South Korea's kimchi trade in a pickle

The fate of South Korea's kimchi industry rests on whether China considers it pickled or not.

When China reclassified the fermented cabbage dish several years ago, Korean exports of kimchi evaporated. As a pickled product, it did not meet China's strict import hygiene standards.

Now, China has pledged to reconsider the designation, a concession that could pave the way for a new boom in exports since the two countries sealed a broad trade deal.

The episode over kimchi, a source of deep culinary and cultural pride in South Korea, reflects the sometimes complicated relationship that China has with its neighbours. As China looks to deepen its regional trade ties, such pockets of tension could flare up, creating challenges for its ambitions.

For years, cheaper Chinese kimchi imports flowed into South Korea, undercutting local producers, who were not permitted to export to China. The subject became such a sore point that kimchi was left out of important trade talks with China for years.

To the vendors at one bustling food market in downtown Seoul, the prevalence of Chinese kimchi products is a reminder of China's reach into the lives of ordinary South Koreans.

"We cannot make much without importing things from China," said trader Chu Kwi Soon, 67, a seller of kimchi and condiments like salted and sauced octopus in the Gwangjang market.

China looms large in South Korea's economy.

It is South Korea's biggest partner, with bilateral trade totalling US$235 billion (S$325 billion), according to the most recent figures from the Korea International Trade Association. That is roughly twice the amount with the United States. And neither South Korea nor China is part of the negotiations over the Trans-Pacific Partnership, a US-led trade deal that the Obama administration has said is a way to strengthen its economic links in Asia.

China is pursuing a string of smaller pacts across Asia, using its financial heft and global influences to its advantage.

In its first major move, China signed a free-trade agreement with South Korea in June.

Under the agreement, each country will scrap tariffs on more than 90 per cent of goods, including medical equipment, electronics and kimchi, over the next 20 years. The deal is expected to increase trade between China and South Korea to US$300 billion, according to estimates from the South Korean Ministry of Trade, Industry and Energy.

President Xi Jinping of China called the deal a "monumental event". President Park Geun Hye of South Korea hailed it a "historical milestone", according to local media reports.

For South Korea's kimchi industry, it should have been a victory.

Kimchi, a pungent cabbage that, traditionally, is buried for months and carries a powerful smell, holds a special place in South Korea. Historically, it has been on the table at every meal.

Traditions are built around making it. Every year, thousands of "Yakult ladies", a group of employees from the food company Korea Yakult Corp, fills Seoul Plaza to make kimchi for a charity event.

Last November, 1,300 women dressed in red aprons slathered red chilli paste, fish sauce and garlic over each cabbage leaf in unison to a drumbeat. In 2013, the Yakult ladies broke the Guinness World Record for the number of people simultaneously making kimchi, by assembling 2,635 women.

But the producers, in factories across the country, are still reeling from a bureaucratic change in China.

By classifying kimchi as pickled goods, the Chinese government basically blocked all imports of the product from South Korea. Kimchi is fermented and has high levels of bacteria. As such, it did not pass the hygiene standards normally applied to pickled goods, which are sterilised and have low amounts of bacteria.

In a few short years, South Korea's once-growing kimchi trade with China evaporated, from hundreds of thousands of dollars of exports a year to just US$108 in 2013 and US$16,800 last year. Instead, cabbage is flowing in the opposite direction, with China now exporting hundreds of millions of dollars' worth of kimchi a year to South Korea.

"We are feeling a sense of crisis as the owners of kimchi," said South Korean politician Kim Young Rok. Other Chinese agricultural products have also undercut local business and dominated food markets and grocery stores, touching a nerve for farmers in South Korea.

In February, the Chinese government said it would revise its regulations on kimchi, in a move that was seen as a last-minute concession to South Korea. But it is not clear whether the classification has been changed, since the World Trade Organisation has not yet confirmed the new designation.

Even if the rules change, it may be difficult to reverse the damage. As cheap Chinese kimchi has flooded the market in South Korea, local producers have struggled to hold on to their business.

Some have moved their factories to China to keep costs down. Others have closed their factories. Ms Kim Soon Ja, the chief executive of Hansung Food, said she had been left with little choice but to lower the price of her kimchi products.

"We are the leaders in kimchi making," she said. "But because the material and costs are cheaper in China, there is more Chinese kimchi in Korea."

"Now, there is too much coming from China," added Ms Kim, who has three factories in South Korea.

The government is trying to preserve kimchi's cultural and historical significance, if not its economic import.

It successfully lobbied the United Nations to name kimchi to its cultural heritage list. At the World Institute of Kimchi, a research institute financed by the South Korean government, scientists have been told to "nurture and develop the kimchi industry that will boost the national growth."

Despite such efforts, kimchi is losing some of its relevance in modern South Korea. The country transitioned from an agricultural economy to a technology economy in the span of several short decades. Younger generations spend more time online - on smartphones and other gadgets - than they do at the dinner table.

Once-common family traditions like gathering to make kimchi every fall, preparing the cabbage and storing it underground in jars for months, are fading.

Today, few young South Koreans make their own kimchi. Some rarely even eat it.

Ms Park Soon Ja has had a market stall for more than 30 years. "Back then, we only had rice and we had many children. We were poor. We had limited choices.

"I grew old in this market," she said, declining to disclose her age.

Now, most of her customers are other market stall owners, tourists and the occasional housewife.

"Nobody wants to make it at home," she said. "It's a bother, and they are too busy making money."

NEW YORK TIMES

A version of this article appeared in the print edition of The Straits Times on August 10, 2015, with the headline 'South Korea's kimchi trade in a pickle'. Print Edition | Subscribe