(For other news from the Reuters China Investment Summit, click on http://www.reuters.com/summit/ChinaInvestmentSummit09)
* China consumers of growing interest
* South Korea trade growth with China to stay fast
* S.Korea needs to keep tech advantage over China
By Jonathan Thatcher
SEOUL, Aug 31 (Reuters) - China's booming consumer market is a growing focus for South Korean exporters, who are more accustomed to their giant neighbour as a major production base for sales to other countries, Trade Minister Kim Jong-hoon said.
But while links with South Korea's biggest trade partner will continue to grow quickly, Seoul has its work cut out to maintain a technological edge over China whose pursuit of world markets is "very threatening", Kim told the Reuters China Investment Summit.
"In 1992, when we established diplomatic relations, the two-way trade volume between Korea and China was only $5 billion. In 2008, (it) grew up to $170 billion. That means it increased 34 times in the last 16 years. This is an incredible growth in trade."
He forecast the figure would exceed $200 billion this year, a growth trend that would continue.
"As the Chinese economy keeps growing, at a pace of 8 percent lately, and people there get better off, I think there's a big change in the Chinese economy from a simple production base to a consumption market," Kim said.
He noted that in 2001 China absorbed just over 4 percent of global exports, an amount that by last year had risen to 7 percent.
The surge has been accompanied by increasing localisation there of South Korean companies, which have so far invested more than $35 billion in the world's third-biggest economy.
South Korea, Asia's fourth-largest economy, which has seen its competitive edge in labour-intensive industries eroded by China, still has a technological lead in areas such as flat panel screens, memory chips, autos and mobile phones.
It also has good opportunities to invest in China's ambitious infrastructure development such as high speed trains, nuclear plants and green energy, Kim said.
On top of that, it can offer its expertise in the financial sector, including insurance and investment banking.
There has been criticism in Chinese media of overnight closures by South Korean companies, leaving their local employees and suppliers unpaid.
But Kim, though acknowledging the problem, said it had diminished significantly and that the vast majority of South Korean firms were there for the long-haul.
There were 85 cases in 2007, mostly around the Chinese coastal city of Qingdao. So far this year, the number is 11, Kim said.
"It has pretty much stabilised," he said, adding it was no longer a serious point of contention between the two countries.
Commenting on the mounting competition from China in emerging markets, Kim said it was a strong threat that meant South Korea needed to keep investing in research and development, especially in the wake of the latest economic crisis.
He noted that some academics put the technology gap between the two economies at only 3-5 years, with fierce rivalry in such industries as shipbuilding.
But for the moment, Kim said, South Korean businesses still have the upper hand in controlling quality, marketing and after-sales service.
(Editing by Ken Wills)