Business / Economy

Free trade pact cements foundation of China-ROK ties

(Xinhua) Updated: 2015-06-02 17:14

BEIJING -- The signing of a free trade agreement between China and the Republic of Korea (ROK) in Seoul on Monday has given another boost to bilateral ties, which are at a historical high.

Under the accord, ROK will eliminate tariffs on 92 percent of all products from China within 20 years while China will abolish tariffs on 91 percent of all ROK goods.

The pact is the fruit of more than a dozen rounds of negotiations between the two countries since May 2012 and the high-level exchanges between the two nations.

ROK President Park Geun-hye paid a visit to China in June 2013 while Chinese President Xi Jinping visited ROK last July.

In addition to providing a further boost to the government relations, the FTA brings an institutional platform for the two Asian neighbors to strengthen their bilateral strategic cooperative partnership .

The pact, which is the largest bilateral free trade deal for China in terms of trade volume, marks the biggest leap forward in bilateral trade since the two began diplomatic relations in 1992.

In recent years, bilateral trade volume has expanded remarkably. Trade between China and ROK hit 235.4 billion U.S. dollars in 2014, posting an increase of 2.8 percent from the year before. China is ROK's No.1 trading partner while ROK is China's third-largest trade partner.

The FTA covers 17 areas, including trade in goods, services, e-commerce and government procurement. As the two nations strive to upgrade bilateral trade volume to $300 billion in 2015, the agreement means a new growth engine will be in place.

Stimulated by burgeoning economic and trade ties, people-to-people exchanges are also expected to increase.

In 2013, more than 8.2 million trips were made between China and ROK. In July 2014, some 62,000 ROK students were studying in China and about 65,000 Chinese students were studying in ROK.

The accord is a milestone as it indicates the two are considering bilateral ties from a strategic and long-term perspective.

Once it is implemented, the effects will go beyond bilateral.

With a combined population of about 1.4 billion and a combined gross domestic product (GDP) of over $11.4 trillion, the pact will not only bring benefits to the two neighbors but also contribute to regional and world economic development.

In this sense, the pact has sent positive signals for economic cooperation in East Asia and Asia-Pacific, especially when China, Japan and ROK are conducting negotiations on a trilateral free trade zone.

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