In a bid to overhaul their economic relationship, China and South Korea are reviving long-stalled trade talks, with an eye on moving beyond factory floors to target the lucrative services sector as geopolitical shifts redraw the region’s alliances.
The thaw follows a December 12 agreement between Minister of Commerce Wang Wentao and South Korean Minister of Trade, Industry and Energy Kim Jung-kwan to accelerate negotiations on the second phase of their free-trade agreement (FTA). The push aims to expand cooperation in services, investment and finance after years of stagnation.
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“The current Lee Jae-myung [presidential] administration is pursuing pragmatic diplomacy, which has become a turning point for improving relations and strengthening cooperation,” said Lee Chi-hun, general director at the Korea Centre for International Finance. “What was difficult to achieve through a bottom-up approach may now be possible through a top-down process.”
The two nations signed the first-stage FTA in December 2015, pledging to broaden talks. However, progress stalled due to differences over the scope of market liberalisation and conflicting economic interests.
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Tensions deepened after Seoul deployed the US Terminal High Altitude Area Defence (THAAD) system in 2017. Beijing’s opposition to the missile shield triggered an unofficial ban on South Korean entertainment.
