South Korea’s Foreign Economic Relations and Government Policies

Abstract

South Korea’s foreign economic relations have diversified from its past dependency on the United States and Japan during the Cold War period. China and ASEAN have become more important trading partners to Korea than the United States, Japan, or the EU. But, in investment relations, the United States, Japan, and the EU still play a critical role in Korea in terms of both inward foreign direct investment and portfolio investment. Responding to these structural changes in its foreign economic relations, the Korean government has pursued a multitrack foreign economic strategy in which it makes strenuous efforts to strengthen economic ties with China, ASEAN, and other Asian economies, while still remaining loyal to its existing bilateral relations with the United States, Japan, and the EU.