China, South Korea mull trade talks

WARINESS::South Korean President Lee Myung-bak is expected to press China not to support North Korea in the face of military provocations, leveraging the South’s trade

Reuters, BEIJING

Tue, Jan 10, 2012 - Page 5

China will offer visiting South Korean President Lee Myung-bak the prospect of launching trade pact negotiations in the coming months, Chinese state-run media said yesterday, holding out closer economic ties as a means to narrow political distrust.

Lee arrived in Beijing yesterday for talks with Chinese President Hu Jintao (胡錦濤) and other leaders, and the China Daily said the two sides were looking to start negotiations for a three-way free-trade agreement including Japan, and a separate two-way China-South Korea trade agreement.

An unnamed source from the Chinese Ministry of Commerce told the paper that the bilateral trade pact talks “will probably start in the first half of the year.”

Beijing has faced growing wariness from neighbors over its military modernization and strategic intentions, especially over North Korea, which is sure to feature on Lee’s agenda. The trade negotiations could offer an example of China using the prospect of greater access to its markets and investment to counter such distrust, an official Chinese newspaper suggested.

“Particularly with China’s rapid development altering the relative balance of power between the two sides, problems have arisen in Chinese-South Korean relations that need urgent attention,” said the overseas edition of the People’s Daily, the official paper of the -Chinese Communist Party.

“Above all there is the problem of mutual political trust,” said a front-page commentary in the paper by Zhang Liangui (張蓮桂), a prominent Chinese expert on Korean affairs.

Although Beijing and Seoul share broad aims on the divided Korean Peninsula, Zhang said, “their different interests and positions have produced a negative impact on bilateral relations.”

Lee is likely to press China to lean on its ally North Korea to exercise restraint after the death last month of long-time North Korean leader Kim Jong-il, who was succeeded by his untested and largely unknown youngest son, Kim Jong-un.

Some analysts have speculated that the young Kim may order a “provocation,” such as a small-scale military attack or nuclear or missile test, to burnish a hardline image with the North’s powerful military, whose support is crucial to him.

China is the North’s sole major ally and economic partner, and it has repeatedly voiced confidence in Kim Jong-un while also urging regional restraint and stability.

South Korean Ambassador to China Lee Kyu-hyung recently said that Seoul would continue to raise the issue of China’s unwillingness to condemn North Korea when it provokes the South.

Despite Beijing’s political support for North Korea, Chinese economic ties with South Korea are much larger.

In the first 11 months of last year, China’s trade with the South was worth US$224.8 billion, a rise of 19.5 percent on the same months in 2010, according to -Chinese -customs data.

China’s trade with North Korea was worth US$5.2 billion in the first 11 months of last year.

Since 2008, South Korea and China have conducted joint studies on their possible free-trade deal.

Talks on the three-way China-Japan-South Korea trade agreement could start as early as May, the China Daily said, citing the unnamed commerce official.