China and South Korea on Thursday agreed to measures that will expand the use of China’s tightly controlled currency and boost trade as Xi Jinping made his first presidential visit to the Korean Peninsula.
Expectations were high that Xi’s summit with South Korea’s President Park Geun-hye would expand an economic and business relationship that has flourished in the past decade.
Xi was accompanied by 250 business executives including luminaries such as Jack Ma, founder of the Alibaba e-commerce empire, and Robin li, Chairman of search engine Baidu. The Korea Chamber of Commerce said it was biggest ever foreign business delegation to South Korea.
A statement from South Korea’s Finance Ministry and Central bank said the South Korean won will become directly exchangeable with the yuan, joining major currencies such as the US dollar, Japanese yen and euro that are convertible with the Chinese currency.
The decision also makes the yuan only the second currency after the US dollar that is directly convertible with the won. At a press conference, Park said South Korea and China will aim to complete long-running free trade talks by the end of this year.