The government will renew efforts to seal a free trade agreement with China, its largest trading partner, a regular economic meeting chaired by President Lee Myung-bak at Cheong Wa Dae affirmed Thursday.
Knowledge Economy Minister Choi Kyung-hwan pledged the ministry will "examine the environment for a Korea-China FTA to help Korean firms improve their competitiveness in the Chinese market."
A ministry official said demand in China for home appliances and cars has been boosted by government spending and Seoul "needs to help Korean firms seize this opportunity by signing an FTA with China."
There have been increasing calls in Korea for an FTA with China from academics and industry, especially now China and Taiwan are going to sign the Taiwan-Mainland Economic Cooperation Framework Agreement (ECFA), which is in effect an FTA, in June. Taiwan is home to many of Korea's key industrial rivals.
Korean businesses' share in the Chinese market has increased, but their share in the digital TV market fell from 12.2 percent in 2008 to 7.7 percent last year due to fierce competition there.
Lee said China is calling for a bilateral FTA and there is relatively little trade friction between the two countries, while bilateral trade has increased, "so it's only a matter of time before we conclude an FTA with China." Last year, bilateral trade stood at US$140.95 billion, more than 2.1 times Korea's trade with the U.S. of $66.69 billion.
Kim Joon-dong, at the Korea Institute for International Economic Policy, said, "It's essential for Korea to conclude an FTA with China to advance into China's huge domestic market. An FTA would also contribute significantly to concluding similar pacts with other countries."