GT Voice: Why Are Deeper China-SK Trade Ties Crucial for Asian Economic Co-op?

By Global Times

Apr 15, 2025 11:40 PM

Illustration: Chen Xia/GT

As Asia emerges as a new highland in global cooperation and development despite rising trade protectionism from the US, the further upgrading of the China-South Korea Free Trade Agreement (FTA) is undoubtedly a vital part of this process, carrying profound implications for not only the regional industrial chain but also market integration and expansion.

The 11th round of negotiations for the second phase of the China-South Korea FTA is being held in Beijing from Tuesday to Friday, according to South Korea's Ministry of Trade, Industry and Energy, the Yonhap News Agency reported.

During the negotiations, both sides plan to coordinate the draft agreements in the three major areas of services trade, investment and financial operations, and conduct consultations on market access, the report said.

Against the backdrop of global supply chain restructuring and geopolitical uncertainties, this development, which follows the 10th round of negotiations in January, represents valued progress in terms of promoting Asian economic integration and free trade against the background of the current trade chaos.

The Asian region's status in the global economic landscape is steadily rising, a trend evident in its significant influence on traditional goods trade and its immense growth potential in emerging sectors such as services trade and the digital economy. 

In this context, the significance of the China-South Korea FTA upgrade apparently extends beyond traditional trade in goods. While the Regional Comprehensive Economic Partnership (RCEP) aims to eliminate tariffs on more than 90 percent of goods traded within the region, in light of Asia's rapid economic growth, there is a pressing need for more advanced rules regarding emerging issues such as trade in services, the digital economy and intellectual property. So the in-depth discussions surrounding the second phase of China-South Korea FTA negotiations in these areas will serve as a valuable reference for shaping the "next generation of trade rules" in Asia.

Moreover, from an industry perspective, the upgraded FTA promises to enhance supply chain stability between two manufacturing powerhouses. As important manufacturing and innovation centers in Asia, China and South Korea have maintained close cooperation in electronics, vehicles and other fields for many years. 

In view of many uncertainties in the global supply chain, the upgrading of the China-South Korea FTA can provide a more stable and predictable trade environment for businesses from the two countries. 

Both sides could further reduce trade barriers, promote the coordinated development of the upstream and downstream industrial chain, and improve overall industrial competitiveness. This deep integration of the industrial chain will not only help Chinese and South Korean companies reduce production costs and improve production efficiency, but also enhance the position of the Asian industrial chain in the global value chain.

More importantly, market expansion is another core area of significance of the China-South Korea FTA upgrade, which has the potential to be an important factor in promoting Asian free trade to a higher level. 

US tariffs have triggered global trade turmoil, and Asia, as an important global manufacturing base and trade area, has been particularly affected. In this context, how to develop the regional market to foster new demand is a key in tackling the current situation. 

If a breakthrough could be achieved under the second phase of the China-South Korea FTA, it will lay the foundation for the establishment of the China-Japan-South Korea FTA, the deepening of the ASEAN plus China, Japan and South Korea (ASEAN+3) cooperation framework, and the promotion of the RCEP, which will ultimately contribute to the formation of an Asian big market.

According to the Asian Economic Outlook and Integration Progress Annual Report 2025 released in Boao last month, Asian economies were 56.3 percent dependent on intraregional trade in 2023, and ASEAN and China were well established as the central players in Asian trade in goods. This situation fully demonstrates the close trade ties and huge potential of the intra-Asian market.

With the upgrading of the China-South Korea FTA and progress of other multilateral economic cooperation mechanisms within the region, Asian economies have the potential to make the transition from Western export-led growth to intraregional demand-led growth, building more resilient economic structures. This will strengthen the endogenous power and resilience of the Asian economy, providing strong support for Asia's voice and influence in the global economic landscape and making the pace of free trade in Asia faster.