China and South Korea strengthen financial links with $49 billion swap deal

China and South Korea have signed a new five-year bilateral currency swap agreement worth 70 trillion won ($49.24 billion / 400 billion yuan) as they seek to strengthen their economic ￰0￱ agreement was reached during a high-level meeting between the Bank of Korea and the People’s Bank of China in ￰1￱ Korea’s presidential office stated that it would now exchange its national currency, the won, and the Chinese yuan within the existing ￰2￱ swap line was developed to stabilize the financial market, trade transactions, and ensure liquidity during times of ￰3￱ replaces a previous agreement that expired in October ￰4￱ authorities believe the strategic swap line would help reduce the usage of the US dollar in Asian ￰5￱ move aligns with a broader trend across Asia, where countries are seeking to reduce their reliance on the US dollar in trade and financial ￰6￱ initiatives have been observed between China and other BRICS members, as well as between ASEAN economies, in their efforts to strengthen regional payment ￰7￱ patterns are emerging due to growing confidence in their national currencies and concerns that external monetary turbulence may harm their national ￰8￱ say this is a vital agreement, as all countries globally face multiple global economic challenges, including differences in energy costs, declining growth, and currency ￰9￱ more substantial yuan-won connections, Beijing and Seoul wish to integrate their economies more effectively and foster assurance between their central monetary ￰10￱ pledge broader cooperation The currency swap was one of the six memorandums of understanding signed during Chinese President Xi Jinping’s state visit to South Korea, his first since taking office 11 years ￰11￱ President Lee Jae-myung welcomed Xi in Seoul on the sidelines of the Asia-Pacific Economic Cooperation summit, to expand economic cooperation beyond their four-day-long meeting, which also sought to bolster mutual ￰12￱ agreements encompass economic and trade, services and digital economy, agriculture and related sectors, as well as amendments to quarantine policies concerning Korean produce.

Additionally, they will accelerate their collaboration in combating online and telecom fraud and prioritize collaboration within the silver ￰13￱ Xi hailed the collaboration as marking a new phase of mutual trust and shared ￰14￱ the same time, President Lee added that a closer partnership would help build a stronger foundation for peace and prosperity in Northeast ￰15￱ two leaders also discussed ways to revitalize the Korea-China Free Trade Agreement, which has performed poorly compared to other trade agreements, while expanding their joint investments in clean energy, green technology, and semiconductor ￰16￱ South Korea , the currency swap also adds stability to its foreign exchange reserves, which have been shaky due to global monetary ￰17￱ Bank of Korea explained that the agreement would eliminate the possibility of temporary liquidity shortages and promote financial cooperation in the ￰18￱ agree that this agreement broadens Asia’s financial safety net and creates conditions for similar trade agreements within the ￰19￱ such a context, last year’s agreement by Seoul to renew the $10 billion won-dollar swap line with Tokyo is a positive ￰20￱ faces shifting strategic dynamics The revitalization of economic partnership with China comes at a time when regional geopolitics is shifting in a new ￰21￱ has left Seoul straddling between age-old ties with China, its largest trading partner, and a deepening strategic partnership with Washington and ￰22￱ Sung-hoon, an economist at Korea University, said the swap was a genuine response from the South to maintain multilateral financial ￰23￱ analyst suggested that it served as a “plan B” in case of a deterioration in relations with China or the United ￰24￱ said the agreement demonstrated economic independence and strategic thinking, keeping in mind that the dollar “does not have Korea in chains” ￰25￱ China, meanwhile, flawed regional economic performance and the need to consolidate its regional role encourage pragmatic ￰26￱ revival of Chinese exchange lines, for example, is one component of enhanced integration into Asian economies amid slowing exports and persistent pressure on the property ￰27￱ your strategy with mentorship + daily ideas - 30 days free access to our trading program