South Korea and Beijing have agreed to maintain production ties and supply chains as tensions between China and Taiwan mount.
South Korean foreign affairs minister Park Jin met his Chinese counterpart, Wang Yi, in Shandong province to discuss maintaining the stability of production and supply chains.
Wang said China and the Republic of Korea (ROK) should resist “politicising the economy, instrumentalising trade and weaponising standards, undermining the stability of global production and supply chains”, according to Chinese state news agency Xinhua.
Both sides have agreed to accelerate the second-phase negotiation of the China-ROK free trade agreement. In the meantime, they will abide by WTO rules and maintain openness and transparency in supply chains, they said.
The EU has also agreed with China to tackle supply chain disruption primarily caused by Covid at the latest EU-China High-Level Economic and Trade Dialogue (HED).
“The EU and China are key trading partners,” said EU executive vice-president Valdis Dombrovskis.
“The importance of our economies comes with a responsibility to shape joint responses to global economic and trade challenges, such as disruptions in supply chains, global food insecurity, debt relief for the most vulnerable countries and reform of the World Trade Organisation.”
The two parties discussed exchanging information on the supply of critical raw materials.
However, the EU also raised concerns over the lack of a level playing field and the growing politicisation of the business environment in China.
Fitch Ratings said this week that further Covid-19 outbreaks could cause China’s growth to underperform against expectations.
“We expect China’s ‘dynamic zero-Covid’ policy to remain in place well into 2023. Mass testing and localised controls should prevent another bout of economically disruptive lockdowns in 2H22,” said Fitch.
“However, additional pandemic-related disruption in China could affect economic, fiscal and external prospects for other APAC sovereigns and territories, with possible credit implications through channels such as trade, tourism and financing.”
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