China, Japan, ROK need to finalize trilateral FTA

China has signed 22 free trade agreements with 29 countries and regions, with 10 more being in the negotiation stage and eight under study, while Japan has signed 21 FTAs, in effect, with one each with South Korea and Canada on hold, and South Korea has inked 21 FTAs, in effect, with 59 countries, with two ratified and nine in the negotiation stage.

China, Japan and South Korea have established a network of free trade areas, continuously extending the reach of their FTAs. The coverage of their FTAs has been increasing, with the three countries boasting increasingly widening free trade areas. Amid all this, the Regional Comprehensive Economic Partnership agreement provides more room for higher-level tariff reduction, especially if China, Japan and South Korea conclude their free trade agreement, which is under negotiation.

By leveraging the institutional benefits of the RCEP, the three countries can create an "RCEP+China-Japan-South Korea" free trade area, which would further boost trade, help build political mutual trust and promote the common development of the three countries.

Liu Wen, a professor at the School of Business, Shandong University

Disputes should be resolved through talks

Thanks to the imbalanced China-South Korea trade and economic cooperation structure, competition is becoming increasingly evident. Since the establishment of diplomatic relations between China and South Korea in August 1992, South Korea had been enjoying a trade surplus with China. But the trend reversed in May 2022, and now the ROK has a trade deficit with China — and the new trend may continue.

With the technological gap between China and South Korea continuing to narrow, the competition between the two countries in technology and products is becoming more pronounced. South Korea's import of products from China, including chemical materials, semiconductors and automobile components — sectors in which South Korea previously enjoyed absolute advantage — has been growing.

Even investments between China and South Korea are unbalanced, with Chinese investment in South Korea facing restrictions, while the China-South Korea economic structure is transitioning from a complementary economic structure characterized by a vertical division of labor to one with a horizontal division of labor.

China-South Korea economic and trade relations today are marked by both competition and cooperation, with the momentum of economic cooperation being increasingly influenced by the two sides' overall political relations. So efforts should be made to first improve China-South Korea political ties, possibly through cooperation in various fields.

Issues and disputes that have arisen in the course of the past 32 years of China-South Korea relations have been resolved or reasonably managed by the two sides. As for some sensitive issues that remain unresolved, these should be addressed by the two sides through dialogue and negotiation. And the issues that cannot be resolved in the short term should be properly managed.

Li Chengri, a research fellow at Chinese Academy of Social Sciences