On the increased importance of China for the Korean economy, there are two different and interpretation of economic relationships between China and Korea. “China will want to focus on economic cooperation at the summit. Building strong economic ties with Japan and South Korea will be beneficial,”. Since the war, China has lent political and economic backing to North Korea's leaders: Kim Il-sung (estimated –), Kim Jong-il.
It successfully drove the UN forces out of North Korea, but its own offensive into the South itself was repelled. The Korean War concluded in Julyresulting in the establishment of the Korean Demilitarized Zoneand the eventual withdraw of Chinese forces from the Korean Peninsula. This hindered trade between Seoul and Beijing, because South Korea was unable to protect its citizens and business interests in China without some form of international agreements. Beijing's economic needs involving South Korea were initially eclipsed by those of Moscow.
Relations under Park and Chun — [ edit ] President Park Chung-hee initiated and President Chun Doo-hwan advanced a policy of establishing relations with China and the Soviet Unionand attempting to improve those with North Korea. Good relations with old allies of North Korea were therefore integral to the Nordpolitik policy.
Seoul 's official contact with Beijing started by the landing of a hijacked Chinese civilian airliner in May China sent a delegation of thirty-three officials to Seoul to negotiate its return. This marked the beginning of a series of casual exchanges of citizens.
Impact of China on South Korea's Economy
Some Chinese officials reportedly paid quiet visits to South Korea to inspect its industries, while South Korean officials visited China to attend a range of international conferences. Late s[ edit ] Active South Korean-Chinese individual contacts have been encouraged. Academics, journalists, and particularly families divided between South Korea and China were able to exchange visits freely in the late s.
Significant numbers of citizens of each country reside in the other. The absence of any protections granted by official relations had still remained. Beijing has been politically closer to P'yongyang, and relations with North Korea remained tense and distrustful. It had been difficult for analysts to predict what effect a political turmoil in the People's Republic of China would have on Sino-Korean relations.
After the military putdown of demonstrators in Tiananmen SquareBeijing, in JunePyongyang predictably came out in support of Beijing's actions. Seoul, on the other hand, did not condone or condemn the actions in Tiananmen Square.
Present[ edit ] Trade between the two countries continued to increase nonetheless.
Impact of China on South Korea's Economy | KEI | Korea Economic Institute
Furthermore, China has attempted to mediate between North Korea and the United States and between North Korea and Japan and also initiated and promoted tripartite talks—among Pyongyang, Seoul, and Washington. Diplomatic ties between Seoul and Taipei were nevertheless severed in Throughout the extensive media coverage of impacted Korean companies as well as the regional geopolitical implications, particularly as they relate to the North Korean problem, is a common thread of economists suggesting Korea is too dependent on China for growth.
While this is hardly a new developmentrecent events seem to be reinvigorating scrutiny of the size of bilateral ties. But, in the context of other global relationships how does this one stack up? The Korean economy is reliant on trade for about half of its growth, making each large external relationship of crucial importance. Though both trade as a portion of GDP and the percentage of total exports sent to the top export destination are high, it is not a unique phenomenon, as shown in the Chart 1.
In terms of GDP, Korea is the eleventh largest economy in the world.
Just How Dependent is South Korea on Trade with China? | KEI | Korea Economic Institute
Among its peers in the top sixteen largest economies it is only just slightly behind Germany in terms of total exports as a portion of GDP. Chart 2 provides a complementary perspective. It measures variance in the share of total exports between the top two export partners and among the top five partners for a subset of countries from Chart 1. Or, in other words, it illustrates how spread out exports are. The first bar is reflective of the spread of exports to the top five export partners.
The lower the bar, the less of a difference in the share of total exports between each partner, or the more equally distributed exports are. The second bar reflects the difference between the first and second ranked export destinations. The higher the bar, the bigger the drop-off between the share of total exports.