Friends and Neighbors

Relations between China and the ROK on solid ground


BEIJING REVIEW reporter Ding Zhitao recently interviewed Kim Ha Joong, Ambassador of the Republic of Korea (ROK) to China, on his country’s increasingly closer bilateral economic and trade ties with China.

BEIJING REVIEW: ROK-made electric household appliances are currently popular in China. Also, Beijing, as well as other cities in China, hosts many enterprises and production centers from your country. This all reflects increasingly close economic and trade relations between the two nations. How do you view the significance of China to ROK companies?

“Exchanges and cooperation between the two countries have room for expansion.” —Ambassador Kim Ha Joong

Ambassador Kim: Since 2001, China has grown to be ROK’s top investment destination. ROK enterprises entering China have increased markedly since 2002. In 2003, ROK businesses invested $4.49 billion in China. By the end of 2003, total ROK investment to China reached $19.69 billion.

I believe that more investment by ROK businesses in China will benefit both countries. The ROK gets the opportunity to explore a rising market with a population of 1.3 billion, as well as the chance to adjust its domestic industrial structure. As for China, more than 20,000 ROK enterprises based here will be offering jobs. Since most ROK enterprises are export-oriented, they make a great contribution to China’s export.

If China’s advantages in solid basic scientific research, a huge market, rich natural resources and competitive human resources are combined with the ROK’s advanced production technologies, application capabilities and development experiences, huge economic benefits can be achieved for both countries. Armed with these advantages, the ROK and China can jointly explore the international market.

Besides economic benefits, increasing ROK investment in China also helps expand exchanges and cooperation between the two peoples and contribute to their friendship. In this sense, I also look forward to more Chinese enterprises developing in the ROK. In this respect, exchanges and cooperation between the two countries have room for expansion.

Up to the end of 2003, China’s trade deficit with the ROK had totalled $97.06 billion since the two countries established formal diplomatic relations in 1992. The number is approaching China’s total export volume to the ROK between 1992 and 2003. Has the trade deficit issue between the two countries eased recently? What kind of measures will the ROK adopt to change the situation?

As a considerable number of ROK exports to China are raw materials or equipment for ROK enterprises based here and ROK enterprises are enlarging their investment in China, the trade imbalance will inevitably last for a while.

However, other elements should also be considered to address the issue of trade deficit. There are 35,000 ROK students here in China, and approximately 2 million visitors from the ROK tour China annually. They spend several billions of dollars in China.

According to the ROK International Trade Association (KITA), out of the ROK’s gains of $6.35 billion over China in 2002, ROK enterprises’ investment in China accounted for $3.46 billion and trade surplus was only $2.89 billion.

The ROK Government is confident that bilateral trade is heading in the appropriate direction in terms of long- and medium-term trade balance. To achieve this goal, the ROK Government has been making great efforts, and will continue to do so. As requested by the Chinese side, the ROK regularly dispatches purchasing missions to China and strengthens cooperation with your country in fields of inspection and quarantine to increase agricultural and aquatic imports from China. Meanwhile, the ROK is trying to reduce adjustment duties, over which China is showing much concern.

Furthermore, perhaps you would be happy to know that according to a study report issued by the KITA on February 5, 2004, trade balance between the ROK and China is very likely in 2008.

Both China and the ROK are enjoying rapid economic growth, and their economic ties are becoming closer. Can you foresee the future trend of economic exchanges and cooperation between China and the ROK?

In the 12 years since the two countries established diplomatic ties, their relations have enjoyed unprecedented prosperity. By 2003, China has become the ROK’s foremost export, investment and tourist destination and the second largest trading partner.

Leaders from the two countries agreed last year to build a “Comprehensive Cooperative Partnership.” They also reached the consensus to increase bilateral trade volume to $100 billion in five years and expand exchanges and cooperation in 10 economic projects.

Trade volume in the first two months of this year showed China has already replaced the United States as the ROK’s top trading partner. If the momentum continues, the objective of raising bilateral trade volume to $100 billion can be achieved ahead of schedule.

Table: ROK-China Trade Volume
Jan. 1-Feb.20, 2003 (Unit: $bn)
Jan. 1-Feb. 20, 2004 (Unit: $bn)
Growth rate (%)
Total trade volume
6.4
9.1
42.9
Export
3.8
5.8
55.2
Import
2.6
3.3
25.5
Balance
1.2
2.5
-

Note: ROK’s trade with the United States (January-February 2004) was $8 billion (export $4.6 billion, import $3.4 billion).

* Source: The ROK Embassy in China

At the moment, China fever is popular in the ROK and I think the tendency of ROK enterprises to develop in China will last.

According to the principle of trade liberalization, the ROK and China, both WTO members, are making joint efforts to achieve a qualitative and quantitative leap in their economic and regional cooperation. We have good reasons to believe that the prospect for bilateral economic cooperation is promising.

“ROK flow” is no longer a new phrase in Chinese cities. Fashion, cosmetics, pop music, movies and TV series from your country have made Chinese people’s lives more colorful. It is reported that “Chinese wind,” representing Chinese culture, is also well received in your country. Can you elaborate on the phenomenon of “Chinese wind?”

Just as “ROK flow” is bringing our fashionable lifestyle to the Chinese, ROK culture is also influenced by “Chinese wind,” making them pay more attention and feel more affection toward its neighbor.

FASHIONABLE: Korean garments, cosmetics and films are popular with Chinese consumers

Actually, “Chinese wind” has a long history in my country. For instance, most ROK citizens started reading Chinese literature from a young age including Heroes of the Marshes, The Romance of the Three Kingdoms and A Journey To the West, among others. We also learn Chinese philosophy, including Confucianism, at school. Thus ROK citizens are familiar with Chinese culture.

Since the two countries established diplomatic ties, especially as bilateral interflow flourishes, South Koreans have naturally caught the China fever. Among the more than 170 universities in our country, 104 have departments or majors related to China.

Nowadays, more than 35,000 ROK students are studying in China, accounting for 45 percent of all foreign students in your country. China has also become the hottest tourist destination for ROK citizens. China’s cuisine, traditional clothing and pop songs enchant those who have visited China.

“ROK flow” and “Chinese wind” are based on the cultural similarity of the two countries, and were therefore formed naturally. They will gain momentum as understanding between both countries grows in the future.

We are both trading partners and geographical neighbors. But even among households, rows are unavoidable. During the past 12 years, were there any points of conflict between China and the ROK, and if so, how were they resolved? And from past experiences, what lessons should we take to guide our bilateral relations in the future?

I think no major point of conflict has occurred between the ROK and China since diplomatic knots were tied in 1992. Our relations have enjoyed a smooth development and have been upgraded to “Comprehensive Cooperative Partnership” since last year. There might be different viewpoints on certain issues. But they are insignificant compared with the mainstream of blooming bilateral relations.

Through talks and consultations, these issues can all be successfully addressed, under the principle of mutual understanding and in consideration of the friendship between the two nations.

Just as a Korean saying goes, “Land after a rain is more solid.” By addressing our differences, the two nations can better understand each other, and engage in preventive measures to avoid negative situations. I firmly believe that friendship and cooperation between the ROK and China will definitely grow stronger in the future.