Compliance News / Compliance

China/Korea FTZ Proposed

Historic Opportunity to Open Trade

December 2, 2013
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China is actively strengthening ties with South Korea in the wake of signing and economic development agreement last June. This past week, China’s Vice Minister of Commerce Gao Yan made the rounds of conferences to outline China’s new, closer relationship with South Korea while supporting China’s “new vision” and strategy of “new economic reforms” that start “a new journey of Chinese dreams.”

To strengthen ties between the two nations, Gao proposed establishing a China-South Korea Free Trade Area as soon as possible, further deepening trade and investment cooperation, and enhancing regionals and international cooperation and collaboration in “key areas,” in line with the reforms promulgated at the Third Plenary Session of the 18th CPC Central Committee earlier this year: to open the economic system for domestic and international commerce to enhance the free flow of goods and currencies, to relax investment access, speed construction of free trade zones and to expand access to inland and border areas.

More specifically, Chinese and South Korean enterprises “shall carry out exchanges, give full play to their comparative advantages, learn from each other for mutual benefits, which will be conductive to promoting (the) service outsourcing industry(ies) of the two parties to continue to make new achievement(s) for win-win cooperation,” Gao says.

He continues, saying China will promote comprehensive reforms and aims to make “decisive achievements in key areas by 2020” that will benefit other nations. He says, specifically, that these reforms will “provide a new historical opportunity and broader space for China-Republic of Korea economic and trade cooperation and the development of Korean enterprises in China.”

Gao classifies the program of reforms as an “outward (facing) economic system with Chinese characteristics.” As he points out, “China and ROK are geopolitical neighbors, with similar customs and culture and unique advantages to deepen cooperation and friendship, hoping that the government and academia of the two countries to strengthen exchanges and seek common development.”

 China is South Korea’s largest trading partner, and South Korea is China's third largest trading partner. Bilateral trade has exceeded $250 billion. South Korea is China’s third largest source of foreign investment at $55.3 billion. Investment is growing rapidly, Gao says. China’s investment in Korea, from January to September 2013, is quite small at $140 million, but he stresses that it is growing at 150 percent annually. 

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