SEOUL (AFP) - China and South Korea agreed at summit talks Thursday to seek the early launch of a market to directly trade their currencies and complete free trade negotiations by the end of the year.
The agreement was contained in a joint communique endorsed by South Korean President Park Geun-Hye and her Chinese counterpart Xi Jinping at the end of their talks in Seoul.
The two leaders agreed to step up efforts for the completion of negotiations on a "comprehensive" free trade agreement (FTA) by the end of this year, the communique said.
The major Asian economies began FTA negotiations in 2012 but progress has been delayed by differences on the extent of market opening.
China is currently South Korea's largest export market and two-way trade stood at around US$275 billion (S$342 billion) last year.
The joint communique said the two countries would strengthen efforts to launch direct trading in the won and the yuan.
Financial officials in Seoul believe such a market will help South Korea respond to the yuan's recent internationalisation, diversify settlement currencies and reduce its heavy reliance on the greenback.
A memorandum of understanding sealed by the central banks of the two countries called for designation of a qualified bank as a renminbi clearing bank.
China agreed to give South Korea Renminbi Qualified Foreign Institutional Investors status, allowing it to invest about 80 billion yuan (S$16 billion) in Chinese stocks.