China-ROK FTA to change Asia-Pacific economy

The free trade agreement (FTA) signed between China and South Korea is expected to help Beijing negotiate more trade pacts with countries included in the "Belt and Road" initiatives, says former Chinese vice commerce minister Wei Jianguo.

Wei, who currently serves as the secretary-general of the China Center for International Economic Exchanges, said the China-South Korea FTA will boost trade between the two countries and speed up economic growth in the Asia-Pacific region.

The center forecast that the FTA will boost trade in goods in the region by over US$200 billion, while Wei expects the trade between China and South Korea to surpass that between China and Japan.

In 2014, China-South Korea trade volume stood at US$290.5 billion while that between China and Japan reached US$310.4 billion, Wei said.

The trade pact was signed at a time when South Korean exports of machinery and materials were hit by China's improved manufacturing technology and increasing domestic production, according to Guangzhou's 21st Century Business Herald.

In 2014, South Korea recorded a 0.4% decline in exports to China — the first drop in five years — as the Chinese economy posted slower growth and South Korean companies expand production in China, said the report.

The drop posed a sharp contrast after South Korea saw an 8.6% increase in exports to China back in 2013, according to South Korean government statistics.

Wei said South Korea is hoping to realize its Eurasia Initiative through China, since Beijing also proposed to better link up Asia and Europe in the Silk Road Economic Belt and the 21st Century Maritime Silk Road (Belt and Road) initiatives.

Wei added that the China-South Korea FTA is a good start for Beijing, which should negotiate more trade pacts with countries involved in the Belt and Road initiatives to export Chinese capital, technology and equipment.

Source: WantChinaTimes