China, South Korea to boost cooperation

Source:Agencies-Global Times Published: 2013-12-30 23:03:01

China and South Korea agreed Monday to strengthen bilateral cooperation in dealing with possible spillovers from the US Federal Reserve's tapering of its quantitative easing.

The agreement came after Xu Shaoshi, minister of the National Development and Reform Commission (NDRC), held a meeting with his South Korean counterpart Hyun Oh-seok in Seoul on Monday to discuss various issues on macroeconomics and bilateral cooperation.

The ministers agreed to "strengthen bilateral and multilateral cooperation in tackling global uncertainties arising from the US reduction in quantitative easing and sluggishness in emerging economies," sharing views that it will have limitations for an individual country to deal with such spillover effects, according to South Korea's Finance Ministry.

The agreement came after the Fed decided to cut back its monthly bond purchases by $10 billion to $75 billion ­starting January next year. The reduction was feared to cause capital outflow from emerging economies.

Chinese and South Korean officials agreed to widen their policy cooperation, especially in the service sector, under the shared view that advancement of the service industry will be essential for boosting domestic demand and growth.

The economic chiefs also expressed concerns that the massive monetary and fiscal stimulus championed by Japanese Prime Minister Shinzo Abe has sharply weakened the yen and put their exporters at a disadvantage in global markets.

"Japan will look to keep the economy growing by boosting exports through the yen's depreciation," Xu said. "This is a policy that will affect South Korea and China, and therefore needs to be monitored closely."

The yen fell to a five-year low of 105.41 against the US dollar on Monday, and has plunged 26 percent over the past 15 months.

South Korean Deputy Finance Minister Eun Sung-soo said Seoul was concerned by the yen's fall at a time when the won was strengthening.

Other issues that were discussed at the meeting included investment cooperation, urban development and climate change cooperation.

China and South Korea have held economic cooperation meetings since 1992 when the two countries established diplomatic ties. This ministerial meeting marked the 12th of its kind.

Posted in: Economy

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