China, S. Korea seek FTA by end of 2014
July 4, 2014, 12:01 am TWN
SEOUL -- China and South Korea agreed at summit talks Thursday to seek the early launch of a market to directly trade their currencies and complete free trade negotiations by the end of the year.
The agreement was contained in a joint communique endorsed by South Korean President Park Geun-hye and her Chinese counterpart Xi Jinping at the end of their talks in Seoul.
The two leaders agreed to step up efforts for the completion of negotiations on a “comprehensive” free trade agreement (FTA) by the end of this year, the communique said.
The major Asian economies began FTA negotiations in 2012 but progress has been delayed by differences on the extent of market opening.
China is currently South Korea's largest export market and two-way trade stood at around US$275 billion last year.
The joint communique said the two countries would strengthen efforts to launch direct trading in the won and the yuan.
Financial officials in Seoul believe such a market will help South Korea respond to the yuan's recent internationalization, diversify settlement currencies and reduce its heavy reliance on the greenback.
A memorandum of understanding sealed by the central banks of the two countries called for designation of a qualified bank as a renminbi clearing bank.
China agreed to give South Korea Renminbi Qualified Foreign Institutional Investors status, allowing it to invest about 80 billion yuan (US$12.8 billion) in Chinese stocks.
Summit Pushes North Over Nuclear Weapons
China and South Korea issued a joint call for the denuclearization of the Korean peninsula at a summit in Seoul Thursday that was seen as a pointed snub of nuclear-armed North Korea by chief ally Beijing.
In a joint statement after their talks, the Chinese and South Korean presidents, Xi Jinping and Park Geun-hye, reaffirmed their “firm opposition” to the development of nuclear weapons on the peninsula, but seemed divided on how best to persuade the North to give up its bombs.
While Park told reporters that the two sides had agreed to use “all means” possible to bring denuclearization about, Xi stressed that “dialogue and negotiation” were the best way forward.
“There was certainly a difference in perspectives, but that has always been there,” said Yang Moo-Jin, a professor at the University of North Korean Studies.
“South Korea might have liked Xi to say something more direct towards the North, but that was wishful thinking,” Yang said.
If the joint statement marked no departure from established Chinese and South Korean policy towards North Korea, the fact that it was released at a summit in Seoul carried significant symbolic weight.
It was Xi's first trip as head of state to the perennially volatile Korean peninsula, and his second summit with Park, who visited China last year.