I’m from Singapore and visited Korea for the first time last week. I went to the National and National Folk Museums in Seoul, and noticed that the Koreans talked mostly of their early relations with China as one of “international exchange” or “cultural exchange”, seemingly having forgotten that Korea was a vassal state of the Chinese empire and paid tribute to it in order to maintain autonomy. Will the Koreans never admit to having been part of China?
Short answer: Koreans will never admit such a thing, because Korea has never been a part of China.
The confusion most comes from misunderstanding the term "vassal state." The concept of "vassal state" (alternately known as a "tributary state") does not really exist any more, nor has it truly existed in the history of the Western civilization. But it does vaguely sound like "colony" of the early 20th century vintage, which leads to the confusion that Korea was a part of China. That is simply not the case. "Vassal state" is a diplomatic concept that was unique to pre-modern Northeast Asia. The concept must be understood within that context, because it makes no sense outside of it.
(It must be noted that nationalistic Chinese and Japanese deliberately sow this confusion. By doing so, nationalistic Chinese exaggerate the reach of the Chinese Empire; nationalistic Japanese justifies Imperial Japan's invasion of Korea, by claiming that Korea was simply going from one colonial master to another.)
|Depiction of Korean tributary envoys to China, by Kim Hong-do, circa late 18th century|
Put yourself in pre-modern Northeast Asia for a moment. There is one nation in the center--China, or 中國 (literally, the "center country")--that has been clearly superior to all nations surrounding it in every aspect of civilization, including military, trade, arts, philosophy and science, for two thousand years.
Stop there, and let two thousand years sink into your brain. Think hard about how long that time is. Think about how old your grandparents are, and think about how many more generations you have to travel upward to hit two thousand years. Think about how much of our current tradition we take for granted, and how old those traditions are. Americans love to talk about their democratic tradition, but the age of that tradition is barely more than ten percent of the Chinese empire's history. Americans look to Europe for a deeper tradition, but European tradition prior to the Renaissance--which began in the 14th century--was nothing to write home about.
This exercise is necessary because we the modern people often get myopic, and think that beliefs of the past are dumb or absurd. Not so: if Chinese hegemony has been true for two thousand years, it is simply true to anyone living within those two thousand years in China or near China. It is like living next to the Roman Empire that never went away until the 20th century. In such a situation, it would actually be irrational to think anything other than that the world revolves around China.
In those two thousand years, Northeast Asia was a "sinosphere"--a vast region in which China acted as a center of gravity of every aspect of human civilization. Of course, other nations in the region, including Japan, Vietnam and Korea, developed their own civilization which was quite glorious in its own right. But every nation in the sinosphere shared roughly the same governing philosophy, religion, social structure and writing system, all of which ultimately originated from China.
In this sinosphere, the emperor of China naturally considered himself to be the ruler of the entire civilized world. To the Chinese empire, the entire world consisted of: (1) China, (2) civilized nations that are vassal states to China (i.e. having a diplomatic relation with China,) (3) civilized nations that are not yet vassal states to China ( i.e. having no diplomatic relation with China,) and (4) uncivilized barbarians. During the Qing Dynasty in the early 19th century, China even considered the Netherlands, Portugal, Italy and England to be China's vassal states.
Informed by Confucianism (the shared ideology in sinosphere,) there was a mutual obligation between China and its vassal states. China provided vassal states with governing legitimacy, military security and (relatively) free trade. Vassal states, in return, provided a pledge of loyalty, acceptance of the Chinese emperor as the ultimate governing authority and regular tributes.
(More after the jump.)
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Now, for the important part. Vassal states pledge loyalty to the Chinese emperor and give regular tributes. That's it. Vassal state had no other formal obligation to China. Vassal states had its own king, and had its own manner of choosing its king. Vassal states had its own government, which independently governed its own country. Vassal state collected its own taxes and had its own military. Throughout its relation with China before the modern times, all of the foregoing was true for Korea as well. China never chose any king on Korea's behalf. China had no formal role in forming Korea's domestic policies. China had no authority over ordinary Koreans, and China's authority over Korea's royal family was symbolic rather than real.
One may ask: what about the tributes? Is that not a tax that Korea paid to China?
No. The word "tribute" evokes an image similar to "tax," but it does not mean what you think it means. Recall that the relationship between China and its vassal states (including Korea) was based on Confucianism, which provides for a hierarchy with mutual obligations. Casual observers often say Confucianism is hierarchical, while losing sight of the fact that under Confucianism, there are obligations that run both downward and upward within the hierarchy. Even as the subordinate recognizes the authority of the superior, the superior must play its part to earn the authority.
In the context of sinosphere, this meant that the Chinese empire repaid every tribute. In fact, this is how the tributary system worked in sinosphere: the vassal state sends the tributary gifts as a sign of respect for China's authority. Upon receiving the gifts, the Chinese emperor would send back his own gifts to the vassal state's ruler as a sign of appreciation. This is hardly a tax on Korea; it was a trade between Korea and China under a different name.
There are ample historical evidence to show that both Korea and China recognized, as a practical matter, that Korea's tribute was a trade rather than a tax. For example, in the early days of Joseon Dynasty, China's Ming Dynasty required that Joseon pay tribute once in three years. But Joseon Dynasty vigorously insisted that it would pay tribute three times a year, and did end up paying tribute three times a year, and eventually four times a year. This makes no sense if the tribute were a tax; nobody volunteers to pay more taxes. Joseon Dynasty wanted to pay more tribute because it turned a profit on the return gift. 
Often, Joseon paid tribute by plying horses to the Ming Dynasty, which constantly needed horses to fend off barbarian attacks. The royal records from the Joseon Dynasty show that Korea did not send its own horses. Rather, Joseon purchased the horses from the Jurchens and re-sold the horses to the Ming Dynasty for ten times the price.  Being China's vassal state was particularly lucrative to Korea because outside of the tribute-repayment trade, China did not allow any international trade since the Ming Dynasty. 
The modern parallel to this relationship is not the colonial holds that appeared in the late 19th and early 20th century. The modern institution that is the closest to the sinosphere's tributary system is the British Commonwealth. Did you know that Canada and Australia had a queen? A number of states within the British Commonwealth--including Canada and Australia--still consider the British queen to be their head of state. Governor-General of Canada, who is appointed by the British Queen, summons the Canadian Parliament; Governor-General of Australia, who is also appointed by the British Queen, has the authority to dismiss the Australian government. (And in 1975, this authority was actually exercised.) Based on the foregoing, one could perhaps make an argument that Canada and Australia were a part of the United Kingdom. But given that Canada and Australia have their own governments just like Korea throughout its history before the 20th century, few would take that person seriously.
 From 이덕일, <조선 최대 갑부, 역관>
 It must be noted that some Korean historians are skeptical of the claim that the tributary system always resulted in Korea's financial profit. See, for example, 계승범, <조선시대 해외파병과 한중관계>. But even those scholars generally agree that Korea clearly benefited in the non-economic sense, in the form of China's military protection, importation of books, art pieces and luxury goods, emergency lines of credit during famine, etc.
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