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South Korea's Lee aims to balance ties with China

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Xi and Lee to discuss denuclearisation of Korean peninsula

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South Korea seeks easing of China's entertainment content

restrictions

By Jihoon Lee and Ju-min Park

GYEONGJU, South Korea, Nov 1 (Reuters) - Chinese

President Xi Jinping will wrap up his three-day visit to South

Korea on Saturday with a state visit hosted by President Lee Jae

Myung, the newly elected U.S. ally who has pledged to balance

Seoul's ties with Beijing.

The stakes are high for Lee who assumed office in June

following the ouster of his hawkish predecessor over a failed

attempt to impose martial law. Lee faces the dual challenge of

protecting South Korea's export-driven economy and lowering

tensions with North Korea amid rising China-U.S. competition.

Earlier this week, Lee also hosted U.S. President Donald

Trump for a rushed state visit, showering him with gifts and

praise before announcing a surprise trade deal aimed at lowering

U.S. tariffs in return for billions of dollars in South Korean

investment in the United States.

The South Korean president is set to hold similar events for

Xi on Saturday on the sidelines of the Asia-Pacific Economic

Cooperation (APEC) forum in Gyeongju, including a summit meeting

and state dinner. It is the first time in 11 years that Xi has

visited South Korea.

Xi also met with Trump on Thursday ahead of the APEC summit,

striking a deal that includes lower U.S. tariffs on Chinese

goods in exchange for Beijing's crackdown on illicit fentanyl

trade, the resumption of U.S. soybean purchases and continued

flow of rare earths exports. The Chinese president held talks

with the leaders of Japan, Canada, and Thailand as well.

Lee's office has said that he and Xi will discuss the

denuclearisation of the Korean peninsula, a diplomatic phrase

used to refer to North Korea's nuclear weapons, which are banned

by United Nations Security Council resolutions.

In response, Pyongyang, a military and economic ally of

China, dismissed the denuclearisation agenda as an unrealisable

"pipe dream."

Trump had offered to meet with North Korean leader Kim Jong

Un during his visit to South Korea, but Pyongyang did not issue

a public response.

Seoul is a key U.S. military ally in Asia, hosting thousands

of American troops and relying on the U.S. nuclear umbrella for

protection from nuclear-armed North Korea.

Yet its economy is heavily reliant on not just the U.S.,

which has been imposing tariffs and pushing for investment to

offset trade imbalances, but also China, which has grown

increasingly challenging for South Korean companies and wields

influence over North Korea.

CHARM OFFENSIVE?

As Trump skipped this week's APEC leaders' summit, Beijing

positioned itself as the predictable champion of free and open

trade, a role the U.S. has dominated for decades.

John Delury, senior fellow at the Asia Society, said China

has yet to launch a charm offensive toward U.S. allies like

South Korea, amid pressure from Trump's tariffs and uncertainty

over U.S. military commitments.

"I think Beijing is in a phase one approach where they are

sitting back a little bit and letting the Trump administration

do damage on its own," he said.

"We have not seen China launching big charm offensives to

try to capitalize on some of that damage," he added.

A second phase could include more outreach, but it could

also see Beijing ramp up pressure of its own, he said.

South Korea has voiced concerns about the impact of China's

controls on rare earth exports and called for the swift removal

of Chinese sanctions on five U.S.-linked units of South Korean

shipbuilder Hanwha Ocean. Beijing said the sanctions

were related to security risks stemming from the company's

cooperation with U.S. investigations.

Seoul is also hoping that Xi's visit may lead to Beijing

relaxing years-long restrictions on South Korean entertainment

content, effectively banned after the 2017 deployment of the

U.S.-led Terminal High Altitude Area Defense (THAAD) missile

defence system in South Korea.

South Korea has also expressed concerns over structures

placed in disputed waters between the two countries, which China

claims are for fishing purposes.

An APEC official told Reuters on Friday that member states

were "working around the clock" to negotiate a joint declaration

on free trade.