States, Japan and Russia.