China-ROK trade ties to drive growth in region

Business leaders and experts said they expect China and the Republic of Korea to continue win-win cooperation in trade and supply chains, which will eventually contribute to sustainable growth and innovation in the Asia-Pacific.

Gao Chen, chairman of the China Chamber of Commerce in the Republic of Korea, said, "The visit by Chinese President Xi Jinping, the first time in 11 years, will … provide an important opportunity for expanding business cooperation."

Chinese President Xi Jinping attended the 32nd APEC Economic Leaders' Meeting in Gyeongju, the ROK, and paid a state visit to the country from Oct 30 to Nov 1.

Within the APEC framework, Gao said the cooperation can inject new momentum into the regional economy in various ways, including strengthening supply chain resilience, accelerating the progress of the Free Trade Area of the Asia-Pacific, and promoting innovation-driven growth.

For example, Gao said the two sides can jointly build a digital supply chain system by applying technologies such as 5G and blockchain in cross-border logistics.

The combination of ROK's technological advantage in semiconductors and China's comprehensive manufacturing system can form a regional industrial chain network with stronger risk resistance, he said.

The cooperation between China and the ROK in free trade can also provide demonstrative standards for APEC, said Gao.

China is the ROK's largest trading partner, and the ROK is China's second-largest trading partner, according to the Chinese Ministry of Commerce.

China and the ROK are part of the Regional Comprehensive Economic Partnership, or RCEP, the world's largest trade pact.

The China-ROK Free Trade Agreement entered into force in 2015, and the two sides have expressed their willingness to accelerate negotiations on the second phase of the agreement.

The two countries, together with Japan, are also advocating for deeper regional economic cooperation in East Asia by working toward a trilateral FTA.

Gao said the China Chamber of Commerce in the ROK will utilize frameworks such as APEC and the RCEP to promote China-ROK business cooperation and their integration into the regional supply chain.

Apart from the existing free trade agreements, Choi Pil-soo, professor of Chinese trade and commerce at Sejong University in Seoul, said China and the ROK should play the role of internal consumer markets for Asia.

"Currently, the US accounts for 13 percent of the global import market. China has 11 percent," said Choi. If the Chinese consumer market grows big enough, it will greatly contribute to the economic integration of East Asia, he said.

Greater prospects

In addition, Choi said he foresees greater prospects for China-ROK technological cooperation in the areas of robotics, batteries, and quantum science.

"The expansion of the Chinese market is the most important change that brings economic integration in East Asia," Choi said, adding that the integration of production factors must also be achieved.

Gao, from the China Chamber of Commerce, said that semiconductor relevant cargos to China account for more than half of ROK's total exports, while China's new energy vehicles, home appliances, and other products are accelerating entry into the ROK market.

"The rapid rise in Chinese brands in the ROK market reflects the dual drivers of China-ROK industrial chain complementarity and changes in consumption trends," said Gao.

Liu Weiwei, vice-president of medical supplies company Winner Medical, said the speech by President Xi gave the business sector more confidence in the region.

"I believe Chinese companies will work hand in hand with businesses from other APEC economies to face the challenges (of trade) and …return back to the track of win-win cooperation," said Liu.

In a signed article published in late October, Chinese Ambassador to the ROK Dai Bing urged the two countries to jointly oppose unilateralism and protectionism, resist "decoupling and chain-breaking", and safeguard the international free trade mechanism and the stability and smooth flow of industrial and supply chains.

As China will host the APEC Economic Leaders' Meeting in 2026, Dai said he hopes China and the ROK will closely coordinate, jointly seize the trends of the times, and send a strong message of openness, inclusiveness, and win-win cooperation.

kelly@chinadailyapac.com