China, S. Korea agree to deepen economic cooperation at ministerial meeting

The 17th South Korea-China Meeting on Economic Cooperation will be held virtually on August 27, 2022. Photo: NDRC official website

China and South Korea signed a memorandum of understanding on supply chains and agreed to further boost economic cooperation at a ministerial meeting, which experts say benefits the stable bilateral ties highlighted during the 30th anniversary of the establishment of diplomatic ties and showed that Seoul was keen to maintain mutual trust with Beijing ahead of its possible joining of a US-led semiconductor alliance believed to target China.

The MoU was signed during the 17th South Korea-China meeting on economic cooperation held virtually between He Lifeng, head of the National Development and Reform Commission (NDRC), the main planner Economy of China, and Choo Kyung-ho, Minister of Finance of South Korea. Saturday.

During the meeting, the two sides agreed to strengthen cooperation in the industrial chain and supply chain, and strengthen policy exchanges on peak carbon dioxide emissions and carbon neutrality, according to a statement. released on Saturday by the NDRC.

As part of the MoU, a new director-level entity on supply chains is expected to be established between the two countries, with the aim of discussing related issues in the event of supply disruptions and enhancing consultations. policies, Yonhap news agency reported, citing Seoul’s finance ministry.

This is the first such memorandum of understanding signed by the two countries, he reported.

The two sides also agreed to deepen cooperation on key projects in the third market and pledged to foster new growth areas in bilateral cooperation and take the strategic cooperative partnership to a new level under the framework of the China-Korea economic ministerial meeting mechanism, according to the NDRC statement. .

The experts said the fruitful outcome of Saturday’s meeting, especially the signing of the first memorandum of understanding on supply chain cooperation, is beneficial to the steady development of bilateral economic relations amid the complex international situation of today and show that Seoul wants to maintain mutual trust with Beijing ahead of its potential joining of a US-led semiconductor alliance known as ‘Chip 4’, which is widely seen as another geopolitical ploy of the United States against China.

Dong Xiangrong, a senior fellow at the Chinese Academy of Social Sciences’ National Institute for International Strategy, told the Global Times on Sunday that the deals mean China and South Korea have high expectations for stable supply chains – the South Korea needs a stable Chinese market to export its key products, and China also needs South Korea for its industrial development.

The signing of the first memorandum of understanding on supply chain cooperation and the establishment of the new leadership group in this area are of great practical importance in order to accelerate the treatment of emerging incidents, such as disruptions in the supply chain in various fields between the two countries during the pandemic, Dong said.

According to media reports, South Korea had previously suffered from a shortage of urea water solution, a raw material used in reducing vehicle emissions, as China tightened urea exports, which had sparked panic buying among South Korean drivers.

South Korea has decided to join a preliminary meeting of the “Chip 4”, a planned alliance in the field of semiconductors involving the United States, South Korea, Japan and the Chinese island of Taiwan . The meeting is expected to take place in late August or early September, Yonhap News Agency reported.

“Through Saturday’s memorandum of understanding, Seoul has shown its willingness to maintain mutual trust and consistent cooperation with Beijing in industrial chains and supply chains in the face of pressure from the United States on the part of China. ‘Chip 4’,” said Da Zhigang, director of the Northeast Asia Institute. Studies at the Heilongjiang Provincial Academy of Social Sciences, the Global Times said on Sunday.

Da noted that South Korea is still trying to strike a balance between its US ally and China – a major chip trading partner that accounted for 60% of the country’s chip exports in 2021 alone, to maximize its own interests.

“While the latest agreements hold great promise for cementing bilateral cooperation in supply chains and appear to assure China that there are no misunderstandings regarding its possible participation in the state-led chip alliance United, we still have to wait and see the real actions of South Korea,” he said.

The experts also noted that the practical economic cooperation agreed at the ministerial meeting also implements the spirit of recent remarks made by the leaders of the two countries on Wednesday on the occasion of the 30th anniversary of the establishment of diplomatic relations between the China and South Korea.

At the ministerial meeting, He Lifeng said that China and South Korea, as beneficiaries and builders of the global free trade system, should jointly safeguard the security, stability and smoothness of industrial chains and supply from both countries and the world.

It is hoped that China and South Korea can pursue in-depth exchanges, share opportunities and join hands in development at the new starting point of the 30th anniversary of the establishment of diplomatic relations between the two countries, said said the head of the NDRC.

The South Korea-China meeting on economic cooperation is a regular mechanism for high-level dialogue and exchange between China and South Korea in the economic field. Since its establishment in 1999, the mechanism has been successfully organized 16 times, which has greatly promoted exchanges in the field of macroeconomic policies between the two countries.

The two sides signed several memorandums of understanding on cooperation covering third-party markets, online silk road, innovation and entrepreneurship. The next ministerial meeting will be held in South Korea in 2023.

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