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China eyes bigger investment in South Korea

China eyes bigger investment in South Korea

Updated: 2012-04-14 07:45

By Ding Qingfen (China Daily)

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A high-level Chinese delegation is due to arrive in South Korea over the weekend to discuss Chinese investment in its neighbor's culture, real estate and new energy industries.

Wei Jianguo, a former deputy commerce minister, said the governments of China and South Korea are pushing forward negotiations on a bilateral free trade agreement, which is due to be launched in the first half of this year.

"We expect to enhance Chinese investment in South Korea," said Wei, head of the Chinese delegation to the China-South Korea investment cooperation forum due to be held in Seoul on Tuesday and Wednesday.

The 80-strong delegation includes former vice-premier Zeng Peiyan and well-known economist Wu Jinglian, as well as investment-promotion officials.

On the South Korean side, the forum will be attended by representatives of more than 600 South Korean companies, led by the Korea Trade-Investment Promotion Agency.

"We are targeting promoting Chinese investment in the culture and property sectors, as well as ... new energy and environmental protection," said Wei, secretary-general of the China Center for International Economic Exchanges.

South Korean statistics showed China's investment in its neighbor was $3 billion last year, and was mainly in the tourism and entertainment industries. South Korean investment in China reached $36 billion in 2011.

"There is huge potential for Chinese companies to seek business opportunities in South Korea, as the industries are highly complementary," said Wei.

China is South Korea's largest trade partner, and a major destination for South Korean investment.

South Korea's Ministry of Knowledge Economy said the nation's FDI in the first quarter surged 17 percent year-on-year to a record high of $2.35 billion, with Japan being the biggest source of investment.

South Korea, whose economy has long been driven by foreign trade, plans to expand domestic consumption and create jobs to stimulate the economy.

The nation also reportedly plans to invest $963 million in 19 research and development projects to develop the energy sector this year.

"China and South Korea can cooperate in many sectors, and culture in particular," said Xia Youfu, a senior professor of economics at the University of International Business and Economics in Beijing.

But "we also have to be cautious about the government restrictions and public opposition".

In late March, China, Japan and South Korea signed a trilateral agreement to protect and promote investment among the three nations, after five years of negotiations. The agreement will also promote bilateral investment between South Korea and China, said experts.

Bilateral FTA

As there still exist differences among the three countries on details of the trilateral FTA talks, "China and South Korea are actively promoting the bilateral FTA", and the talks will probably start very soon, said Wei.

In May, the leaders of China, Japan and South Korea will meet in Beijing.

Park Jin-hyung, executive vice-president for China of the South Korean trade promotion agency, told China Daily that negotiations on the FTA between China and South Korea will probably precede a planned China-Japan-South Korea FTA, citing the strong interest from both sides.

While the United States is promoting the Trans-Pacific Partnership to remove trade and investment barriers among nine countries including Australia and Vietnam, China is working toward a free trade agreement with Japan and South Korea and is promoting Asian economic integration.

China and South Korea are not included in the TPP.

dingqingfen@chinadaily.com.cn