By Hyunjoo Jin and James Pearson
SEOUL (Reuters) - The liberal politician expected to succeed disgraced Park Geun-hye as South Korea's next president could make significant policy changes on North Korea, on a U.S. missile-defense system that has enraged China and on powerful big business.
A Constitutional Court on Friday dismissed Park from office after upholding her impeachment over a corruption scandal involving "chaebol" - the family-run conglomerates that dominate Asia's fourth-biggest economy.
A presidential election will be held by May 9 and opinion polls suggest South Koreans will opt for change by electing a liberal into the presidential Blue House, ending nine years of conservative rule.
The front-runner is Moon Jae-in, a human rights lawyer who was a top aide to former President Roh Moo-hyun, an advocate of a "sunshine policy" of engagement with North Korea.
Moon has criticized the two former conservative presidents – Park and her predecessor, Lee Myung-bak - for derailing the progress made inter-Korean relations during the previous liberal administrations.
He calls for a "two-step" approach on North Korea, with talks leading first to "economic unification" and ultimately "political and military unification".
Moon on Sunday stressed the need to "embrace and be united with" the North Korean people, while adding that he could never accept its "dictatorial regime", or its trampling of rights.
He denounced the North's "cruel and ruthless behavior" in the wake of the murder in Malaysia last month of Kim Jong Nam, the estranged half-brother of North Korean leader Kim Jong Un.
But he told a news conference there was no choice but to recognize Kim Jong Un as leader.
"We can’t deny that the ruler of the North Korean people is Kim Jong Un. We have no choice but to recognize Kim Jong Un as a counterpart, whether we put pressure and impose sanctions on North Korea or hold dialogue," Moon said.
A conciliatory line might face opposition from main ally the United States where President Donald Trump's aides are pressing to complete a strategy review on how to counter North Korea's missile and nuclear threats.
North Korea conducted two nuclear tests last year, as well as numerous missile launches, the latest on March 6 when it fired four ballistic missiles into the sea off Japan.
Speaking to reporters recently, Moon invoked his old boss, Roh, and Roh's predecessor, Nobel peace prize winner Kim Dae-jung, the architect of the "sunshine policy", as inspirations behind his bid for the presidency.
The two former liberal presidents both held summits with the North's then-leader, Kim Jong Il - the only such meetings ever -promising reconciliation and initiating joint projects including the Kaesong Industrial Complex and tours to Mount Kumgang in the North.
Both were suspended under conservative administrations.
DELAY IN DEPLOYMENT?
Moon said South Korea should resume operations at Kaesong - where South Korean companies operate factories with North Korean workers on the North Korean side of the border - regardless of North's nuclear ambitions.
Some conservatives have denounced Moon as "pro-North".
He would also face conservative ire if he were to delay deployment of a U.S. missile-defense system.
Alarmed by North Korean weapons tests, South Korea and the United States have agreed to deploy a Terminal High Altitude Area Defense (THAAD) missile system in South Korea, angering China which sees its sophisticated radar as a threat to its own security.
The first elements of the system arrived in South Korea last week.
Moon says a final decision on deployment should be made by the next government, and parliament should approve it.
But that could cost him in the polls if defense become a big election issue, said Myongjin University politics professor Kim Hyong-joon.
"He's perceived as lacking a sense of national security," Kim said.
On business, Moon has called for reform of the chaebol, addressing Koreans' concerns over their influence, and their involvement in the scandal that brought down Park.
Moon has said chaebols stifle smaller companies and are detrimental to the economy. But he is unlikely to introduce radical reform, or ramp up corporate taxes, let alone dismantle them, as some critics urge.
"I just want transparent and democratic management," he said recently.
(Reporting by Hyunjoo Jin; Additional reporting by James Pearson and Cynthia Kim; Editing by Robert Birsel & Simon Cameron-Moore)