The South Korean government and the ruling party convened an emergency meeting on November 17 and agreed to approve the approval of the China-South Korea Free Trade Agreement at the parliament meeting on November 26. Unlike the free trade agreements signed by China in the past, the China-South Korea free trade agreement can be described as "higher."

It is understood that in addition to the traditional goods trade, service trade and investment agreements, the agreement also involves "new issues in the 21st century", including government procurement, competition policy, e-commerce, and the environment. These are not included in previous free trade agreements. , So its version is higher.

Zhao Jianglin, Director of the International Economic Relations Research Office of the Institute of Asia-Pacific and Global Strategies of the Chinese Academy of Social Sciences, said that in addition to new topics that were not available in the past, the level of the China-South Korea Free Trade Agreement has also improved in terms of traditional investment and service trade. The upgraded version of the free trade agreement is closer to the standards of developed countries. At the same time, it covers many fields, including 17 fields including goods trade, service trade, investment, finance, telecommunications, environment, and e-commerce. Of course, there are still some sensitive areas on both sides that have not been liberalized or gradually liberalized. From the perspective of the tax reduction arrangements between the two parties, China’s highly sensitive products are mainly mid-to-high-end products in manufacturing industries such as automobiles, machinery, chemicals, steel, and electronics. South Korea’s highly sensitive products are mainly concentrated in the fields of agriculture and water, textiles, and automobiles. .

It is worth noting that for Chinese companies, different industries have different reactions to the China-South Korea Free Trade Zone. It can be said that some people are happy and some are worried.

It's a good deal to sell and buy

Chen Xiaomei's family lives in Shouguang, Shandong, which is a famous green onion producing area. Last year, the production of Shouguang green onions reached 150,000 tons, some of which were exported to Japan, South Korea and other countries.

Hearing that some agricultural products will reduce tariffs after the establishment of the China-Korea Free Trade Zone, Chen Xiaomei is very excited: “Korean people’s diet cannot do without scallions, so a lot of Shouguang scallions are exported to Korea every year. If the tariffs on scallions are lowered, there will be more Many green onions are sold to Korea."

According to a reporter from the China Business Times, in the China-Korea Customs and Trade Agreement, important agricultural and sideline products such as rice, peppers, garlic, onions, and apples are not included in the tariff reduction or exemption. Therefore, will Chen Xiaomei’s green onions be offered at a more favorable price Sales in South Korea have to wait patiently.

It is not only the agricultural product industry that hopes that the free trade agreement will be implemented as soon as possible, but many restaurants are also looking forward to it. "A lot of kitchenware and raw materials in our barbecue shop are imported from South Korea. If tariffs are lowered, our costs will be reduced." The owner of a Korean barbecue restaurant in Wangjing pointed to a stone pot and introduced to reporters, "These pots are It’s a must-have item for Korean cooking and it is also a consumable. Our shop is imported from Korea. Only professional kitchen utensils can make authentic Korean food. If the free trade agreement is implemented, I will spend every year on the cost of equipment procurement. It can save about 10%."

The ingredients are also one of the key factors of Korean cuisine. "Chili sauce and kimchi are very expensive ingredients, if I import them from Korea, the cost is too high, and the customers may not accept it. So now I hire them all in the shop. Korean masters come to China and make these products in China.” However, the shop owner is still dissatisfied: “After all, many raw materials in China are different from South Korea, and the taste of kimchi produced will still be different. If the tariffs are removed, kimchi The cost of purchasing these products is equivalent to the cost of hiring a chef to make them. I must choose to import them because I want to cook authentic Korean cuisine in China."

In addition, Xu Hongqiang, director of the Department of Foreign Economic Affairs of the Development Research Center of the State Council, believes that in addition to some enterprises, the China-South Korea Free Trade Agreement will also benefit consumers in both countries. For example, some popular products such as household electrical appliances, household chemicals, clothing, shoes and hats that go to Korea for travel and shopping or Korean purchases will be cheaper. For South Korean consumers, they will also buy agricultural and fishery products, clothing and footwear, home appliances and other products from China at a more favorable price.

Small and medium industrial enterprises may benefit

For small and medium-sized industrial enterprises, investing in South Korea through the China-South Korea Free Trade Agreement will also bring more value-added benefits. For example, a Chinese company was registered and established in South Korea in 2013, and its main business is to introduce solar panels produced in China to major solar power stations in South Korea. After the China-South Korea Free Trade Agreement takes effect, companies can reduce tariffs by 8%, and because South Korea has signed free trade agreements with 52 countries and regions including the United States and the European Union, Chinese companies can use this to enter the world market and bypass trade barriers.

