South Korea and China, 400 billion yuan currency swap…"Full restoration of bilateral relations after THAAD"

President Lee holds a 95-minute summit with President Xi Jinping

Lee: "Economic cooperation should be a horizontal structure"

Xi: "An important neighbor we cannot move away from"

Speed up FTA service and investment negotiations

Strengthen strategic communication on the Korean Peninsula

President Lee Jae-myung held a summit with Chinese President Xi Jinping in Gyeongju, North Gyeongsang Province, and the two agreed to strengthen economic cooperation between the two countries. They also agreed to accelerate South Korea-China free trade agreement (FTA) service and investment negotiations. Regarding North Korea, they agreed to strengthen strategic communication. The summit was seen as an attempt to seek a full restoration of bilateral relations that had been strained since the THAAD (Terminal High Altitude Area Defense) incident.

◇ Signing of a 400 billion yuan currency swap

President Lee held a summit from 3:50 p.m. for 95 minutes at the National Gyeongju Museum in Gyeongju, where the Asia-Pacific Economic Cooperation (APEC) leaders' meeting was held on the 1st. The two leaders also had a dinner together with officials and business figures from both countries immediately after the meeting. President Xi attended the APEC summit and made a state visit to Korea from the 30th of last month for two nights and three days.

Meeting face to face for the first time, the two leaders agreed to pursue economic cooperation that their peoples can feel. President Lee proposed modernizing the economic cooperation structure between South Korea and China. He said, "The economic cooperation structure between South Korea and China is changing from a vertical division-of-labor structure to a horizontal cooperative structure," and "the mutually beneficial cooperative relationship between the two countries should further develop in line with the times." President Lee also mentioned that both he and President Xi achieved political growth from local government positions and said, "Our shared experiences will be a good foundation for producing tangible results in South Korea-China relations that the peoples of both countries can feel."

President Xi said, "China and South Korea are important neighbors that cannot be moved away from and inseparable partners in cooperation," and "since establishing diplomatic relations 33 years ago, the two countries have pursued exchanges and cooperation across various fields beyond differences in social systems and ideologies, helping each other's success and achieving common prosperity." That day, the two countries signed a 5-year, 400 billion yuan (about 70 trillion won) won-yuan currency swap agreement.

Wi Seong-rak, Director of the Presidential Office's National Security Office, said, "They agreed to speed up substantive consultations in the South Korea-China FTA service and investment negotiations, diversify consultation channels to revitalize local economies, and strengthen cooperation to stabilize supply chains."

◇ Lee: "Strengthen strategic communication"

President Lee emphasized that China's role is important for peace and stability on the Korean Peninsula. He said, "I very positively evaluate the formation of conditions for engagement with North Korea, such as the recent active high-level exchanges between China and North Korea," and "I hope that South Korea and China will strengthen strategic communication to resume dialogue with North Korea by using these favorable conditions."

In response, President Xi said, "China values China-South Korea relations and maintains continuity and stability in its policy toward Korea," and "we are willing to strengthen communication with South Korea, deepen cooperation, expand common interests, respond to challenges together, and inject more positive energy into regional peace and development by promoting stable and long-term development of the China-South Korea strategic cooperative partnership."

He added, "I am willing to have in-depth exchanges of views with President Lee on bilateral relations and matters of common interest." The two countries agreed to strengthen consultations on issues including the Korean Peninsula by activating regular high-level communication channels. Regarding whether the leaders exchanged views on various issues such as the U.S. approval to construct nuclear-powered submarines and the West Sea structures issue, Director Wi said, "They exchanged opinions on various current issues, and security issues were also discussed in that context." On the issue of sanctions on Hanwha Ocean, he only said, "There were productive discussions."

Gyeongju=Reporter Han Jae-young / Beijing=Correspondent Kim Eun-jung jyhan@hankyung.com