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Trade with S. Korea to US$115b

By Jiang Wei (China Daily)
Updated: 2006-10-14 09:13

Two-way trade between China and South Korea is expected to hit US$115 billion in 2006, according to the Ministry of Commerce's latest predictions.

Imports and exports between the two countries grew 17.8 per cent year-on-year in the first half of this year to US$61.8 billion, said the ministry's department of Asian affairs. Bilateral trade for the whole year is expected to total US$115 billion, "as trade volume is usually higher in the second half of a year."

Trade between China and South Korea reached US$111.9 billion in 2005.

There were no big trade conflicts between the two countries in the first half of this year, excepting a South Korean dumping claim against Chinese PVA products.

Bilateral trade maintained double-digit growth in the first six months despite a slight slow-down in the growth rate.

"China's trade deficit against South Korea narrowed in the first six months as exports grew faster than imports," the department said.

Although China had a record trade surplus of US$101.9 billion last year, the nation's trade deficit against South Korea reached US$41.7 billion.

South Korean President Roh Moo-hyun's visit to China on Friday, which closely followed the North Korea nuclear test, mainly focused on "China-South Korean bilateral relations and the Korean peninsula issue," but was also expected to boost bilateral economic and trade relations, including discussing? further studies on a possible free trade agreement.

Both sides would benefit from free trade, as the two economies complement each other, said Li Xiaofeng, professor with Fudan University.

"China means a great market, abundant human resources and more business opportunities for South Korea," said Li. "Advanced technology and capital from South Korea will help Chinese enterprises improve their innovation capabilities."

He said he also expected the possible free trade agreement to minimize trade conflicts between China and South Korea. The two countries first launched a joint feasibility study on a free trade agreement last year.

Over the past 14 years, bilateral trade between China and South Korea has increased about 20 times from the US$5 billion it stood at in 1992.

China mainly imports integrated circuits, semiconductors, synthetic resins, auto parts and flat screen televisions from South Korea, while it exports spare computer parts, clothing and coal.

Bilateral trade between China and South Korea is targeted to reach US$200 billion by 2012. In order to reach the target, the two countries must maintain an annual 13 per cent growth rate in two-way trade over the next six years.

According to South Korean statistics, China is still the largest overseas investment destination, accounting for around one third of South Korea's outbound investment.