Lee Hyo-sik is Finance Desk editor at The Korea Times. He manages finance-related stories on macroeconomics, banks, stocks, bonds, crypto etc. He is passionate about covering what's happening in Korea's financial industry and explaining it to both Korean and non-Korean readers. You can reach him at leehs@koreatimes.co.kr. Your insights and feedbacks are always appreciated.
Korea-China free trade to gain momentum
President Park Geun-hye and Chinese President Xi Jinping, left, hold summit talks at Beijing’s Great Hall of the People Wednesday, to discuss ways to advance bilateral relations and deal with North Korea. / Yonhap
By Lee Hyo-sik
Beijing asked to make it easier for Korean firms to expand investment
By Lee Hyo-sik
President Park Geun-hye, accompanied by the largest-ever business delegation during her three-day state visit to China, discussed a wide range of business issues with Chinese leaders and agreed to boost economic cooperation, Wednesday.
Among others, they have agreed to have the Korea-China Free Trade Agreement (FTA) go into effect as quickly as possible to increase bilateral trade and cross-border investment.
In a meeting with Chinese Prime Minister Li Keqiang, who oversees the economic policies of the world’s second-largest economy, on Wednesday afternoon, the two agreed to finalize the Korea-China FTA in the near future and lower trade barriers so that Korean companies can do business more freely in China and vice versa.
Park’s visit comes at a time when Korea’s exports to China have been declining sharply as Chinese firms buy less finished and intermediate goods from Korean partners amid the slowing economic growth.
“I think the Korea-China FTA tops Park’s economic agenda because it is the best way to prop up Korea’s sagging exports to the world’s second-largest economy,” said Lee Chang-kyu, an economist at the Korea Institute for International Economic Policy. “I think China can have the FTA take effect any time it wants. But the ball lies on the Korean side, because it may take some time for the National Assembly to ratify the accord.”
Korea and China signed the trade liberalization pact in November 2014, but it has yet to go into effect as parliaments in both countries have yet to approve it.
“The Korea-China FTA was just forwarded to the National Assembly for ratification. And it will take some time for the assembly to pass it,” Lee said, citing the opposition parties’ lukewarm stance on the pact.
“Besides the FTA, what is on Park’s mind is to enable Korean firms to increase shipments to China,” the economist said.
“She also likely asked her Chinese counterpart to make it easier for Korean companies to invest there and allow Chinese firms to set up a presence in Korea more freely,” he said.
On Friday, President Park plans to visit Shanghai and attend the Korea-China Business Forum, organized by the Korea Chamber of Commerce and Industry (KCCI). Nearly 160 heads of businesses, including KCCI Chairman Park Young-maan who is also Doosan Group chairman, have accompanied the President to China.
About 128 Chinese business leaders are also expected to take part in the gathering to discuss an array of business-related issues.
President Park will give a speech at the forum, stressing the importance of Korea-China economic cooperation.
“The President will encourage Korean and Chinese business leaders to increase exchanges and cooperate on a wide range of business areas,” Lee said.