China turns to south

Press, 5 August 1988, Page 12

China turns to south

From a correspondent for the “Economist” in China

China seems to be getting fonder of South Korea than it is of its supposed aliy North Korea. This year, despite the absence of official ties, trade between China and South Korea will total SNZ3.B billion, 38 per cent above last year’s level and perhaps three times the level of China’s trade with the communist North. Things have come a long way since Chinese soldiers fought alongside North Koreans in the Korean War of the 19505. The trade suits both sides. China needs export markets and foreign investment. Coal from

China is a cheap, easily available fuel for South Korea’s heavy industry. While most business still goes through Hong Kong, direct trade — mainly in coal, steel and grain — amounted to SNZ9O9 million Ist year. There is South Korean investment in China too. Daewoo was behind a Hong Kong-American joint venture five years ago in Fujian provincerand now there is talk that South Korea’s huge Pohang Iron and Steel Company will take a 25 per cent share of a steel mill in Shandong. South Korea’s President Roh

i Tae Woo believes that the two countries will, get-muchcloser > during his term of office. Last , September China’s athletes at- , tended the Asian Games in Seoul, > and they will be there again for the Olympics this year, although ■ North Korea’s won’t. > China used to worry that this sort of thing would push North Korea, with its warm-water : —ports, wholly into the Russian camp. That worry grows less as ■ Mr Mikhail Gorbachev’s Tussia becomes closer to China and colder to Stalinist Pyongyang. i Copyright — The Economist.