Bloomberg News

China-South Korea Summit to Focus on Trade, North Succession

January 08, 2012

(Adds North Korea warning on nuclear program in ninth paragraph.)

Jan. 6 (Bloomberg) -- South Korean President Lee Myung Bak and Chinese President Hu Jintao will consider a free-trade agreement at a summit next week that will also include discussion of North Korea’s leadership succession.

“Both sides basically share the view that a free trade agreement between South Korea and China is needed,” South Korean Foreign Minister Kim Sung Hwan said at a briefing in Seoul yesterday. Lee’s three-day trip begins Jan. 9, and he and Hu will also discuss how to “work together for the sake of peace and stability on the Korean peninsula,” his office said in a statement.

The summit takes place three weeks after the death of North Korean dictator Kim Jong Il and the ascension of his son Kim Jong Un as leader. The regime, which relies on China to prop up its economy, said Dec. 30 that relations with South Korea won’t improve as long as Lee is president and threatened a “sea of fire” for his administration.

China has failed to persuade North Korea to return to six- nation negotiations aimed at getting it to abandon its nuclear weapons program. The U.S., South Korea and Japan have urged the Chinese to put more pressure on the government in Pyongyang, which said in November it was making progress in building a light-water atomic reactor and in producing low-enriched uranium.

“Mutual Interest”

“China and South Korea have a mutual interest in peace and stability on the Korean peninsula, but may disagree on how North Korea reforms, opens up and denuclearizes to achieve that,” said Yoon Deok Min, a professor at South Korea’s state-run Institute of Foreign Affairs and National Security. “The North Korean variable is expected to be isolated from the FTA discussion, because China and South Korea’s economic relations are too important to both to jeopardize.”

Tensions have risen since Lee reversed his predecessor’s stance of engagement with North Korea, and 50 South Koreans died in attacks in 2010. Lee said yesterday his government “truly values” North Korea and isn’t seeking its demise.

“North Korea should quickly abandon the anachronistic idea of reunifying under communism,” Lee said, according to a statement on the president’s website. “We don’t seek immediate reunification through absorption and do not aim nor try to make the North collapse.”

The two countries technically remain at war since the Korean War ended in 1953 without a peace treaty.

‘Further Reinforce’

North Korea late yesterday responded to Lee’s offer of “a window of opportunity” for dialogue with a vow to “further reinforce” its status as a nuclear-weapons state.

“As long as the enemy is persistent in his moves for aggression, the DPRK will further reinforce the position of the nuclear-weapons state to protect its dignity and sovereignty,” the Committee for Peaceful Reunification of Korea said in a statement carried by the official Korean Central News Agency. DPRK is an acronym of North Korea’s formal name, the Democratic People’s Republic of Korea.

Hu may boost aid to North Korea to strengthen Kim Jong Un’s hand in consolidating power after the death of his father. China is seeking to prevent instability that could prompt an influx of refugees crossing over the 880-mile (1,416-kilometer) border it shares with North Korea.

China accounted for 79 percent of North Korea’s 2009 international trade, according to the Seoul-based Korea Trade- Investment Promotion Agency. China provides almost 90 percent of energy imports and 45 percent of the country’s food, the New York-based Council on Foreign Relations said in a 2009 report.

Lee will also meet with Chinese Prime Minister Wen Jiabao, in a visit that underscores deepening economic ties between the two countries. Exports to China, South Korea’s largest market, increased 16 percent to $129.8 billion in 2011 from a year ago, according to government data.

China hopes Lee’s visit will elevate the two countries’ strategic partnership “to a new level,” Foreign Ministry spokesman Hong Lei said at a briefing yesterday in Beijing.

--With assistance from Kevin Hamlin in Beijing. Editors: John Brinsley, Paul Tighe

To contact the reporters on this story: Shinhye Kang in Seoul at skang24@bloomberg.net; Sangwon Yoon in Seoul at syoon32@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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