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Nation's strong growth to aid ROK
Date:2011/1/24      View:1189
China's stable economic growth will continue to be a major driving force for growth in the Republic of Korea (ROK) in 2011 and China's trade deficit with the country will be sustained over the coming years, said Yu Woo-ik, the ROK's ambassador to China.

Because of limited domestic demand, trade is the most important engine for the ROK's economic growth, and frequent trade activity with China has been a major driving force for the country's economic recovery, Yu said in an exclusive interview with China Daily.

China's trade deficit with the ROK jumped to a record $70 billion in 2010 with bilateral trade surpassing $200 billion, up 32.6 percent year-on-year, according to Chinese customs statistics.

Chinese imports from the ROK accounted for one quarter of the latter's total and "intermediate" goods, such as LCD panels, semiconductors, synthetic resin, and components for mobile phone and cars ranked as the top five in its export list to China.

Exports of LCD panels hit $18 billion and semiconductors to China accounted for $14.7 billion in 2010, said Yu.

These intermediate goods are imported for assembly in China and a large number of the finished products are exported to other countries, both by multinational and domestic firms.

Yu said the governments and companies of both countries could expand technical development and standardization cooperation in the emerging industries, including new materials and new energy.

Meanwhile, Yu said the ROK welcomes more investment from China as more Chinese companies step up overseas investment.

However, Chinese investment into the country remains relatively low.

Analysts said more Chinese companies might become interested in investing in the ROK, as the two nations are currently involved in Free Trade Agreement (FTA) negotiations.

"If the ongoing discussions on the FTA move forward smoothly, the economic ties between the two countries will enjoy more prosperity," the ambassador said, adding that he will make the "utmost effort" to promote bilateral economic cooperation.

Investment from the ROK in China in 2010 was $43 billion, much higher than China's $3 billion investment in the ROK he said.

Chinese companies are welcomed in the ROK and they have potential to invest in finance, tourism, real-estate development, renewable-energy sources, and the manufacturing sectors, Yu said.

To attract investment from Chinese companies, the ROK launched a China Desk last year, which has branches in Seoul and Shanghai.

The China Desk aims to provide Chinese investors with up-to-date information and match them with suitable projects.

Leaders of the two countries have set a bilateral trade target of $200 billion by 2012 and $300 billion by 2015.

"Although the figures look very optimistic, I think we can achieve the target," said Yu.

ROK companies in China will move up the ladder from the traditional labor-intensive industries to capital and technology-intensive industries, he said.

Meanwhile, the ROK will expand investment in western areas such as Chengdu, to take advantage of China's implementation of the "Western Development strategy", Counselor Kang Do-ho said in a recent interview.
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