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China-South Korea: High-Tech Alliance

By Tom McGregor (chinadaily.com.cn) Updated: 2012-11-26 14:42

China-South Korea: High-Tech Alliance

Tom McGregor

South Korea has earned a remarkable reputation for developing its high-tech sector. South Koreans take pride in the success of Samsung Electronics Corp. Numerous other South Korean companies have focused on creating new computerized gadgets to attract more global consumers.

The country has taken a leading role in the high technology sector, and is poised for another major expansion, since Seoul seeks to bolster trade and diplomatic ties with Beijing. A stronger partnership could bear fruitful results, especially if they sign a Free Trade Area agreement.

China has enjoyed high annual GDP growth rates, but the domestic economy is transitioning from a country recognized for manufacturing low-end goods for cheap prices to a nation that fosters higher-end products.

Beijing also intends to impose tougher environmental and safety regulations on factories. Accordingly, Chinese companies must upgrade their technologies or risk the consequences.

Chinese companies have added incentives to jump-start the domestic high-tech field. South Korean companies can offer more investments and its expertise. Many Chinese have higher disposable incomes so they can purchase more electronics products, as well.

Through greater cooperation, Chinese and South Korean companies could generate more revenues and profits. Beijing and Seoul already appear to have come to better relations in recent months.

"China's deputy commerce minister has encouraged more South Korean investment in the country's high-end manufacturing sector, its green industries, and its modern services industries," as reported by the China Daily.

It added, "the South Korean government meanwhile urged the Chinese government to loosen limitations on foreign investments."

The two nations have good reason to enhance trade ties. According to figures and forecasts, bilateral trade has risen from $100 billion to $200 billion in the past five years and is expected to hit $250 billion this year and perhaps meet the target of $300 billion by 2015.

The South Korean ambassador to China, Lee Kyu-hyun has expressed much optimism. "We will widen investment sectors for foreign companies, innovate the use of foreign direct investment and further improve the investment environment," he said.

He added, "we hope South Korean companies will cooperate more closely with Chinese enterprises in high-end manufacturing and the green sector, and increase their investment in China's modern services."

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