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China, S.Korea business ties move forward

2017-02-27

Source: Global Times    Published: 2017-2-22

 

Cooperation between China and South Korea has deepened in various industries including automotive, consumer electronics and semiconductors sectors, and enterprises from the two neighbors should continue to work together instead of being "kidnapped" by politics, experts said on Wednesday.


In spite of recent tension over South Korea`s planned deployment of the THAAD missile defense system, the two countries have been moving toward positive business and trade relations in recent years, Xiang Junyong, deputy director of department of industrial research at the Chongyang Institute for Financial Studies of Renmin University of China, told the Global Times on Wednesday.


"For instance, Hyundai Motor and the Beijing Automotive Group set a good example for cooperation, others include South Korean electronics appliance manufacturers LG and Samsung as well as [firms in the] information technology sector," Xiang said.


From January to November 2016, total South Korean investment in China reached $4.37 billion, increasing 17.8 percent year-on-year, according to a post on the website of the Chinese Ministry of Commerce on February 3. Meanwhile, China imported $158.9 billion in goods from South Korea in 2016, accounting for 10 percent of the country`s total imports. This also makes South Korea the largest source of imports for China for a fourth consecutive year, the post showed.


Some South Korean firms have established major production bases in China, Xiang noted. For example, before the company shifted some of its production lines to other countries in South Asia, Samsung`s plant in Huizhou, South China`s Guangdong Province, used to produce 200 million smartphones every year, he said.


In the semiconductor sector, some manufacturers in China import significant volumes of chips and display panels like light-emitting diode and liquid crystal displays from South Korea, according to Xiang.


Since the two countries established diplomatic relations in 1992, trade volume has increased 50 times, as industries in the two countries are highly complementary, Liang Qidong, vice president of Liaoning Provincial Academy of Social Sciences, told the Global Times on Wednesday. "This is the fundamental basis for bilateral relations."


In addition, the finalization of a free trade agreement (FTA) opened up a new era for both sides, Liang noted.


The China-South Korea FTA officially came into force on December 20, 2015, which was not only a milestone for two countries but for the development of Asia, according to a statement on the website of Chinese Ministry of Commerce, which also noted that enterprises of both sides enjoy lower tariffs, which will help them better integrate into the whole value chain.

 

Less politics, more business


Although chaebol is the business structure in South Korea, enterprises should not be kidnapped by politics, noted Liang.


South Korea`s Lotte Group is expected to sign a land-swap deal with the South Korean government at the end of this month involving the company`s Seongju Golf Course and land owned by the South Korean military to deploy the THAAD system, a source close to the matter told the Global Times over the weekend.


The news of the deal came as Chinese Foreign Minister Wang Yi met with his South Korean counterpart Yun Byung-se at the Munich Security Conference in Germany on Saturday. During the conference, Wang voiced China`s opposition to the deployment of THAAD, stressing that "the security of a country should not be achieved at the expense of the security of others" and urging respect from South Korea, China Central Television reported.


Companies from the two countries have many business opportunities under the FTA framework, which should be explored more, Xiang noted. "Also, more progress is expected in the China-South Korea industry parks in Yantai and Huizhou, for example," he said.


In addition, the two countries should continue to enhance exchange in the tourism and consumption sectors, which will contribute to enhancing business ties, according to experts.


More than 8 million visitors from the Chinese mainland traveled to South Korea in 2016, accounting for half of the country`s total foreign visitors, domestic news portal sohu.com reported in December 2016.

 

Xiang Junyong is deputy director of department of industrial research at the Chongyang Institute for Financial Studies of Renmin University of China.

Key Words: China   Korea   THAAD   Xiang Junyong  

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