South Korea is facing growing criticism over the industrial impact of its free trade agreement (FTA) with China as Chinese manufacturing has rapidly upgraded. The former complementary relationship—South Korea supplying components while China handled assembly and processing—is shifting as Chinese intermediate goods increasingly penetrate the Korean market. Korean media have warned that lower-priced Chinese products are putting pressure on domestic manufacturers, particularly in electronic components, auto parts, machinery, and consumer goods.
Park Seung-chan, director of the China Business Research Institute and a professor at Yongin University, wrote in January that more than 80 percent of South Korea’s exports to China had historically consisted of intermediate goods. As China’s manufacturing sector has advanced, Korean exports of materials, components, and equipment to China have declined, while Chinese intermediate goods have gained market share in South Korea.
Korean businesses are also concerned about China’s regulatory environment. As South Korea and China negotiate a second phase of the FTA covering services and investment, Korean media have noted that China today is substantially different from when the FTA took effect in 2015. While China promotes greater market opening, it has also strengthened economic-security regulations, including anti-espionage and data-security laws. Korean companies may still face administrative delays, distribution restrictions, and preferential treatment for Chinese state-owned enterprises.
South Korean lawmaker Choi Soo-jin described the FTA’s 10-year record as marked by “three consecutive years of trade deficits (from 2023 to 2025)” and damage to domestic manufacturing. The debate has increasingly shifted from the FTA’s tariff benefits to how South Korea can maintain domestic manufacturing competitiveness as China’s industrial capabilities expand.
Source: Creaders.net, September 27, 2026
https://news.creaders.net/world/2026/09/27/3052003.html