In terms of trade in goods, China will eventually remove tariffs on 91% of its products from South Korea, covering 85% of imports from South Korea. At the same time, Korea will eventually remove tariffs on 92% of its products from China, covering 91% of China's imports. China's textile and apparel, non-ferrous metals, steel, machinery and equipment industries can further reduce the cost of exports to South Korea and increase their market share in South Korea. South Korean machinery and equipment, chemicals, liquid crystal display and other industries will also better share China's vast business opportunities.

It is understood that as many as 255 Chinese companies have registered in South Korea this year. The director of a private enterprise said in an interview with the media before: “South Korea is also a transit point for the entire trading body, and it can also radiate to the European Union, even the United States or the larger market. Just say that we have also passed this springboard. I believe our company will go further."

In addition to the direct mutual benefit of China and South Korea’s economy, the China-South Korea Free Trade Area will also have a huge impact on the surrounding areas, the most direct being Japan and Taiwan. In 2013, Japan's unwillingness to open up tariffs on many items caused the China-Japan-Korea Free Trade Area negotiations to stall. The conclusion of the China-Korea Free Trade Area negotiations will help "force" Japan back to the negotiating table. The most stressed companies are in Taiwan, China. In November last year, Taiwan’s Hon Hai Group Chairman Guo Taiming said anxiously in an interview with television media: “Customers have negotiated with our company on the terms of the China-Korea FTA (Free Trade Agreement). Customers will always watch for seven or eight years. After that, Taiwan has no time."

From the perspective of product positioning, the similarity of the trade structure between South Korea and Taiwan of China is as high as 77%. Taiwan's eight major industries, including steel and automobiles, will all be affected by the entry into force of the China-South Korea FTA.

The competition that cosmetics companies are ready to meet

Also feeling the pressure are some Chinese cosmetics companies. Hearing about the China-Korea Free Trade Agreement, the first reaction of many consumers is that they can buy Korean cosmetics at a lower price. And Chinese cosmetics companies seem to be reluctant to deal with such changes.

"Korean cosmetics are famous for their specificity, especially in recent years. Korean cosmetics are very popular." Mr. Xiang, who has been in the cosmetics business for nearly 10 years, said that Chinese cosmetics companies will face great pressure after the signing of the free trade agreement. "Domestic cosmetics The market is currently showing a three-pronged situation of domestic brands, European and American brands, Japanese and Korean brands. If Korean products are reduced in price due to lower tariffs, the current balance will be broken, and domestic brands are more likely to be squeezed."

Mr. Xiang’s concerns are not unreasonable. Earlier media reports stated that after the signing of the China-Korea Free Trade Agreement, some Korean cosmetics companies began to analyze the skin of Chinese people and the physique of various regions, develop products for the Chinese market and start small Large-scale production prepares for entering the Chinese market. In the China-Korea Free Trade Agreement, there are tariff reduction policies for cosmetics and daily necessities. Within 10 years, South Korean exports to China worth $73 billion each year can be exempted from tariffs. Many Korean small and medium-sized enterprises hope to benefit from it. A person in charge of a company said: "Once the China-Korea Free Trade Agreement takes effect, we will expand the R&D team and production scale, and strive to occupy more of the Chinese market."

Under the free trade zone dividend, many domestic women have great expectations for purchasing preferential Korean cosmetics and clothing, but there is a chapter in the free trade agreement called "Exceptions."

In the China-Korea Free Trade Agreement, most cosmetics such as perfumes, lipsticks, and eye creams are listed as exceptions. Skin care products, including sunscreens, will be partially taxed. The tax rate will be reduced from the current 6.5% to 5.2 within 5 years. %, a decrease of 20%. In terms of clothing, shoes and hats, tariffs on many products will be reduced from the current 15% to zero within 10-20 years. According to the introduction of the spokesperson of the Ministry of Commerce, Shen Danyang, in terms of household appliances, refrigerators, rice cookers, electric woks, electric ovens, induction cookers, microwave ovens, and some massage instruments, beauty instruments, etc. will cancel the current 15% within 10 years. tariff.

"In the future, China-South Korea free trade will be an inevitable trend, so in the face of competition, we must actively respond." Mr. Xiang suggested that domestic cosmetics companies should not just work hard on imitating, "Many domestic brands have already begun to act and start to become independent. R&D, take a more refined route, but some companies still stand still. When Korean cosmetics are competing for lower prices, the survival of the fittest in the entire industry may be faster, and companies that do not have technological content blindly follow the trend and imitate may be the most Fall down first."