Illustration: Liu Rui/GT

On November 16 to 17, 2005, then Chinese president Hu Jintao paid a State visit to South Korea. In the China-South Korea joint communiqué issued during the visit, the two countries set "$200 billion" as a target for bilateral trade in 2012.

The two countries reached that goal easily. The latest statistics from the Chinese customs indicate that up to October this year, the volume of bilateral trade reaches $226 billion. That is a very impressive figure.

But we have to be aware that there are problems in China-South Korea economic relations. One is the chronic trade imbalance.

The only year when China saw a small trade surplus with South Korea was 1992. From 1993 onward, South Korea enjoyed trade surplus every year until today. This is a rarity for China, and may not be sustainable.

Another problem, harder to measure statistically, is the future development trend of bilateral trade.

During the first two decades of China-South Korean ties, bilateral trade was largely complementary. But with the development of China's economy and the advancement of its science and technology, the differences have become smaller.

The two countries will gradually see fierce competition in major export destinations in the years ahead.

What can be done to address these problems? One quick answer is that South Korea can further open its market to Chinese products, especially agricultural products and textile products. South Korea should also reduce various non-tariff barriers to Chinese products.

This is a sensitive issue, but it can be solved partly by a free trade agreement (FTA) between the two countries.

FTAs are a popular idea nowadays. China, South Korea and Japan have signed individual FTAs with ASEAN. And the three just concluded in August this year the second round of talks over the proposed establishment of a trilateral FTA. But this is "still at the exploratory stage."

China and South Korea completed their first-stage negotiations on the bilateral free trade agreement in September.

If a bilateral FTA could be rapidly concluded, it will greatly promote trade between China and South Korea.

China and South Korea can also cooperate to help North Korea develop its economy. Economic assistance will help to maintain the North Korean regime. An implosion or collapse of the North Korean regime would not be good for anyone.

A Bank of Korea report released in July says North Korea's external trade, excluding trade between the two Koreas, amounted to $6.81 billion in 2012. Bilateral trade between South and North Korea in 2012 reached a record high of $1.97 billion. But the inter-Korean figure is pretty small if we take into consideration the size of the South Korean economy. The report also says that the Kaesong Industrial Complex accounted for 99.5 percent of this trade, which could be fruitfully developed in other Sino-North Korean zones such as Rason and Sinuiju as well.

Big name South Korean companies could make good use of their presence in China. Their China-based joint ventures could try to sell their products to North Korea via Rason or Sinuiju in the name of their Chinese joint venture companies.

South Korean companies in China might try to invest directly in North Korea if there were no legal restrictions. They might try to provide other important goods such as oil, grain or electricity which North Korea needs badly.

This will benefit all sides. The early and large-scale involvement of South Korean companies in North Korean economic activities will greatly help facilitate the development of the North Korean economy and the eventual opening-up of North Korea to the international community.

This level of economic integration will be a great asset for South Korea if a peaceful reunification is achieved on South Korean terms.

The author is deputy managing editor of the Global Times. The article is based on a speech he made during the Asan Beijing Forum entitled "Korea and China: Next 20 Years" held from November 14 to 15 in Beijing. chenping@globaltimes.com.cn