An economic official has downplayed the effects of the free trade agreement (FTA) between China and South Korea. This comes after the Korean International Trade Association said Wednesday that Korean investment in China was up over 12% for the first five months of the year. Meanwhile Chinese investment in South Korea for the first half of the year was up nearly 80%. The association attributed the increase to the FTA that came into effect at the end of last year.
The signing of the China-Korea FTA caused dismay in Taiwan, where it was feared the country could lose out to a major local trade rival in the Chinese market. But Gordon Sun of the Taiwan Institute of Economic Research says it too early to say the FTA is chiefly responsible for the rise in investment.
"Chinese investment in South Korea is just one part of the country’s global strategy of external investment. Korean investment in China in the past few years has basically all been large sums, as the country hopes to tap the Chinese consumer market. So to say that these results are only on account of the FTA, I think that’s really not the case," said Sun.
Sun said Taiwan should not fret too much about the effects of the FTA but rather urgently address the country’s own problems. He said these included a hollowing out of the country’s industries, industry moving overseas and disappointing export performance.