China and South Korea are already close trading partners, but the two countries are hoping that a free trade deal will give a boost to their slowing economies.

Chinese President Xi Jinping and South Korean President Park Geun-hye declared on November 10 that the two countries had reached a "substantial conclusion" on a free trade agreement (FTA), which is expected to become effective at some point next year after final checks in both countries.

It follows 30 months of negotiations, and businessmen involved in trade between the two countries have been calculating the opportunities and risks from the deal.

In the course of the last week alone, South Korean organizations such as the Korea International Trade Association and the Korea Small and Medium Business Association in Beijing have held several information sessions on the FTA in Beijing, Shanghai and Seoul.

The sessions all discussed a similar theme: how to take advantage of the FTA and make further inroads into Chinese domestic markets.

China is South Korea's biggest trading partner, accounting for about 21 percent of South Korea's total trade in 2013, estimated at a value of $1.08 trillion. But there is still plenty of room for further growth, experts say.

"The problem is, our products don't end up in the hands of Chinese customers," Choi Yong-min, chief representative at the Beijing office of the Korea International Trade Association, told the Global Times on Monday.

Currently, more than 40 percent of South Korea's exports to China are intermediary goods, such as auto and electronic parts, which are then assembled in China for exports.

South Korean businessmen also see Chinese domestic markets as the biggest potential opportunity from the FTA.

According to a survey released on Monday by the South Korean Chamber of Commerce and Industry, 75 percent of respondents from 700 companies that participated in the survey said the FTA will provide an opportunity to further tap into the Chinese market.

Meanwhile, 25 percent of the respondents expressed concern about the potential threat from expansion of Chinese companies into the South Korean market.

The biggest beneficiary for South Korea, respondents said, would be the cosmetics and fashion industries.

A Chinese Internet-based cosmetics company, whose product lists include many South Korean cosmetics brands, also sees the FTA as an opportunity.

"South Korean cosmetics products have a huge market in China so [the FTA] will definitely help our business," a staff member with the company who wished to remain anonymous told the Global Times on Tuesday.

But there might be some challenges for South Korean companies in other sectors - especially electronics manufacturing, an area in which Chinese companies have been developing fast in recent years.

First-mover advantage

South Korea has already signed free trade packs with its two other major trading partners, the US and the EU. The level of trade openness with China has lagged somewhat behind.

In South Korea, items excluded from the free trade deals account for 0.2 percent and 0.4 percent of the overall imports from the US and the EU, respectively. But even after the FTA with China is officially signed, 8 percent of the goods imported from China will be excluded from the deal.

Some of the excluded items include sensitive agricultural products such as rice, beef and pork, as well as autos.

However, experts said that even though the FTA might not be as open as others, South Korea still will have an advantage compared to some of its regional neighbors, which have not yet signed an FTA with China.

No such deal has yet been signed by Japan as well as the island of Taiwan, for instance, whose main export items such as electronics compete with those from South Korea. China's trading negotiations with Japan have been stalled for various reasons, including political ones. The negotiations between the Chinese mainland and Taiwan have also been hampered by political factors.

"China can benefit from the FTAs South Korea has already established with 47 other countries, as they can offer guidelines for future bilateral and multilateral negotiations," Wang Rui, a researcher with the Institute of Asia and Africa Studies under the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Friday.

More FTA deals with other countries and regions could also help arrest the slowdown in China's economic growth, Wang said, adding that the central government is eager to push for more trade liberalization.

Xi promised greater trade liberalization during a key Party meeting in November 2013, and the government has been accelerating negotiations on bilateral and regional trade deals since then.

Only a few days after announcing progress on the FTA with South Korea, China said it had concluded eight years of negotiations with Australia, with an FTA between the two countries set to go into effect next year. China so far has established 11 FTAs, according to the website of China's Ministry of Commerce.

Larger trade deals

Many experts, including Wang and Choi, believe that the FTA between Asia's largest economy and its fourth-largest will spur progress toward a trilateral FTA that includes Japan. It could also help with even larger trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP) and the Free Trade Area of the Asia-Pacific (FTAAP).

China, South Korea and Japan wrapped up the sixth round of negotiations on the trilateral FTA in Tokyo on November 27 and the sixth round of talks on the RCEP began on Monday in Greater Noida, India.

Negotiations on the RCEP - a proposed FTA between the 10 members of ASEAN and Australia, New Zealand, India, China, Japan and South Korea - are scheduled to be concluded by the end of 2015. If signed, it will create an economic bloc that accounts for 30 percent of the world's economic output.

The FTAAP, which was discussed during last month's Asian Pacific Economic Cooperation (APEC) meeting in Beijing, would cover more than 50 percent of the world's GDP.

The leaders of the 21 APEC nations agreed at the meeting in Beijing to launch a two-year study into the FTAAP.

Meanwhile, the US is pushing another huge regional deal, the 12-nation Trans-Pacific Partnership (TPP), although it involves stricter standards and openness requirements.

"China wants to join various different types of trade liberalization initiatives, but the TPP's requirements are too tough at the moment," Wang said. 

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