30 Years of Korea-China Diplomatic Relations: "Economic Cooperation Limited by China's Technological Rise... Need to Create New Momentum"

KIEP, Report on '30th Anniversary of Korea-China Diplomatic Relations: Achievements and Challenges in Economic Cooperation' Released

[Asia Economy Sejong=Reporter Kwon Haeyoung] As the 30th anniversary of diplomatic relations between Korea and China approaches, it has been pointed out that a paradigm shift is necessary as the economic cooperation model between the two countries faces limitations due to China's technological rise and the intensification of US-China strategic competition.

The Korea Institute for International Economic Policy (KIEP) announced on the 24th a report titled "30th Anniversary of Korea-China Diplomatic Relations: Economic Cooperation Achievements and Challenges," which contains these findings.

According to the report, as of 2021, China is Korea's largest trading partner and second largest investment destination, while Korea ranks as China's third largest trading partner. The two sides have developed through three stages: the initial cooperation period (1992?2000), the growth period (2001?2015), and the maturity and transition period (2015?present). In particular, amid globalization, the two countries formed a mutually complementary relationship based on comparative advantage and established a close production network, playing a key role in the global supply chain.

However, the report diagnoses that due to changes in domestic and international environments such as the advancement of China's manufacturing industry and the intensification of US-China strategic competition, the existing cooperation model faces limitations as new challenges arise. It then suggests three directions for future Korea-China economic cooperation: ▲activation of private sector-led economic cooperation ▲establishment of a comprehensive bilateral economic cooperation platform ▲adherence to openness and inclusiveness in regional and multilateral systems. It also calls for the establishment of a cooperative system for "Korea-China supply chain stability" to prepare for geopolitical and geoeconomic risks.

The report emphasized, "Future Korea-China economic cooperation should be pursued in a way that overcomes the structural changes and challenges of the past 30 years, advances in sophistication, and creates new momentum."

This content was produced with the assistance of AI translation services.