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Relations Between China and South Korea: The Economic Aspects

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Having scrutinized the political aspect of relations between the PRC and the ROK, let us briefly examine the economy’s state of affairs.

First, a few general numbers. Over 28 years of diplomatic relations, trade between the two countries has grown 40 times, and in 2019 amounted to $ 243 billion 400 million.

In the first seven months of 2020, China accounted for 24.3% of South Korean exports, up 1.5% from a year earlier, according to a report from the Federation of Korean Industries. The increase came despite a 10.6% drop in South Korea’s total overseas shipments following the coronavirus outbreak.

Over the same period, South Korea’s exports to the European Union, Central and South America, and India declined by 11.5%, 34.3%, and 34.5%, respectively. In contrast, exports to China rose 9.7% in June after contracting 2.5% in May, the first positive growth in six months.

China’s direct investment in South Korea grew by about 2.6 times year-on-year to $ 856 million in January-June, while China’s share of total FDI in South Korea rose to 11.2% in the first half of the year from 3 % a year earlier. After the coronavirus pandemic, total FDI in South Korea fell by 22.4% to $ 7.66 billion on a year-on-year basis.

The main achievement of spring-autumn 2020 was that from May 1, 2020, China and South Korea reached an agreement to open a “fast track” for business travelers. The program will be extended to representatives of business, logistics, industrial production, and technical services. Chinese businessmen will travel throughout South Korea, while their Korean partners will visit 10 Chinese provinces and cities, including Chongqing, Shanghai, and Tianjin. Naturally, after passing the tests, both those and other businessmen will be exempt from the mandatory 14-day quarantine.

After that, China agreed to renew work and study visas to South Korean citizens and entry visas for those with a residence permit. Now about 70,000 South Koreans who have been unable to resume their studies or return to their jobs in China due to COVID-19 will be able to do so. Visa applicants must submit a certificate confirming a negative COVID-19 test result five days before boarding. Upon arrival in China, they face a 14-day quarantine.

Since August 10, South Korea has lifted........

© New Eastern Outlook

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