South Korea's ambassador to China is being quoted saying the two countries could open talks on a free trade agreement next year.
The report in the state-run China Daily quotes Ambassador Yu Woo-ik as saying the sides "are expected to initiate official FTA talks in 2011." China is Asia's largest economy and South Korea is fourth-largest on the continent.
South Korea sends almost one-quarter of its exports to China, but faces growing competition from Taiwan, which just completed a trade agreement with China.
South Korea has been pursuing other trade deals to prop up its export-driven economy. An agreement signed last year with the European Union is pending, but a deal with the United States has been stalled in Congress since 2007 because of concerns from the American beef and auto industries.
Some information for this report was provided by AP, AFP and Reuters.
