By Yoon Sung-won
Korea should diversify trade channels in Asia and boost non-governmental diplomatic activities to cut the China risk from its the economic sector, according to trade experts here.
The experts said Beijing's recent retaliatory actions against the Korean government's plan to introduce a Terminal High Altitude Air Defense (THAAD) system here is a warning to Korea to reduce its trade dependency on China.
"The Chinese market is indeed important. But now we have to diversify trade partners. The dependency on China has been too high," Korean-American Association (KAA) Chairman Park Jin said during a group discussion session hosted by The Korea Times in Seoul, March 10. "India is growing fast and Russia, which has the world's largest resource base, is right on top of us. Why not consider a free trade agreement with Japan? Southeast Asia is the largest construction business market worldwide."
Park stressed China's latest retaliatory actions have revealed its true face after rapid improvements in Sino-Korean relations over the last two decades.
"Utilitarianism has become the key in international relations. We need to think about national interests through hardheaded approaches," he said. "As China escalates economic pressure, it is an opportunity for Korea to reinforce internal stability."
Besides Park, Trade Vice Minister Woo Tae-hee, Korea Institute for Industrial Economics and Trade (KIET) President Yu Byung-gyu and Shin Seung-kwan, the president of Institute for International Trade (IIT) of Korea International Trade Association, participated in the group discussion.
The experts said Korea should coolly seek common ground rather than extreme responses like beginning a suit with the World Trade Organization.
"We may face a temporary shock once the missile defense system is deployed," Shin said. "But China will regain its composure and come to think more about relations. I don't think the tension will last for years."
The vice minister also said, "We don't need to overreact. We should act calmly to protect our interests."
Yu said Korean businesses should take extra care to meet China's social growth.
"Public perceptions of safety and social issues are also improving in China. So Korean enterprises should be more prudent about the safety of products and services they provide in China and about protection of intellectual property rights," the KIET president said. "Consequences will return like a boomerang unless the businesses change from the careless past."
According to the vice minister, 19 out of 28 cosmetics items that China discontinued customs clearance for last November were Korean products, mostly made by small businesses. Part of the reasons for discontinuing customs clearance was the lack of a sanitary inspection certificate on the items, Woo said.
Yu also pointed out Korea should end its internal dispute over national security and effectively deal with international issues in one voice.
"Chinese news media repeatedly broadcasts Korea's internal disputes over the THAAD issue," he said. "It is important to make a consistent argument."
"I agree the key is domestic division. China can tap into the division and make aggressive moves," the IIT president said. "We need to meet the Chinese government for talks and set the cause (for reconciliation)."
The diplomatic relationship between Korea and China marked its 25th anniversary this year. The experts said the two countries should build even more beneficial relations.
"The Sino-Korean relationship is bigger than the THAAD issue," Park said. "Public diplomacy activities by the Chinese people, media and academia are important to establish an extensive partnership."
Yu said, "It is more about the public sector than central politics. We need to boost the so-called grassroots trade diplomacy from now on."