As friendly neighbors, China and South Korea have a long history of communication and similar cultural background, which provides good conditions for the development of trade between China and South Korea. Moreover, at present, the economies of the two countries are at different stages of development, with complementary structures and respective needs, which also provides the necessity and reality for economic and trade cooperation between the two countries. Since the formal establishment of diplomatic relations between China and South Korea in August 1992, the trade form has changed from indirect trade to direct trade, and the trade volume has increased rapidly. China has become South Korea's third largest trading partner after Japan and the United States, while South Korea has maintained its position as China's fourth largest trading partner after Japan, Hongkong and the United States. At the same time, the cooperation between the two sides in the investment field has also made amazing progress, especially the investment of Korean enterprises in China has blossomed everywhere since 1992 was officially launched, accounting for more than 20% of its total overseas investment. During the seven years from 1992 to 1998, China actually made use of South Korea's direct investment of 7.57 billion US dollars, becoming the largest investment target country of South Korea, and South Korea also occupied the seventh largest investment source country among all countries that directly invested in China. The cooperation between the two sides in the investment field has promoted the import and export of a large number of raw materials, technical equipment and finished products, thus greatly promoting the development of bilateral trade.
Second, China-ROK trade problems and causes analysis
The development of Sino-Korean trade is a rapid development process from scratch and from small to large. It is natural to congratulate these achievements, but it is also normal. With the growing and mature trade base between China and South Korea, more and more problems are exposed. Therefore, it is necessary to find out the problems and analyze the reasons, so as to take targeted countermeasures on this basis.
(A) the problems in the development of Sino-Korean trade
At the macro level, there are some intuitive problems in bilateral trade between China and South Korea:
1. Trade growth was weak until there was negative growth.
In the four years after the formal establishment of diplomatic relations between the two countries from 65438 to 0992, the trade between the two sides has made great progress, with an annual trade growth rate of over 40%. However, by 1996, due to the introduction of a series of foreign trade policies and regulations in China and the impact of rising raw material prices in the international market, the export enthusiasm of Chinese enterprises declined. As the fourth largest export market in China, Korean exports are bound to be affected. At the same time, South Korean-funded processing trade enterprises, which play an important role in bilateral trade, are affected by the decline in export profits, thus slowing down China's import trade from South Korea, resulting in the growth rate of bilateral trade dropping from 44.8% in195 to 17.7% in/96. Since 1997, the situation has improved, and bilateral trade has increased by 20.3%, but it is far from the growth momentum before 1996. From 65438 to 0998, bilateral trade was increasingly affected by the Asian financial crisis, especially South Korea was one of the countries concerned, so the growth of Sino-Korean trade came to an abrupt end. According to the statistics at the end of 1998, the bilateral trade showed an unprecedented negative growth, with a decrease of 1 1.6%. 1999 in the first half of the year, although bilateral trade recovered, the growth rate was not fast.
2. The trend of trade imbalance is increasing.
As can be seen from the above table, China's bilateral trade deficit with China and South Korea is getting bigger and bigger, reaching $58 1 billion in/997, accounting for 38.9% of the total value of goods imported from South Korea. Especially since the financial crisis occurred in Korea in the second half of 1997, China's exports to Korea have fallen sharply, and some bulk commodities such as fiber products, agricultural and mineral products, electronic components, etc. It's falling even more. 1998, China's export to South Korea was only US$ 61700,000, down by 3 1.3% over the previous year. At the same time, South Korea's exports to China are not as good as expected. Exports of industrial products such as semiconductors, automobiles, machine tools, ships, communication equipment and general consumer goods such as household appliances to China increased substantially in the first half of the year, and gradually shrank in the second half. By the end of the year, the total export to China had reached $654.38+0.499 billion, an increase of only 0.4%. 1998 In the whole year, the bilateral trade deficit of China reached 8.72 billion US dollars. Set a new record. 1999 in the first half of the year, China's trade deficit was still expanding, reaching $4.46 billion. The author believes that the existence of trade imbalance between the two countries is inevitable and understandable, but if this imbalance continues and expands blindly, it will eventually affect the healthy development of bilateral trade.
