Following the post-war years that saw the creation of South Korea, diplomatic and trade relations with Hong Kong were quickly established, heralding the beginning of a new, mutually beneficial relationship.
Since those diplomatic links were forged in May 1949 - less than a year after the country established itself independent from a United States military government following the second world war - Hong Kong and South Korea have grown ever closer. Now, Hong Kong is South Korea's fourth largest export market, following China, the US and Japan.
In the past, South Korea's trade policy placed heavy emphasis on import controls and export growth promotion. Since the economic crisis of 1997, the South Korean government has pursued a strategy of encouraging exports and inducing foreign investment in the belief such a two-fold approach is the only way to return the country to prosperity and sustainable growth.
Given its high reliance on international trade, it has revised its trade policy to a more neutral stance in recent years, a decision that benefits Hong Kong and South Korea. Hong Kong's total exports to South Korea went up by 14 per cent to reach US$7.9 billion last year. During this period, Hong Kong imports from South Korea increased by 12.2 per cent to US$19.3 billion, according to figures from the Hong Kong Trade Development Council (HKTDC).
Hong Kong represents a significant source of imports for South Korea, with electronics and electronic components making up a significant percentage of goods from Hong Kong to the Korean peninsula.
The city is an equally important export market for South Korea. The main elements of this outward trade to Hong Kong include semiconductors, electronic valves and tubes (US$2.5 billion in January-May 2012, or 34 per cent of total) petroleum oils (other than crude) (US$1.1 billion, 14.6 per cent) and telecom equipment and parts (US$751 million, 10.3 per cent).
Hong Kong's position as a gateway to China also works heavily in its favour with regards to Korean trade and much of the manufacturing giant's output is routed through Hong Kong on its way to South Korea.
Following a tripartite summit, bringing South Korea, Japan and China to the table in May, free trade-agreement negotiations involving the three countries will be launched by the end of the year.
For its part, the Consulate of the Republic of Korea in Hong Kong has made every effort to promote bilateral relations between Hong Kong and South Korea. The consulate hosted a Korea-Hong Kong Business Roundtable Forum last month, providing a platform for corporate leaders and industry experts to identify and explore opportunities for business partnerships, joint ventures and strategic alliances through interactive exchange.
Hong Kong is the third largest investment market for South Korea, and there are hundreds of South Korean companies seeking new business opportunities in China, taking advantage of the city's Closer Economic Partnership Arrangement and the development programme of the Pearl River Delta Economic Zone.
About 500 South Korean enterprises are operating in Hong Kong, while 11 of the country's banks are represented. Given Hong Kong's advantages as an investment destination, it has become an ideal overseas base for South Korean companies in many industries.
The city's free economy, uncomplicated tax schemes, business-friendly environment and central tenet of the rule of law are all attractive reasons for South Korean companies to set up in Hong Kong.
According to the HKTDC, South Korean companies established 19 regional headquarters and 56 regional offices in Hong Kong last year. South Korean companies in Hong Kong are involved mainly in financial services (Korea Exchange Bank, Woori Bank and Hana Bank), logistics and transport (Hanjin Shipping, Hyundai Merchant Marine and Korea Travel Service), and cosmetics (Laneige, Sulwhasoo), among others.
Tourism between South Korea and Hong Kong is also burgeoning and about 1 million South Koreans visit the city each year. South Korean visitors to Hong Kong broke the 1 million mark last year for the first time with 1,020,996, up 14.6 per cent from 2010, making South Korea the fifth largest source of visitors, according to the Hong Kong Tourism Board.