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Emergence Of China And The Economy Of South Korea

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Chapter Summary

The emergence of China as a major player in the global economy has many consequences for the economy of South Korea and serious implications for that country’s future prospects and economic relationship with China. This chapter examines the changes in the export structure of the two economies that have taken place since the establishment of formal diplomatic relations in 1987 and their effect on the South Korean economy. It specifically examines whether the rise of China and its ‘catching-up’ with Korea has caused the ‘hollowing out’ of Korea’s corporate sector. South Korea has become an important parts supplier for China’s manufacturing firms and thus indirectly benefited from the growth of China’s manufacturing exports. The growing bilateral trade and deepening of production networks may be taken as a sign of growing economic interdependence of the two economies.

Keywords: bilateral trade; China; economy; South Korea

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