South Korea to boost trade ties with China

South Korean President Moon Jae In (left) and Chinese President Xi Jinping shake hands at the end of a signing ceremony at the Great Hall of the People in Beijing, on Dec 14, 2017.
South Korean President Moon Jae In (left) and Chinese President Xi Jinping shake hands at the end of a signing ceremony at the Great Hall of the People in Beijing, on Dec 14, 2017. PHOTO: AFP

President Moon pledges to link economic policies to Beijing's Belt and Road project

South Korea's President Moon Jae In has pledged to link his economic policies to China's ambitious Belt and Road Initiative (BRI) as he seeks to restore bilateral ties strained by Seoul's deployment of an anti-missile system that Beijing opposed.

"I am confident a link between the Belt and Road Initiative and New North, New South policies will lead to peace and joint prosperity in the region," he told a business forum in the south-western Chinese city of Chongqing yesterday. He was referring to South Korea's new policies of expanding economic cooperation with China, Russia, Japan and Mongolia to the north and South-east Asia to the south.

Economic exchanges between the two neighbours took a heavy hit in the past year over Chinese displeasure with Seoul's deployment of an American-made anti-missile system that Beijing said undermined its security interests. Seoul says it is needed to counter Pyongyang's missile threat.

Chinese retaliatory measures, including banning group tours to South Korea and cracking down on South Korean firms in China, shaved 0.3 percentage point off its neighbour's growth this year.

Mr Moon, who came to office in May, kicked off a fence-mending state visit on Wednesday that appears to be bearing fruit.

At their summit talks on Thursday, President Xi Jinping said Mr Moon's visit was "an important opportunity to improve relations as we seek to find ways to carve a better path based on mutual respect and trust". He also welcomed South Korea's participation in the BRI.

On Friday, Mr Moon met Premier Li Keqiang who said official communications channels on trade and economics would re-open soon.

Several memoranda of understanding were signed, including one to expand their bilateral free trade agreement to include services and investments.

Mr Moon yesterday called for economic cooperation with Chong-qing, a key node of the BRI and an engine of growth for the relatively poor western region of China.

"I believe economic cooperation between South Korea and Chongqing will greatly contribute to China's development of the west, as well as balanced development of China," he told the city's party chief Chen Min'er at their meeting.

He also visited the old office of the Korean provisional government during World War II when Korea and large parts of eastern China were occupied by the Japanese. He thanked Chongqing for lending support to Korean independence fighters and preserving historical sites linked to the independence movement.

Mr Moon's visit underscored the common history of the two countries which experienced Japanese aggression in the first half of the 20th century and was his way of drawing the two countries closer, according to analysts.

On Chinese efforts to improve ties with South Korea, Professor Jia Qingguo, dean of the School of International Studies at Peking University, said the relationship was important to China, both economically and strategically. "China desires good relations with neighbouring countries and South Korea is an important neighbour."

However, he also said that once the North Korean nuclear issue eases, the anti-missile batteries will have to be removed.

•Additional reporting by Chang May Choon in Seoul

A version of this article appeared in the print edition of The Sunday Times on December 17, 2017, with the headline 'South Korea to boost trade ties with China'. Print Edition | Subscribe