Illustration: Chen Xia/GT

Trade between China and South Korea has reached a critical juncture amid complex geopolitical pressures, placing its future trajectory under close scrutiny. Central to this issue is the urgent need to establish an effective communication bridge, which will serve as the foundation for a practical cooperation mechanism. This effort is particularly vital in key strategic sectors, such as semiconductors.

South Korea's exports advanced 8.2 percent on-year in 2024 to set a new annual record on robust shipments of semiconductors, according to data compiled by the country's Ministry of Trade, Industry and Energy, Yonhap News Agency reported on Wednesday. By destination, exports to China, the top trading partner, increased 6.6 percent to $133 billion, led by chips, petrochemical products and mobile devices.

The data not only underscores how close economic and trade relations between China and South Korea are, but also highlights the potential for future cooperation between the two countries.

There is no denying that the sustained and healthy development of China-South Korea economic and trade relations has significant importance to both countries. As China is South Korea's largest trading partner, its market demand plays an undeniable role in driving the South Korean economy. Meanwhile, South Korea's technological advantages and product competitiveness in fields such as semiconductors, petrochemicals and mobile devices provide high-quality supplies for the Chinese market. Therefore, deepening economic and trade cooperation between China and South Korea not only helps South Korea cope with downward economic pressure but also serves as an important pathway to promote regional prosperity.

However, it is also important to note that in the current context of complex and changing geopolitical dynamics, China-South Korea trade is facing unprecedented challenges. In particular, the US, out of strategic purposes, has implemented strict export controls and technological blockades on high-end chip technology, which poses significant obstacles to cooperation between China and South Korea in the semiconductor field. 

The semiconductor industry is not only one of the pillar industries of the South Korean economy but also a key driver of its export growth, having a crucial impact on the overall performance of the South Korean economy. In 2024, exports of semiconductors rose 43.9 percent on-year to $141.9 billion, surpassing the previous record of $129.2 billion set in 2022, according to Yonhap.

Yet the competitive dynamics between China and South Korea in some sectors have hindered bilateral trade and technology cooperation to a certain extent.

In light of this, how to strengthen bilateral cooperation between China and South Korea in 2025, especially in the semiconductor industrial chain, has become particularly crucial for economic ties. This is not only related to the current economic interests of both countries but also represents a strategic layout for long-term future development. 

Against this backdrop, it is even more essential for China and South Korea to strengthen coordination and communication and establish a closer cooperation mechanism to explore diversified cooperation models to enhance the resilience and competitiveness of the semiconductor industrial chain.

It is precisely in the challenging environment that the role of the Regional Comprehensive Economic Partnership (RCEP) becomes particularly evident. The agreement can provide a moderately accessible and feasible platform for China and South Korea. Within this framework, the two countries can establish closer policy communication mechanisms, explore more open trade policies, promote transparency in technology export approval processes and reduce the impact of non-tariff barriers on technological cooperation.

This is especially crucial in the semiconductor sector, where there is significant potential and a pressing need for collaboration between China and South Korea. By integrating their respective strengths, the two countries can achieve technological breakthroughs and cost reductions through cooperation, thereby enhancing the overall processing level of the semiconductor industry and establishing a stable and efficient industrial chain cooperation model. 

It is believed that once substantial progress is made in this critical field, the positive effects will extend to other areas, injecting momentum into broader economic and trade cooperation between the two countries.