The Federation of Korean Industries (FKI) announced on Nov. 11 that the number of Chinese tourists visiting South Korea, which amounted to 8,068,000 in 2016, dropped to 4,790,000 last year in the wake of the China National Tourism Administration’s ban on group travel to South Korea, which was implemented in August 2016.
Despite China’s Terminal High Altitude Area Defense (THAAD) retaliation, the mutual investment between South Korea and China increased from US$6.08 billion to US$8.4 billion from 2016 to 2018. Specifically, South Korea’s investment in China rose 40.3 percent to US$5.66 billion and China’s investment in South Korea rose 33.7 percent to US$2.74 billion. The ratio of South Korea’s investment in China to South Korea’s total overseas investment rose from 8.67 percent to 9.57 percent during the period.
The FKI said that South Korea’s trade surplus with China, which was US$37.45 billion in 2016, is estimated to fall to US$23.91 billion this year. “This has to do with this year’s decrease in semiconductor exports, an oversupply of liquid crystal panels, a decline in the export unit prices of petroleum products, and a decline in demand in the manufacturing sector of China,” the FKI explained.
According to the FKI, China is still South Korea’s most important partner in terms of trade, investment and tourism although South Korean companies have expanded their trade with and investment in Vietnam and India since the retaliation.
FKI also mentioned that the South Korean government needs to normalize its relations with China by, for example, completing the service and investment negotiations for its FTA with China without delay and arranging Chinese President Xi Jinping’s state visit to South Korea.
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