South Korea in dilemma as its economy more dependent on China

Written by: Manoj Kumar Ramesh
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Hong Kong, Jan 12 (Yonhap) South Korea has come upagainst a dilemma as its export-led economy grows moredependent on China, which poses both opportunities and risksat the same time, experts say.

China''s influence on the South Korean economy is evermore visible as the world''s second-largest economy has becomethe largest destination of its products. For China, SouthKorea is its third-largest trading partner after the UnitedStates and Japan.

When it comes to its relationship with China, however,South Korea has had a hard time juggling to balance itseconomic interests and geopolitical security woes.

Despite its close economic relationship with SouthKorea, China has often ended up siding with its ideologicalneighbor, North Korea, as shown in a recent series of deadlyborder incidents provoked by the North.

Some experts warn that as South Korea becomes moreeconomically reliant on China, it will become more vulnerableto pressures China may exercise.

"China has its own way to solve its diplomaticissues," Chun Ka-lim, a Chinese affairs professor at SouthKorea''s Hoseo University, told Yonhap News Agency.

"China''s leadership in the economy does notnecessarily lead to its leadership in other areas." "Amidrising security risks, South Korea should seriously reconsiderits relationship with China and approach the country with newstrategies," he said.

In one of the most recent examples, Chun said, Chinahas forced Japan to surrender in a territorial dispute bywithholding exports of its rare earth minerals.

South Korea''s exports to China accounted for 25percent of its total overseas shipments in 2010, almostequivalent to all of its exports to the United States, Japanand the European Union combined that year.

The weight of South Korea''s trade with China made up20 percent of its total shipments abroad last year, reachingthe 20 percent mark for the second year in a row. Thirtypercent of consumer goods imported to South Korea were made inChina.

The data underscores the vulnerability of SouthKorea''s consumer prices that can be easily affected by ups anddowns in inflation in China. (Yonhap)

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