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          The formal signing of China South Korea FTA may benefit China's superhard industry

          AUTHOR:odkcheaw CLICK:979次

            On June 1, Chinese Minister of Commerce Gao Hucheng and South Korean Minister of industry, trade and resources Yin Xiangzhi formally signed the free trade agreement between the government of the people's Republic of China and the government of the Republic of Korea on behalf of the two governments in Seoul, South Korea. According to the agreement, the proportion of free trade in goods of both sides exceeds 90% of tax items and 85% of trade volume. This means that the FTA between China and South Korea will enable more than 90% of the products of the two countries to enter the era of zero tariff after the transition period.

            China is South Korea's big trading partner, big import source country, big export market and big overseas investment target country. According to the data of South Korea, the trade volume between China and South Korea reached 228.9 billion US dollars in 2013. According to China's Ministry of Commerce, the bilateral trade volume between China and South Korea reached 274.2 billion US dollars in 2014. Some experts predict that the scale of bilateral trade between China and South Korea is expected to exceed US $400 billion within five years.

            Three Highlights

            China South Korea Free Trade Agreement (FTA) is a free trade agreement that China has signed so far, covering a wide range of topics and involving a large amount of country trade. The agreement covers 17 areas including trade in goods, trade in services, investment and rules, including e-commerce, competition policy, government procurement, environment and other "21st century economic and trade issues". At the same time, the two sides promise to continue to carry out negotiations on trade in services in the negative list mode after the signing and entry into force of the agreement, and to carry out investment negotiations based on the pre entry national treatment and negative list mode.

            It is reported that this agreement involves the contents of e-commerce and local cooperation in the negotiations of the free trade zone, and sets up separate chapters on financial services and telecommunications services. Apart from Hong Kong, Macao and Taiwan, mainland China has never been involved in the signing of FTA with other countries or regions before.

            Zhuang Rui, vice president of the Institute of international economics of the University of international business and economics, told the Shanghai stock exchange news that the FTA between China and South Korea has three highlights: "high level of openness, wide range of openness and taking into account the interests of both sides.".

            According to reports, China and South Korea's FTA in the liberalization of trade in goods, trade in services, investment market access and facilitation, etc., have reflected a high level of openness.

            In terms of goods trade, the two countries will reduce the tariffs on products involving 91% of China's taxes and 92% of South Korea's taxes to zero in the next 20 years. The trade volume of these zero tariff products will account for 85% of China's total imports and 91% of South Korea's total imports respectively.

            In the field of trade in services and investment, China has promised to start negotiations in the form of pre access national treatment and negative list, which has not been fully implemented in China so far, and has only been tried out in China (Shanghai) pilot free trade zone for more than one year.

            In terms of the scope of opening up, it not only includes the traditional FTA terms such as trade in goods, trade in services, investment, rules of origin, customs procedures and trade facilitation, trade relief, technical barriers to trade, but also involves "21st century economic and trade issues" such as intellectual property rights, competition policy, e-commerce, environment, and economic cooperation, showing the "all-round and wide-ranging" market opening of the two countries.

            In terms of stage goal and final goal, the balance of interests of both sides is fully considered. For example, during the 10-year transitional period, 71% of the total tax items are products with zero tax reduction from China, and 72% from South Korea; during the 20-year transitional period, 91% from China, and 92% from South Korea, and the opening-up rate is generally equal and balanced.

            In addition, the provisions on non-tariff measures such as "Korean products can be quickly cleared within 48 hours in principle" also show unique characteristics of China and South Korea.

            China's superhard material industry may benefit

            "China South Korea FTA has little impact on China's economy as a whole, but relatively more impact on South Korea's economy as a whole."

            Mei Xinyu, a researcher at the Institute of international trade and economic cooperation of the Ministry of Commerce, said that the agreement will help consolidate the foundation of China's "concentric circle" regional economic integration strategy, improve the international division of labor system in East Asia, promote the integration of regional sales market, and further consolidate the advantages of East Asia's manufacturing industry through the "big market" effect. In the short run, it may have a certain impact on China's manufacturing industry competing with South Korea, but in the long run, it is good for China's manufacturing industry, because South Korea's domestic labor rights are over emphasized, the labor movement is out of control, and after the degree of market integration between China and South Korea is improved, it is expected that South Korea's automobile manufacturing and other links will be more transferred to China. This will usher in more opportunities for the development of China's superhard materials and products industry.

            In addition, in the foreign trade of abrasive products in China, the trade between China and South Korea accounts for a significant proportion. In 2014, China's export destination of brown corundum and silicon carbide ranked third in South Korea; China's export destination of diamond ranked fourth in South Korea; China's export of emery cloth ranked third in South Korea, and China's import of emery cloth ranked third in South Korea. The signing of the FTA between China and South Korea may greatly increase the bilateral trade volume of abrasive tools.

            Of course, there are also disputes in this industry: due to the low added value of China's superhard materials and products, whether such a large opening will have an impact on China's superhard materials and products industry? Relevant people in the industry said that the trade between China and South Korea is more intra industry trade in a production chain, so it does not exist, because our products have a low added value and have been opened up On the impact on related industries. Such openness will only reduce the cost and transaction cost of the products of the two countries in the production chain, so it is a win-win situation.

            The reporter also learned that according to the content of the agreement, the home appliance industry, electronic industry, daily chemical industry, clothing industry and South Korean food industry will also benefit mainly.


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