Although officially still at war, South Korea and China are now engaged in trade estimated at up to $800 million annually. The exchanges are increasingly open and they now extend beyond commerce to official contacts.
China and South Korea fought each other during the 1950-53 Korean war and have never officially made peace. But ships bearing the red star of the Chinese merchant marine can sometimes be seen at South Korean docks these days, unloading oil, coal and yarn for textile factories.
Across the Yellow Sea, South Korean vessels are frequent callers in ports on the China coast, bringing consumer goods that China is providing its people as part of modernization programs. Television sets, radios and textiles are common items.
The trade began in secrecy in the 1970s, often using Hong Kong middlemen and faked documents. Today, wraps are slowly coming off, and ships sometimes sail directly between the two countries, which are only about 200 miles apart.
Commerce has grown to the point that cargo routed through Hong Kong alone in the first 11 months of 1984 was worth at least $300 million and estimates of the total for 1984 run as high as $800 million.
Trade has smoothed the way for government-to-government contacts. In the view of many analysts, the Peking-Seoul thaw has helped raise chances for serious dialogue between the intensely hostile governments of North and South Korea, although few expect dramatic breakthroughs.
If China is beginning to treat South Korea as a legitimate neighbor, the reasoning goes, it is probably counseling its ally North Korea to do the same. South and North next month are to resume talks on family reunions and economic cooperation.
The officials who run South Korea's export-fueled economy still routinely refuse to discuss the trade. Nonetheless, a Korean version of China fever is taking hold in Seoul. Traders are studying Mandarin. Former CIA director William Colby was in the city earlier this year to address a seminar on China's economy.
"The Koreans believe that China is the only large market left for the future," said one Seoul analyst who follows the trade closely.
Exporters prefer affluent, developed markets like the United States -- which bought more than $10 billion in South Korean goods last year -- but they are fearful that protectionism is closing those doors. In addition, the Middle East construction market, in which South Korean companies won $14 billion in new contracts in 1981, is stagnant.
Many of those with first-hand experience in China, however, realize things move slowly there.
"It is time for South Korean businessmen to cool down over the China trade," said Lee Doo Won, managing director of the Korean Traders' Association in Hong Kong, "since the trading situation inside the country is still very confused."
Between 40 and 50 of the 75 South Korean trading companies with branches in Hong Kong are dealing with China. Contracts are often negotiated by Hong Kong Chinese or by Korean-Americans. But growing numbers of exporters themselves are going into China. Kim Woo Choong, chairman of the giant Daewoo industrial and trading group, was there earlier this year.
Electronics account for many of the sales. Daewoo and two rival companies in the field, Samsung and Gold Star, are selling television sets. Daewoo is reported to be unable to keep up with its orders. Other companies are trying to sell steel and small vans.
The Chinese win either way with South Koreans around when bidding begins, many analysts say. The Koreans either submit the low bid or by their presence bring others' down.
Many Seoul businessmen say they are convinced that the Japanese are trying to disrupt their success. Some Koreans accuse Japanese of photographing South Korean ships in Chinese ports and giving the pictures to the North.
South Korean money has been invested in at least one joint venture, a TV parts plant, in one of China's new industrial zones, but the Koreans have yet to enter manufacturing in a major way. Daewoo is reported to be discussing television assembly in China, but Lee Doo Won says most companies prefer trade.
South Korea's purchases, meanwhile, focus on industrial supplies, farm products and energy. Chinese cotton yarn is now widely used in Korean textile plants. In the last three months of 1984, South Korea was reported to have bought 385,000 tons of Chinese corn, about half its total foreign purchases in that period.
China's leaders appear to want to reduce tension in the region and concentrate on development. By dealing with South Korea, they build trust while getting low-cost goods for their own people.
South Korea, meanwhile, favors almost anything that will loosen ties between the North and China. In addition, trade brings a de facto recognition from the world's largest country.
Although Peking and Seoul have no diplomatic relations, they are in frequent touch. Official contacts began in 1983, when a Chinese delegation came to Seoul to negotiate the return of a hijacked Chinese airliner and its passengers.
Last month, the two governments made contact in Hong Kong to arrange the return of a Chinese torpedo boat that was brought to South Korea by mutineers. The boat was returned in a rendezvous at sea on March 29, where smiling Chinese Navy officers signed an official receipt.
The two sides routinely host each others' representatives at sports events and international conferences. Two Seoul diplomats arrived in Peking for a U.N. meeting on Palestine earlier this month. Other new links include direct-dial phone service and occasional Peking-Seoul flights for tourists.
China's desire to safeguard its relations with North Korea seems to be the main brake on these contacts for now. Moving too quickly toward the South could lead the North to turn toward the Soviet Union. Controlling Soviet influence in border countries is a traditional goal of Chinese foreign policy.
The trade faltered in late 1981. Many analysts attribute this to complaints or threats to China from North Korea and the Soviet Union. Sales are picking up again, but apparently with Seoul having been told sternly to keep it quiet.
North Korea, meanwhile, has launched a parallel effort to court the United States and Japan, the south's two main foreign patrons, but it appears to have had virtually no results.