Economy

China and South Korea Forge $49 Billion Currency Swap: Will Economic Ties Soar?

Xi Jinping and Lee Jae Myung signed a $49.24B currency swap and economic deals, boosting ties.

November 1, 2025, 3:33 PM

A composite image showing the Chinese flag and the South Korean flag tearing apart, symbolizing fractured relations.

The flags of China and South Korea are shown tearing apart, symbolizing diplomatic tension. By hapelinium / Shutterstock.com.

Executive Summary

Chinese President Xi Jinping and South Korean President Lee Jae Myung signed a significant bilateral currency swap and several economic cooperation agreements on November 1, 2025.

The bilateral currency swap, valued at 70 trillion won (approximately $49.24 billion or 400 billion yuan), is valid for five years and was established between the Bank of Korea and the People’s Bank of China.

Six additional memorandums of understanding (MOUs) were formalized, covering broader economic cooperation, trade in services, and agricultural exports, marking President Xi’s first visit to South Korea in 11 years.

The Story So Far

President Xi Jinping’s visit to South Korea, his first in 11 years, signals a significant diplomatic re-engagement between the two nations. This renewed focus on financial cooperation includes a bilateral currency swap agreement that matches a previous arrangement which had expired in October, indicating a continuation and strengthening of established economic ties. The move also follows South Korea’s recent establishment of a similar currency swap with Japan in 2023, suggesting a broader regional trend toward enhancing financial stability and cooperation.

Why This Matters

The substantial currency swap and multiple economic cooperation agreements between China and South Korea are poised to significantly deepen bilateral financial and trade ties, fostering greater economic stability and facilitating cross-border commerce. This renewed diplomatic engagement, marked by President Xi’s first visit in over a decade, signals a strategic commitment from both nations to strengthen their relationship and enhance regional economic integration.

Who Thinks What?

Chinese President Xi Jinping and China view the new currency swap and economic cooperation agreements as instruments to enhance bilateral ties and deepen economic integration with South Korea.

South Korean President Lee Jae Myung and South Korea see the new currency swap and economic cooperation agreements as a means to improve bilateral relations and strengthen financial and trade ties with China.

Chinese President Xi Jinping and South Korean President Lee Jae Myung signed a significant bilateral currency swap and several economic cooperation agreements in Gyeongju, South Korea, on Saturday, November 1, 2025. The agreements, formalized on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, aim to enhance and improve bilateral ties between the two nations.

Economic Cooperation Details

The bilateral currency swap line, a key outcome of the summit, is valued at a maximum of 70 trillion won, equivalent to approximately $49.24 billion, for 400 billion yuan. This agreement, valid for five years, was established between the Bank of Korea and the People’s Bank of China. It matches the amount of a previous swap arrangement that had expired in October.

In addition to the currency swap, Beijing and Seoul also formalized six memorandums of understanding (MOUs). These MOUs cover a range of sectors, including broader economic cooperation, trade in services, and agricultural exports, signaling a comprehensive effort to deepen economic integration.

Diplomatic Context

President Xi’s visit to South Korea marked his first in 11 years, underscoring the diplomatic significance of the meeting. The two leaders engaged in talks during the annual APEC forum, which served as a platform for discussing various bilateral and regional issues.

This renewed focus on financial cooperation follows South Korea’s previous establishment of a three-year won-dollar currency swap line of $10 billion with Japan in 2023. That particular agreement was widely perceived as a political gesture amid improving relations between Seoul and Tokyo.

Key Takeaways

The recent agreements between China and South Korea signal a renewed emphasis on economic collaboration and diplomatic engagement. The substantial currency swap and multiple MOUs are set to deepen financial and trade ties, reflecting both countries’ commitment to strengthening their bilateral relationship.