The Korea International Trade Association (KITA) announced on May 11 that Korea’s investment in China reached US$1.62 billion in the first quarter of this year, to be second only to Hong Kong. Korea is expected to overtake Japan and follow the United States as a runner-up in terms of the size of trade with China as well.
According to KITA, Japan’s investment in China added up to US$1.06 billion in the same period, while Singapore, Taiwan, and the United States recorded US$1.23 billion, US$1.29 billion, and US$620 million, respectively.
The rapid rise in investment in China can be attributed to the cooperative atmosphere between the Korean and Chinese governments ahead of the ratification of the Korea-China FTA scheduled for this year.
In addition, Korea is estimated to have become China’s second-largest trade partner in the first quarter of 2015 by catching up with Japan for the first time.
The U.S. and Japan have long been the two largest trade partners for China. In 2013, Korea’s monthly average volume of trade with China was approximately US$3.2 billion short of that between China and Japan. However, the gap was narrowed to US$1.7 billion last year, and to less than US$700 million during the first four months of this year.