Is The Common Market Of China And ROK Going Step By Step?

It is reported that the signing of the FTA will bring huge economic benefits to China and South Korea.

It is estimated that the FTA between China and South Korea is expected to help the bilateral trade volume exceed 300 billion US dollars.

Some studies believe that once the FTA is completed, it is expected to contribute 1 to 2 percentage points to China's GDP growth, while South Korea's GDP will increase by 2% to 3%.

At that time, a common market with a population of 1 billion 350 million and a GDP of US $11 trillion will be formed between China and Korea.

In the next 10 to 20 years, household appliances, fashion and cosmetics from Korea may enter a large number of Chinese ordinary households. Korean consumers are also expected to buy cheaper and more diversified Chinese agricultural products in their country.

In June 1st this year, China and South Korea formally signed the free trade agreement (FTA), not only allowing consumers of both countries to get visible tariff benefits in the future, but also have a common understanding in the two countries' efforts to promote their respective domestic economic growth.

According to the development and research center of the State Council, the Sino Korean FTA will stimulate China's actual GDP growth by 0.34 percentage points, stimulating the actual GDP growth of Korea by 0.97 percentage points.

According to the Yonhap news agency, the South Korean government predicted that the entry into force of FTA will increase 0.96 percentage points of the gross domestic product in the next 10 years, and the consumer will receive 14 billion 600 million dollars.

FTA between China and South Korea is a win-win situation to a large extent.

External analysis, as China's hitherto signed free trade agreement with the highest level and the largest amount of trade involving any country, is regarded as an important demonstration by FTA.

In the long run, this will help promote the signing of similar trade agreements with other trading partners.

For the economically depressed South Korea, signing free trade agreements with China, the largest trading partner, will become an important opportunity to promote its economic development.

Recently, the International Financial Daily reporter learned that, in the formal signing of the agreement, South Korea's trade promotion agencies in China frequently acted to strengthen the FTA policy propaganda to Korean domestic enterprises.

"China and South Korea FTA have promoted the possibility of cooperation between China and South Korea for joint development of technology, joint investment and the strengthening of the global industrial value chain."

A South Korean Trade Promotion Agency said that.

Is the "common market of China and ROK" approaching 1 billion 400 million dollars with a GDP of nearly 12 trillion?

90% zero tariff on commodities

Public information shows that the concept of China Korea free trade agreement was first put forward in 2004, but it did not start the first round of negotiations until May 2012 8 years later.

In November 2014, substantive negotiations between the two sides ended.

It is understood that the biggest difference between the two countries is the liberalization of trade in goods and the opening of the service trade market.

On the following day when China and South Korea formally signed the FTA in June 1st this year, Shen Danyang, spokesman of the Ministry of Commerce, said: "in terms of trade in goods, China will eventually cancel 91% of its products to South Korea, covering 85% of its imports.

At the same time, South Korea will eventually have 92% of its products to cancel tariffs on China, covering 91% of China's imports.

The proportion of openness is, in the eyes of some experts, the result of "compromise" between the two sides.

Shi Yuanhua, director of the Korea Korea Research Center at Fudan University, said that according to his understanding, "the Chinese side is considering more factors."

China and the international economy are not as well suited as South Korea, and the degree of demand has been even lower.

The ratio of 90% should be the result of compromise.

Although the opening proportion of 90% is different from that of the US Korea Free Trade Agreement and the open proportion of nearly 99% of Korea and EU FTA, compared with the FTA signed by China before, the level of opening up has been relatively high.

From a single country trade volume, China and South Korea's trade volume of nearly $300 billion a year makes the Sino Korean FTA agreement quite "weighing".

Shen Danyang, a spokesman for the Ministry of Commerce, said that China's important commodities such as textile, clothing, nonferrous metals, iron and steel, machinery and equipment can further reduce the cost of export to Korea, and Korean machinery and equipment, chemical industry, liquid crystal display and other industries can also better share China's business opportunities.

At the ordinary consumer level, it is understood that some popular products from Korea, such as household appliances, daily chemicals, Korean specialty foods, clothing, shoes and hats, will be cheaper, for example,

The tariff will be reduced to zero in the next 10 years from the current 15%.

For Korean consumers, it will also be able to buy products, clothing and footwear made in China at more favorable prices.

For example, some aquatic products such as fish, cold water shrimps and shrimps, which are currently subject to 10%-20% tariffs, will achieve zero tariffs in 5-20 years, while the tariffs on pineapple and pears will drop to 30% in 15-20 years.

In addition, China and South Korea have reached a lot of consensus on trade in services and investment.

Among them, China has mainly solved the important interests of Korea in the 6 departments of law, architecture and related engineering, environment, entertainment, sports and other entertainment and securities.

The South Korea mainly solved the important interests of China in the express delivery service and construction services, and made a commitment that exceeded all the existing FTA level.

It is worth mentioning that although the FTA between China and South Korea covers "91% commodities imported from China" and "92% goods imported from China by South Korea", some commodities are excluded.

Such as rice, beef, pork, cars, display panels and so on.

South Korea's "East Asian daily" reported that excluding the above products reduced the worries of the two enterprises and alleviated the impact on their respective markets.