South Korea's investment in China has shrunk.
Before 1997, the overall scale of Korean investment in China was expanding every year. Just as China and South Korea are striving to promote the economic cooperation between the two sides to a higher level, the outbreak of the financial crisis quickly froze this evolution. 1998, there were only 1309 direct investment projects by Korean enterprises in China, and the actual investment was180.3 billion US dollars, down by 25.3% and 15.9% respectively over the previous year. In particular, some projects with long payback period and large scale face investment compression, delayed investment or divestment. In addition, a large number of branches and trading companies of Korean enterprises in China have been evacuated. Since a considerable part of the bilateral trade between China and South Korea is undertaken by Korean-funded enterprises in China, the large-scale "shrinking" of investment will inevitably affect the current and future development of bilateral trade.
(B) Analysis of the causes of the problems
The above-mentioned intuitive and visual problems must have their reasons, which can be summarized as follows:
1. The Asian financial crisis is the chief culprit of the current predicament.
From August 65438 to August 0997, a financial crisis characterized by the accelerated depreciation of the won and the deep decline of the stock index began to sweep across South Korea, which plunged the domestic economy of South Korea into chaos: many large enterprise groups closed down or got into trouble one after another; Difficulties in capital turnover; The number of unemployed people has soared; The bank refused to open an import letter of credit. In this case, Korean companies cannot import at normal time. However, during the Asian financial crisis, China insisted on not devaluing the RMB, which increased the export cost relatively. South Korean enterprises have drastically reduced their orders to China and instead imported from Southeast Asian countries, resulting in a sharp decline in China's exports to South Korea. On the other hand, in order to increase foreign exchange reserves, the Korean government used the depreciation of the won to increase exports, and the trade surplus changed from negative to zero and increased. As the largest export market of South Korea, China is bound to be impacted by Korean imports, which makes the bilateral trade imbalance more serious. It is worth mentioning that, although theoretically speaking, South Korea's exports to China should maintain a strong growth momentum, because a considerable number of enterprises undertaking bilateral trade are Korean-funded enterprises engaged in import and export processing trade in China, their import enthusiasm has also declined, and the increase in imports is less than the decrease in exports; Coupled with the shrinking domestic demand in China and the weakening import demand, Korean exports to China did not increase significantly, so the bilateral trade volume generally declined.
For the same reason mentioned above, the cost of Korean investment in China has increased, and most Korean-funded enterprises regard "cost reduction" as the first choice for investment in China, so Korean investment in China will inevitably be greatly reduced. Moreover, in the face of the domestic economic depression, Korean enterprises lack funds and have no time to invest overseas, thus causing the phenomenon of "shrinking" investment in China.
2. The difference of import and export commodity structure is one of the important reasons of trade imbalance.
Because the economies of the two countries are at different stages of development, according to the principle of comparative advantage of international trade, the traditional trade between China and South Korea really conforms to the essence of this theory at the macro level, that is, China exports primary products or labor-intensive industrial products with low technology content and low added value to South Korea, such as raw materials, agricultural and mineral products, textiles and clothing, leather and so on. South Korea exports technology-intensive and capital-intensive industrial products to China, such as chemical products, electronic communication equipment, mechanical and electrical products, etc. Even though China exports some electronic products to South Korea. It is this commodity structure based on the difference in technical level that makes the bilateral trade between China and South Korea unbalanced. Furthermore, on the whole, the price elasticity of goods exported from China to South Korea is higher than that exported from South Korea. When the international market fluctuates, the former is more vulnerable to impact or influence. After the Asian financial crisis, a large number of cheap goods flooded into the international market, and the relative increase in the price of China's export commodities will inevitably lose a large part of the market share. In other words, even if South Korea is not one of the countries involved in the crisis, this difference in trade structure will expand the trade balance and make the unbalanced situation more severe. In a word, this structure of import and export commodities characterized by vertical division of labor is one of the important reasons for the increasing imbalance of bilateral trade.
