South Korea's top nuclear envoy will meet his Chinese counterpart in Beijing to discuss the North Korean nuclear issue after the death of Kim Jong-Il, South Korean media reported on Monday as the South's president began a three-day state visit.

Lim Sung-nam will hold talks with Wu Dawei, China's envoy for the North Korean nuclear dispute, on denuclearising the North, Yonhap quoted a Seoul official as saying.

The South has said its primary foreign policy goal this year is maintaining stability on the divided peninsula as its unpredictable neighbour embarks on a third generation of dynastic rule following Kim Jong-il's death last month.

President Lee Myung-bak's visit comes after Chinese media flagged the prospect of trade pact talks in coming months, holding out closer economic ties as a way to narrow political distrust.

Lee will hold talks with President Hu Jintao and other leaders, and the China Daily said the two sides are considering negotiations for a three-way free trade agreement including Japan, and a separate China-South Korea trade agreement.

An unidentified source from China's Ministry of Commerce told the paper the China-South Korea bilateral trade pact talks will probably start in the first half of the year.

Marking the start of the talks, Lee noted the development of relations between South Korea and China since formal ties were established 20 years ago.

I believe that we have achieved rapid development of relations not only in the economic sphere, but in all spheres, Lee said in pool reports of translated remarks.

PROBLEMS HAVE ARISEN

Beijing has faced growing wariness from neighbours over its military modernisation and strategic intentions, especially over North Korea, which is sure to feature on Lee's agenda. The trade negotiations could offer an example of China using the prospect of greater access to its markets and investment to counter such distrust, an official Chinese newspaper suggested.

Particularly with China's rapid development altering the relative balance of power between the two sides, problems have arisen in Chinese-South Korean relations that need urgent attention, said the overseas edition of the People's Daily, the official paper of China's ruling Communist Party.

Above all there is the problem of mutual political trust, said a front-page commentary in the paper by Zhang Liangui, a prominent Chinese expert on Korean affairs.

Although Beijing and Seoul share broad aims on the divided Korean peninsula, Zhang said, their different interests and positions have produced a negative impact on bilateral relations.

President Lee is likely to press China to lean on its ally North Korea to exercise restraint after the death last month of long-time leader Kim Jong-il, who was succeeded by his untested and largely unknown youngest son, Kim Jong-un.

Some analysts have speculated the young Kim may order a provocation, such as a small-scale military attack or nuclear or missile test, to burnish a hardline image with the North's powerful military, whose support is crucial to him.

China is the North's sole major ally and economic partner, and it has repeatedly voiced confidence in Kim Jong-un, while also urging regional restraint and stability.

Seoul's ambassador to China, Lee Kyu-hyung, recently said the South would continue to raise the issue of China's unwillingness to condemn North Korea when it provokes the South.

Despite Beijing's political support for North Korea, Chinese economic ties with South Korea are much larger.

In the first 11 months of 2011, China's trade with the South was worth $224.8 billion (145.4 billion pound), a rise of 19.5 percent on the same period in 2010, according to Chinese customs data.

China's trade with North Korea was worth $5.2 billion in the first 11 months of 2011.

Since 2008, South Korea and China have conducted joint studies on their possible free trade deal.

Talks on the three-way China-Japan-South Korea free trade agreement could start as early as May, said the China Daily, citing the unidentified commerce official.

(Additional reporting by Jeremy Laurence in SEOUL; Editing by Ken Wills and Paul Tait)