China Becomes Key Partner for South Korea
Ten years after the two countries normalized their relations, their economic and social links have developed a closeness that would have been unthinkable in the days of consistent Chinese backing for north Korea and hostility to the South.
"China has become the most important economic partner for Korea," Goldman Sachs strategist Terence Lim said. "It is the biggest opportunity and biggest threat."
The closeness is deeper than economics.
Chinese is now studied by more language students in South Korea than old favorites German and Japanese.
Tourism between the two countries is booming. In Seoul, newspaper advertisements tout trips to Beijing and other Chinese cities, offering flights cheaper than to South Korea's own resort island, Cheju.
Subway announcements now add Chinese to Korean and English.
In diplomacy, Beijing has help to foster better ties between the two Koreas, minimizing the risk of war Reuters reported.
"Over the last four years, China has consistently supported our sunshine policy of engaging North Korea by being cooperative in helping bring stability to the Korean peninsula," President Kim Dae-jung said on Friday in comments conveyed by his spokeswoman.
?????? Exports??????? China is now South Korea's second-largest export market, bigger than Japan.
Exports to China topped $18 billion in 2001 versus $1 billion a decade earlier, data from the Korea trade-investment promotion agency showed.
South Korean companies such as Samsung Electronics Co. Ltd.
and Kia Motors Corp. have developed businesses in China, gaining a jump on more timid U.S. and European rivals.
The good news for South Korea is a trade surplus of more than $30 billion built up over the past decade, reflecting an edge over China in semiconductors, cars, computers and ships.
The bad news is that economists expect the next 10 years to bring more radical change.
????? China Catching Up????? "China is catching up very quickly. The risk for Korean companies is they may be marginalized if they don't move up the valuation chain fast enough," Goldman's Lim said.
"Digital technology and services will be key," Lim said, referring to South Korea's move into products further up the technology ladder.
South Korea's shipbuilders, the world's largest, are already turning to building liquefied-natural-gas carriers and other elaborate vessels, since China's fledgling ships sector may soon dominate the market for simpler vessels.
Automakers are also wary, opting to build plants in China, as Kia has, rather than see U.S. or Japanese rivals flood Asia with cars and vans produced there.