The characteristic factors of South Korea's investment in China are also one of the reasons for the decline of bilateral trade.
As one of the "Four Little Dragons" in Asia, the rapid development of South Korea in 1970s and 1980s is obvious to all. With the development of domestic economy, the domestic wage cost has also risen rapidly, the international competitiveness of some general manufacturing industries has gradually weakened, and some labor-intensive industries and some heavy chemical industries (such as cement) have gradually been listed as sunset industries. In order to encourage the development of emerging industries such as electronics, bioengineering and aviation, and accelerate the upgrading of industrial structure, the Korean government has actively taken measures to promote the transfer of labor-intensive industries overseas. China and South Korea are geographically close, with relatively backward economic development, low labor costs and rich agricultural and mineral resources, which naturally become the first choice for South Korea to invest in such industries. According to statistics, more than 60% of South Korea's investment in China is concentrated in labor-intensive manufacturing industries such as textile and garment industry, electrical appliance assembly industry, wooden furniture, footwear and leather. This is the industrial feature of South Korea's investment in China.
Judging from the scale of a single investment, most Korean investment projects in China are small and medium-sized projects, of which about 70% are below $6,543,800+0,000. 1998 attracted 1309, and the average scale of Korean direct investment was only1378,000 dollars, which was not only lower than the average scale of Korean overseas investment, but also lower than the average scale of all foreign investments in China (2.296 million dollars).
Because a considerable part of Sino-Korean trade is undertaken by Korean-funded enterprises in China, the existence of the above two characteristics leads to the obvious lack of growth potential of bilateral trade, and also leads to the poor ability of Korean-funded enterprises in China to resist risks. At present, the competition of labor-intensive products in the international market is becoming more and more fierce, and most small and medium-sized Korean-funded enterprises are unbearable and generally face operational difficulties. Because of the fragility of Korean-funded enterprises in China, the import and export of raw materials, production equipment and finished products driven by investment are greatly affected. In addition, due to the characteristics of the industry and scale of South Korea's investment in China, many Korean-funded enterprises will inevitably emphasize cost reduction in management, which will lead to the intensification of labor-capital conflicts and will also affect the development of trade and investment between the two sides.
Third, make progress despite difficulties and respond positively.
In the long run, there is still much room for the development of Sino-Korean trade. Although the trade between the two countries has been hit hard, the foundation of development such as cultural similarity, geographical proximity and economic complementarity still exists. South Korea's economy, in particular, has encountered temporary difficulties, but many factors that create economic miracles, such as sound infrastructure, high-quality labor force, strong enterprising spirit and open trade system, have not been lost, which will play a positive role in South Korea's coming out of the crisis. Therefore, we must not ignore or give up this important market of South Korea. Moreover, the position established by the two countries in each other's foreign trade is the result of long-term efforts of both sides. We should take a positive attitude, advance despite difficulties, and take corresponding measures to reverse the current passive situation. Of course, the key to the long-term and stable development of Sino-Korean trade is to expand China's export market to South Korea. To this end, we should do the following work:
(1) Accelerate the structural adjustment of import and export commodities of both sides.
China's traditional products exported to South Korea are mostly resource-intensive or labor-intensive products. In the current international environment, this kind of product has the fiercest competition and the biggest impact. Therefore, it is not only inevitable to accelerate the structural adjustment of China's exports to South Korea. Although the structure of export commodities to South Korea has improved in the past two years, the labor-intensive characteristics of low added value and low technology content are still obvious. To this end, first, we should broaden the scope of trade and diversify export commodities. With the development of China's economy, China's high-tech and high-value-added products are increasingly favored by the international market, so we can increase the export of such products to South Korea, such as electromechanical parts and finished products (televisions, telephones, etc.). The second is to improve the quality of export commodities and change from "winning by cheap" and "winning by quantity" to "winning by quality" as soon as possible. Only in this way can we adapt to the changes in the international situation, maintain or even expand market share in the competition, and make export products truly become products with high foreign exchange earnings. Cai Tong also hopes that the ROK will export more raw materials, petrochemical products and complete sets of equipment to China in line with the needs of China's industrialization and industrial structure upgrading. In short, both sides should give consideration to both immediate and long-term interests and promote the healthy development of bilateral trade.
