South Korea's President Lee Jae-myung (left) delivers a speech after taking his oath during his inauguration ceremony at the National Assembly in Seoul on June 4, 2025. Photo: VCG

On Wednesday, Lee Jae-myung of South Korea's majority liberal Democratic Party was elected as the country's 21st president. Against the backdrop of economic recession, diplomatic imbalance and political polarization, Lee's economic reform agenda and international cooperation strategy have drawn widespread attention.

South Korea's economy is currently facing serious challenges, including low growth, a rising unemployment rate and a low birth rate. Amid these conditions, public dissatisfaction with the economic situation has intensified, making reform an urgent priority. In his inaugural address, Lee made it clear that his administration would kick-start a virtuous economic cycle using state finances as priming water. Based on this vision, he proposed a series of reform initiatives aimed at driving economic growth and advancing social fairness. However, these measures face challenges. Structural contradictions in the South Korean economy remain pronounced, and Lee will need to navigate multiple pressures, including the impact of US tariffs, the transformation of South Korea's export-led economy and a deepening demographic crisis.

Regarding foreign policy, Lee has introduced a "pragmatic diplomacy" framework that emphasizes prioritizing national interests and maintaining balance among major powers, signaling a marked shift. This stands in sharp contrast to the "values-based diplomacy" pursued by former president Yoon Suk-yeol.

While the US remains a key ally and trade partner for South Korea and the Lee administration recognizes the security importance of the South Korea-US alliance, it also aims to secure greater economic autonomy. According to the latest statement from the presidential office, Lee launched an emergency economic task force on his first day in office to discuss a comprehensive economic revitalization plan and seek reductions in US tariffs.

Besides, Lee has emphasized that China is "an important trading partner and has an impact on the security of the Korean Peninsula," vowing to manage the bilateral relationship "in a stable manner." This is a clear departure from the stance of the Yoon administration. During Yoon's tenure, South Korea leaned heavily toward the US in its foreign policy and repeatedly followed Washington's lead on China-related issues, leading to a downturn in China-South Korea relations.

On Japan-South Korea relations, Lee emphasized that although historical disputes and territorial claims over the islets known as Dokdo in South Korea and Takeshima in Japan remain unresolved, the two countries share broad common interests in areas such as the economy, security, technology and cultural exchange. He advocates separating contentious issues from cooperative agendas and pursuing compromise through a pragmatic approach.

Regionally, Lee said that he would pursue the restoration of communication between South Korea and the North, according to Reuters. If relations between the two sides improve, it would not only contribute to greater stability on the Korean Peninsula but also create new opportunities for economic cooperation for South Korea.

In general, if effectively implemented, Lee's "pragmatic diplomacy" strategy may secure greater strategic autonomy amid great-power competition. Reviving and deepening ties with China may provide opportunities to open new markets and avenues for cooperation. Through multilateral engagement, South Korea could play a more active role in global affairs and enhance its international stature.

South Korea's economic reforms and international cooperation influence regional and global dynamics. If improved, relations between North and South Korea would boost regional peace, stability and economic integration. If enhanced, economic collaboration among China, South Korea and Japan would strengthen the region's global industrial position.

Under Lee's leadership, South Korea faces both opportunities and challenges in economic reform and international cooperation. The president must balance corporate relations with economic restructuring and industrial upgrading. In international affairs, he needs to strategically balance relations with China and the US, avoiding over-reliance on either. Ultimately, South Korea's path under Lee involves breaking deadlocks and reshaping its economic and diplomatic landscape to achieve sustainable development in a complex global environment.

The author is a professor at the School of Northeast Asian Studies at Shandong University. opinion@globaltimes.com.cn