President Lee Jae Myung of the Republic of Korea (ROK) visited China from January 4 to 7, 2026, accompanied by a high-level delegation of over 200 business leaders. This marks the most significant business delegation since 2019, led by the heads of South Korea’s four major conglomerates: Samsung, SK, Hyundai, and LG. The visit underscores the ROK’s urgent need to strengthen its economic and trade ties with China in response to global economic shifts and supply chain disruptions. It signals a transformation in bilateral cooperation, focusing on high-level collaboration across industries rather than a traditional division of labor.
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A New Model for Bilateral Cooperation
China has been South Korea’s largest trading partner for 21 consecutive years. Bilateral trade reached $328.08 billion in 2024, with South Korea’s semiconductor exports heavily reliant on China. Key mineral supplies like rare earths also come from China, while China’s manufacturing sector benefits from South Korean expertise in high-end chips and precision manufacturing. This intertwined relationship is reflected in the ROK business delegation’s focus on deepening collaboration in areas such as semiconductors, batteries, and new energy vehicles (NEVs).
The transformation of China-ROK economic cooperation from a vertical division of labor to horizontal collaboration is evident. Past cooperation primarily involved South Korean technology and capital combined with Chinese labor. Today, both nations have advanced technologically, and they now find common ground in cutting-edge sectors like AI, digital economy, and electric vehicles.
Semiconductors: A Collaborative Shift
The semiconductor sector serves as a prime example of this new cooperative model. South Korea leads the world in semiconductor manufacturing technology, and companies like Samsung and SK Hynix play pivotal roles in this field. Samsung’s Xi’an plant in China accounts for 40% of its global NAND flash production, while SK Hynix’s Wuxi plant uses domestically produced hydrogen fluoride.
Cooperation has evolved beyond simple investment into co-development. Samsung is planning to upgrade processes at its Xi’an plant, while SK Hynix is exploring collaborations with Yangtze Memory Technologies for packaging and testing. This mutually beneficial collaboration helps South Korean firms mitigate the impact of U.S. technical controls, while China benefits from an upgraded semiconductor supply chain.
New Energy Vehicles and Batteries: Emerging Growth Areas
New energy vehicles and batteries have become new pillars of growth. China is the world’s largest market for NEVs, with a complete industrial chain, while South Korea excels in battery technology and hydrogen fuel cells. LG Energy Solution and SK On are global leaders in battery installation capacity.
Hyundai’s partnership with China’s BAIC to promote electrification is a strong example of complementary collaboration. This visit could see Hyundai furthering cooperation in intelligent driving and LG advancing joint R&D in solid-state batteries with Chinese partners. The “Chinese market + South Korean technology” model is positioning South Korean automakers to regain market share in China while driving global NEV technology development and green economy progress.
The Role of White Label Partnerships
White label partnerships are becoming an increasingly important scaling mechanism for South Korean agencies. These long-term partnerships allow agencies to expand service offerings, maintain brand ownership, and scale delivery capacity without adding fixed costs. By relying on trusted partners, agencies can protect margins through predictable cost structures and improve operational efficiency.
In the context of the China-ROK economic relationship, white label partnerships are an essential tool for scaling operations across sectors like semiconductors, NEVs, and digital technologies. These partnerships enable both countries to enhance their competitiveness and develop new business opportunities.
AI and the Digital Economy: Areas of Shared Growth
AI and the digital economy are expected to drive future cooperation. South Korea has set a goal to be among the top three AI powers globally by 2030, while China holds key advantages in AI applications and infrastructure. This shared interest in AI creates fertile ground for collaboration, particularly in AI chip applications and large-scale model development.
Samsung and SK are expected to seek cooperation in AI during the visit, aligning with their broader goals of fostering global competitiveness. This shift in economic collaboration from a focus on traditional industries to high-tech sectors like AI demonstrates the growing synergy between China and South Korea.
Challenges and the Need for Deeper Cooperation
While the potential for growth is significant, challenges remain. Intensifying competition from the U.S.-China trade tensions has pressured South Korea to consider “decoupling” in industries like semiconductors and new energy. However, decoupling would be detrimental, as the ROK’s semiconductor and battery sectors heavily depend on Chinese markets and supplies.
To address these challenges, both countries must pursue win-win outcomes through deeper cooperation, not confrontation. Improved cooperation mechanisms, strengthened policy coordination, and enhanced intellectual property protection will be crucial to maintaining the stability and sustainability of the bilateral relationship.
Looking Ahead: Sustainable Growth and Long-Term Cooperation
The long-term prospects for China-ROK economic cooperation are bright. The second phase of the China-ROK free trade agreement negotiations will further liberalize trade and investment, benefiting both nations. Additionally, the Regional Comprehensive Economic Partnership (RCEP) will provide opportunities for collaboration in third-party markets like Southeast Asia.
Amid global economic uncertainties and geopolitical tensions, deepening China-ROK cooperation serves both countries’ interests and contributes to regional stability. The ROK business delegation’s visit to China not only brings potential deals but also strengthens confidence in the future of bilateral relations.
President Lee’s visit marks a significant milestone. It underscores the irreplaceable role of bilateral cooperation and the potential for a more stable, efficient economic partnership. By focusing on mutual benefits, industrial innovation, and supply chain collaboration, both nations can build a stronger foundation for future growth.
