Agriculture, other thorny issues to be hashed out
Advancing negotiations on a bilateral free trade agreement is a central focus of the first visit by the President of the Republic of Korea Park Geun-hye to China since she took office earlier this year.
China is currently the ROK's largest trading partner. Beijing wishes to reduce its trade deficit with Seoul through the agreement, commentators in the Chinese media have said, expressing hopes that the two sides will make breakthroughs in agriculture, which has been an obstacle to progress in the past.
The two countries will hold the sixth round of talks in the ROK's largest port city of Busan on July 4, according to the country's Ministry of Trade, Industry and Energy on Tuesday.
In the upcoming round of talks, trade representatives plan to come up with a draft that can best reflect the interests of both sides.
"We hope we can have more substantial results (from the planned visit) in the economic sector, and we are making utmost efforts to that end," said Cho Won-dong, the top economic policy secretary to Park, in May, according to the country's news agency Yonhap.
Cho noted that the ROK would first focus on forging an free trade agreement with China before turning its attention to Japan.
Fan Ying, an expert on international trade at China Foreign Affairs University, said the agreement will help balance trade.
"Signing the agreement will not reverse China's trade deficit with the ROK fundamentally … but we expect the agreement could narrow the trade gap," she said.
She said Seoul still has an advantage over Beijing in terms of high-end manufacturing, including semiconductors, displays, petrochemicals, but China is still competitive on the lower end.
While an agreement would be beneficial to both sides, China has the most to gain from any breakthroughs made in the field of agriculture, Fan said.
"Both the ROK and Japan lack openness in agriculture, while China is a powerhouse. If (Beijing and Seoul) managed to make a breakthrough in agricultural talks, the agreement will benefit China's exports," she said.
China has long been the largest export market for the ROK's goods and also the largest overseas manufacturing base for its companies.
China accounted for 25 percent of the nation's exports by the end of 2010 and the ROK's companies have been active in investing in China.
According to the Ministry of Commerce, the ROK's companies invested $4.87 billion in China, accounting for 10 percent of the nation's outbound direct investment in 2010, making the nation the second-largest outbound investment destination for the ROK.
Bilateral trade between the two countries reached a historic high of $215.1 billion in 2012, according to the Economic and Commercial Counsellor's Office of the Chinese Embassy in the Republic of Korea.
China's exports to the ROK totaled $80.8 billion in 2012, while imports from the Asian country reached $134.3 billion, according to the Chinese Ministry of Commerce.
While China's trade deficit with the ROK great, it is "not sustainable" for one side to maintain a trade surplus, said Han Liyu, a professor with Renmin University of China Law School.
Han has also said the viewpoint that a trade agreement with China will be a shock to the ROK's agriculture does not stand up to scrutiny.
The ROK has signed free trade agreements with agricultural exporters in the past, such as the United States and some European countries, Han said, adding that China's agricultural goods are not as competitive as those of the US and Europe.
China and the the ROK launched formal talks in May 2012. The fifth round of talks was held in Harbin in northeastern China in April.
Beijing and Seoul are also seeking a trilateral free trade deal that will include Japan.
Fan, the expert on international trade from CFAU, said progress in the talks between Beijing and Seoul will lay the tracks for a trilateral agreement among China, the ROK and Japan.
"It is also a pressure to Japan. China and the ROK are more like to achieve an agreement before the trilateral one," she added.
Qing Yujiao contributed to the story