Diplmacy
“Korea considers its relationship with China important,” Korean Vice Prime Minister and Minister of Strategy and Finance Choo Kyung-ho said at a plenary session of the National Assembly’s Planning and Finance Committee, when asked about the impacts of the Korean government’s focus on the United States on Korea’s exports to China by Rep. Yang Ki-dae of the Democratic Party of Korea on May 22. “I want to make it clear that we have never declared a decoupling with China and have no intention of doing so.”
“As I have always said, China is Korea’s No. 1 trading partner,” Chu said, explaining that Korea strengthening ties with the United States should not be interpreted as Korea turning away from China.
“After coming back from the Group of Seven (G7) financial ministers meeting last week, I also met with the Chinese ambassador to Korea and asked him to start working on preparations for a Korea-China economic ministers meeting,” he said. “I also conveyed to him that even though Korea will host the meeting this time, if it is impossible to do so, I will to go to China.”
Choo explained that the recent growth of Korea’s deficit in trade with China is a continuation of a decadeslong trend. “Korea’s deficit has been on the uptick by US$15 billion to US$20 billion nearly every two years,” Chu said, “It was partly due to China’s economic slowdown in the short term, but also due to the strengthening of China’s industrial competitiveness and Chinese consumers’ preference for domestic goods.”
“The biggest reason for the decline in Korea’s exports to China is that Chinese companies are producing intermediate goods that are replacing Korea’s exports to China,” said Bank of Korea Governor Rhee Chang-yong. “Korea needs to sharpen its competitiveness as the benefits of an exports-to-China boom over the past decade have disappeared.”