Mei Xinyu, a researcher at the Ministry of Commerce and international trade and Economic Cooperation Research Institute, believes that the reason why China and South Korea's FTA is "reserved" is that the industrial competition between China and South Korea is still relatively strong, while the strong domestic trade protectionism in South Korea, especially its agricultural interest groups and trade unions, is strong.

"If the opening goal is too high at the beginning, it will be difficult to achieve, but may delay everything."

Korea wants to consolidate its advantages in China

In the final document of the China South Korea FTA, excluding some industries that the two sides believe is more sensitive, will undoubtedly help reduce the resistance from their respective domestic industries.

In fact, the current agreement has been widely welcomed in Korea.

The FTA between China and South Korea is believed to further open the door to trade and investment between the two countries.

Statistics show that the trade volume between the two countries reached 274 billion US dollars in 2014.

At present, China is Korea's largest foreign investment destination and export market, and is also Korea's largest trading partner.

At the same time, Korea maintained a huge surplus in bilateral trade, with a surplus of nearly US $100 billion in 2013 alone.

Mei Xin Yu told the international finance daily that for the Republic of Korea, the FTA between China and South Korea is of great significance for South Korea to consolidate its position in the Chinese market in the long run.

Zheng Zhenyu, director of the Ministry of general affairs of the Korea trade and Investment Promotion Agency (KOTRA) at the China trade Museum, told the International Financial Daily that most of the enterprises in South Korea welcomed the signing of FTA between China and South Korea, and believed that this would help to reduce the threshold for Korean Enterprises to invest in China.

KOTRA is one of Korea's largest overseas trade networks. In 2000, it established 101 Korean trade houses around the world.

One of its main businesses is to convene various export enterprises in South Korea and form a market development group to conduct business negotiations overseas.

Zheng Zhenyu said that after the signing of FTA between China and South Korea, KOTRA launched a series of publicity activities in China and South Korea.

"We have opened the Korea China free trade agreement operation support center in Beijing, Shanghai, Chengdu and Qingdao, providing information for FTA and providing substantive support services to enterprises in need."

Zheng Zhenyu said that China and South Korea FTA are not confined to commodity circulation.

It also provides a variety of cooperation platforms for economic exchanges between the two countries. The two countries will enjoy quasi national treatment from all fields.

For South Korean enterprises, the FTA not only reduces the investment threshold for China, but also means that the two sides will make more convenient cooperation in technology and capital in the future.

An obvious advantage is cooperation in the global industrial chain.

"China is striving to raise the level of manufacturing and develop the service industry, while South Korea is looking for medium and long-term economic growth momentum.

China and South Korea FTA will improve bilateral economic and trade cooperation and push them to achieve their goals at an early date. "

Zheng Zhenyu said.

Favorable layout of China's foreign trade

From the surface data, the current Korean dependence on the Chinese market is stronger, and more favorable conditions are obtained from China and South Korea FTA.

South Korea's East Asia Daily reported earlier that China and South Korea FTA led Korea to open a huge domestic demand market with a population of about 1 billion 400 million yuan, or 27 trillion yuan.

Although China and South Korea FTA will help Korea further expand its exports to China.

However, Shi Yuanhua, director of the Korea Korea Research Center at Fudan University, can not ignore that the agreement is also conducive to expanding China's export to South Korea.

Shi Yuanhua said, "there is also some analysis in South Korea that China and South Korea FTA are more conducive to China. In my view, this helps to narrow the huge trade deficit between the two countries and make the two countries trade healthier."

He believes that despite the existence of competition between China and South Korea, the complementarity is still strong.

FTA is undoubtedly a win-win situation.

This is not only reflected in balancing trade between the two countries, but also has special economic and strategic significance for China.

After the signing of the FTA between China and South Korea, the FTA, the Korea Japan FTA and the China Japan Korea FTA will accelerate.

Shi Yuanhua believes that in the larger goal, the demonstration effect of FTA between China and South Korea is also applicable to the strategy of "one belt and one road".

"Although the major goals of the Asia Pacific Free Trade Zone have been put forward, it is still very far away from the real realization.

At present, it is best for China to break down one by one, and negotiate with the countries along the belt and road.

Korea can be the best model. "

Shi Yuanhua explained further.

Mei Xin Yu believes that for China, the greatest significance of FTA in China and South Korea lies in its position in the strategy of regional economic integration in China.

He summed up the strategy of regional economic integration in China as a concentric circle strategy.

The core of this strategy is the mainland China, together with Hong Kong, Macao and Taiwan, and China's ASEAN Free Trade Area as well as the free trade area between China and Japan and Korea. The outer edge is APEC (APEC).

In the future, RCEP (regional comprehensive economic partnership) may take the place of the second circle, and the Asia Pacific Free Trade Area and APEC become the outer edge of the third circle.

"China and South Korea FTA can not only stabilize the Northeast Asian economy, but also have a certain exemplary role for Japan, so as to promote the accelerated process of the FTA between China, Japan and South Korea."

Mei Xin Yu added that "East Asian regional economic integration is divided into North and South wings. The process of ASEAN integration between China and the south wing is much faster than that of the north wing. The success of the Sino Korean FTA negotiations will help to ease the imbalance between China and South East Asian regional economic integration."

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