(2) Vigorously develop technology trade between China and South Korea.
In 1970s, South Korea focused on developing capital-intensive industries such as heavy chemicals and automobiles, so its application technology in many fields reached a considerable level. If this technology can be imported from South Korea, it will be quite beneficial to China's infrastructure construction and technological transformation. China has its own advantages in the research and development of advanced technologies such as aerospace, microelectronics and bioengineering. Therefore, there is great potential for developing technical cooperation between the two sides. The two sides can strengthen cooperation in the technical field, jointly develop new products, improve the competitiveness of their products, and thus promote the development of commodity trade between the two sides.
(3) Promote the cooperation between the two countries in the investment field to a higher level.
In terms of South Korea's investment in China, first, we should pay attention to adjusting the investment direction of Korean enterprises, so that Korean enterprises can increase their investment in high-tech industries, energy, transportation, agricultural development and other fields according to the Catalogue for Guiding Foreign Investment Industries; The second is to improve the scale structure of Korean-funded enterprises and increase the enthusiasm of large enterprise groups to invest in China, which requires China to make more efforts in improving the investment environment, especially in improving government services. In this way, Korean large enterprise groups will seriously study the investment value of China market from a long-term and global perspective, and continue to accelerate the pace of investment in China. In addition, China and South Korea should also pay attention to strengthening cooperation in the central and western regions of China, so that South Korea's investment in China presents an all-round and multi-level development pattern. In addition, China should also accelerate the pace of investment in South Korea. At present, the capital flow between the two sides is mostly one-way flow from South Korea to China, which is not conducive to the lasting and stable development of bilateral cooperation. With the formation of China's multi-level, multi-directional and multi-form opening-up pattern, it will be an inevitable choice for China enterprises to go abroad to invest and set up factories overseas. As a friendly country with similar geographical location and cultural background to China, South Korea will also become one of the first choice areas for China's overseas investment. Therefore, China enterprises should change the practice of setting up trade offices only in South Korea as soon as possible and increase their productive investment in South Korea. This will not only deepen and balance the cooperation between the two sides, but also promote the export to South Korea and reduce the deficit of China, thus promoting the balanced development of trade. At present, the Korean government is actively opening the capital market and relaxing the restrictions on foreign investment according to the requirements of the International Monetary Fund, which provides an opportunity for China enterprises to enter the Korean capital market. In particular, the depreciation of the Korean won and the decline in workers' wages have reduced the cost of foreign investment, providing a reality for China to invest in South Korea.
(4) Strengthen policy support to prevent the trade between China and South Korea from continuing to decline.
On the one hand, in addition to actively using the existing preferential policies, such as increasing the textile tax rebate rate from 9% to 1 1%, China enterprises should also give more support to the export of traditional markets: increase the scale of export credit; Simplify the means of export tax rebate; Provide financial support for large Korean enterprise groups investing in China. On the other hand, it is hoped that the Korean government will lower the trade barriers to China's imports from the long-term interests of both sides. It is gratifying that the Korean government has started work in this area. For example, the Ministry of Finance and Economy of the Republic of Korea announced that the number of China products subject to tariff adjustment will be reduced from 199+0 to 19, which will greatly reduce the tariff adjustment rate of eel and other 10 products, and will no longer impose quota tariffs on pig iron. I believe that through the joint efforts of both sides, the decline in trade will be reversed.