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(Yonhap Interview) Economist asks Seoul, Beijing to ease tension for economic stability

All News 16:31 July 26, 2016

By Kim Boram

SEOUL, July 26 (Yonhap) -- South Korea and China have to make efforts to ease bilateral political tensions over the deployment of a U.S.-led missile defense system here, a visiting Chinese economist said Tuesday, calling for efforts to promote stable economic and trade growth between the two countries.

"The Chinese economy and the Korean economy are complementary to each other and integrated to a large extent," Justin Yifu Lin, a professor at Peking University in China, said in an interview with Yonhap News Agency and other media. "That means stability of economic growth in Korea is important for China's economic growth and its stability, and vice versa."

Lin made the remark while attending the Global Financial Stability Conference 2016, which the Ministry of Strategy and Finance and the Korea Development Institute jointly hosted at the Westin Chosun Hotel in downtown Seoul Tuesday.

China is South Korea's largest trade partner as the bilateral trade reached US$227.4 billion in 2015, with the Seoul-Beijing free trade pact taking effect in December 2015. Moreover, South Korea's outbound shipments to China alone accounted for nearly 30 percent of its total exports last year.

South Korea is one of the biggest foreign investors in China, with its investments reaching $4.04 billion in 2015, while Chinese investment in South Korea hit a record high of $1.98 billion last year.

The close relationship between the two neighboring countries is feared to face a big hurdle as Seoul and Washington recently announced a plan to place the Terminal High Altitude Area Defense (THAAD) on South Korean soil by 2017.

The issue has attracted strong opposition from China, which argues that the system could target neighboring countries, especially China, in the end, although South Korea and the U.S. say that the deployment is aimed at countering North Korea's growing nuclear and missile threats.

Some are concerned that the Chinese government would take retaliatory action in trade, weighing heavily on Asia's fourth-largest economy, which has been suffering from 18 straight months of negative growth in exports.

Lin, a former vice president of the World Bank, stressed that such political and security issues should be resolved as soon as possible in order to prevent a possible downturn in bilateral trade and economic growth.

"The political and security concerns should not be a barrier for our goal to maintain stability and dynamics of economic growth," he said. "I truly hope that the difference in the security and political concerns will be addressed soon. The sooner, the better."

He also forecast that the Chinese economy will grow 6.5 percent annually over the next five years, accounting for a third of the global economic growth.


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