SEOUL, South Korea — The repairing of ties between Japan and South Korea comes amid falling returns in trade from China and ramped-up U.S. efforts to corral its two allies deeper into a supply chain and security network amid rising geopolitical tensions.
China is the biggest export destination for both Japan and South Korea and has provided a major source of income for the region to ride out economic slumps for years.
Now as China ramps up its production capacity at home and moves up the value chain, Japan and South Korea are seeing trade with their giant neighbor growing less lucrative and more competitive overall. China’s economy last year grew at the second-slowest pace since the 1970s, which has also slowed business for many major players.
