Photo: Yoon Suk-yeol (right) shakes hands with Chinese prime minister Li Qiang. Credit: Office of the President.
For all the talk of decoupling, China remains one of South Korea’s most important economic partners. Even Yoon Suk-yeol 윤석열, who pushed for improved relations with Japan in an attempt to promote trilateral cooperation between US, Japan and South Korea, has given in to this reality, as seen most recently in his May 27 agreement with Chinese prime minister Li Qiang to pursue an expansion of the free trade agreement (FTA) between the two countries.
South Korea and China have had an FTA since 2015. That agreement, signed by the Park Geun-hye 박근혜 administration, focused primarily on the sale of goods - making it relatively limited compared to the scope of South Korea’s FTA with the United States, which also includes service industries and capital investments. A subsequent round of trade talks between Seoul and Beijing about further expanding the FTA was suspended in 2017, after China responded to the US deployment of THAAD missile batteries in South Korea with economic sanctions.
Yoon and Li agreed last week to resume the dialogue. An expanded FTA would include service industries such as pop culture products, tourism, and medical offices and law firms. Seoul and Beijing also agreed to re-open the bilateral Investment Cooperation Committee 투자협력위원회, which has been inactive for 13 years, to promote capital investments.
