Trade pact promises South Korean players unprecedented access to Chinese finance, telecom markets: Premier Li Keqiang
Trade pact will open up some sectors as never before, premier tells business leaders in Seoul
Premier Li Keqiang promised yesterday to allow South Korea more access to China's financial and telecommunications markets than it had given to any of Beijing's existing trade pact partners.
Li made the commitment as he sought to reassure a South Korean business delegation that China would open up more of its economy and advance market reforms. "[China] will launch service trade and investment negotiations with [South Korea] using pre-establishment national treatment and a negative list," he told the business executives.
That means South Korean businesses and investors would be subject to the same market terms and conditions as their Chinese counterparts except for sensitive sectors deemed off limits by the "negative list".
"Especially in certain service industries such as finance and telecommunications, the regulations in [the China-South Korea treaty] will surpass those China has already promised to other countries with which it has free-trade treaties," Li said.
He told the business executives the agreements were expected to create a US$ 1.2 trillion joint low-tariff market for the two countries.
After bilateral talks on Saturday, China and South Korea announced that they would aim to have a free-trade agreement in place by the end of the year.
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In addition, China will raise South Korea's renminbi qualified foreign institutional investor quota to 120 billion yuan (HK$147 billion) from 80 billion yuan. The RQFII scheme allows foreign investors to use offshore yuan to buy A shares.
That increase will mean South Korea will have the second-highest investment quota for mainland financial markets after Hong Kong.
Scott Snyder, fellow for Korea studies at the US-based Council on Foreign Relations, said China had consistently been, and would continue to be, the driver on the bilateral China-South Korea free-trade agreement.
Though keen to join the Washington-led Trans-Pacific Partnership, South Korea was not reluctant to push forward the FTA at this point, he added.
"The FTA has become a political objective and the scope of it is smaller … it's just not as ambitious an agreement as compared to other existing FTAs," Snyder said. "So the Korean one is just less ambitious."
Li also said China welcomed South Korean university students to set up businesses in China.
