中韩签自贸协议 创造增长新引擎

Chinese Commerce Minister Gao Hucheng and his South Korean counterpart Yoon Sang-jick signed the bilateral Free Trade Agreement in Seoul on Monday after almost three years of negotiations.

The agreement covers 22 areas, including trade in goods and services, investment and government procurement.

It is also the first time for China to include finance, telecommunications and e-commerce industries in a free trade deal.

The agreement aims remove tariffs on over 90 percent of goods traded between the two countries in the next two decades.

Chinese Commerce Minister Gao Hucheng says the deal will create a new engine of growth for the entire region.

"This free trade agreement between South Korea and China is the most important FTA in East Asia and takes an essential part in both countries' FTA strategy. This will bring momentum to economic trading process in the East Asia and Asia Pacific area and will become a strong foundation by sharing a common destiny to develop our new future."

China is South Korea's largest trading partner, and their bilateral trade grew to almost 230 billion US Dollars in 2013.

But South Korea is one of the few countries that have managed to sustain a continuous trade surplus with China in the past decade.

South Korean Trade Minister Yoon Sang-jick says the agreement will give South Korea's small- and medium enterprises wider access to the Chinese market.

"Through the South Korea-China FTA, our economic relationship will become closer and will reform as a huge market that holds 12 trillion dollars. This will bring unlimited opportunities to companies and the economy in both countries."

Chinese investment in South Korea has also surged in anticipation of the free-trade agreement.

So far this year, Chinese investment in Korea has nearly doubled compared with the whole of last year, already exceeding the 1 billion dollar mark.

That is mainly because the deal is expected to boost the circulation of the Chinese yuan in South Korea.

The two currencies can now trade directly, bypassing the US dollar as an intermediary, after an offshore currency trading hub was set up in Seoul dedicated to RMB clearance last December.

The FTA is also seen as the first step for a trilateral free trade agreement between Beijing, Seoul and Tokyo, bringing the East Asian economic power houses even closer together.

It is also expected to pave the way for even bigger things going forward.

Beijing has been in discussion with South Korea over forming a broader trade bloc called the Regional Comprehensive Economic Partnership.

This is a multilateral Free Trade Agreement that links the ten members of ASEAN or the Association of Southeast Asian Nations with China, India, Japan, South Korea, Australia, and New Zealand.

The extensive FTA between China and South Korea is expected to form a blueprint for these negotiations.

If negotiated successfully, this Regional Comprehensive Economic Partnership would create the largest trading bloc in the world.

For CRI, I'm Poornima Weerasekara.