South Korea and China agreed to expand bilateral investments and jointly counter any negative effects of the U.S. exit from quantitative easing, the Ministry of Strategy and Finance said Monday.

In a meeting between economic chiefs of the two countries in Seoul on Monday, Korea’s Deputy Prime Minister and Finance Minister Hyun Oh-seok and China’s National Development and Reform Commission chairman Xu Shaoshi agreed to build the so-called China Valley in Saemangeum.

The Valley in the reclaimed area of Saemangeum on the west coast, linking the two cities of Gunsan and Gimje with Buan County in North Jeolla Province, will house Chinese research and development centers, companies and apartments.

The Finance Ministry said that Chinese companies will be able to enter the Saemangeum complex independently or by establishing joint ventures with Korean companies.

The first development phase of the China Valley is to be completed by 2020. Afterward, Korea and China will pursue their second development stage for the completion of the Valley.

“Advanced (Chinese) tech, bio and agricultural companies are expected to establish their bases in Saemangeum,” the Finance Ministry said in a statement.

It added that Korea hopes Saemangeum will become a market for China in which it can develop value-added agricultural products after the two sides seal a bilateral free trade pact.

This marked the first time Korea has attracted overseas investments to Saemangeum following the government’s designation of the region as a special economic zone last week.

Korea and China held their 12th economic meeting, covering a wide range of issues from climate change, the creative venture industry, energy, urban policy and the global economic outlook.

“Both countries share a common economic interest and experience as the two sides have rapidly grown in a short period of time,” Deputy Prime Minister Hyun said.

“We are interested in ways to expand our domestic markets, advance industries, resolve environmental problems and further grow urban and agricultural regions.”

Both sides also agreed to jointly counter any negative spillover effects of the U.S. winding down its monthly bond purchases, as the tapering could cause an economic slowdown in emerging economies whose trade with Korea and China has increased over the years.

Korea and China agree that it will be impossible to deal with the U.S. tapering alone, and that a joint effort must be made to buffer the global markets against tapering risks and uncertainties.

By Park Hyong-ki (hkp@heraldcorp.com)