Analysis Of The Competitive Edge Of China And Korea In Services Trade

The services trade has become the new growing sector of the trade between China and Korea. From the perspective of competitive edge in services trade, the author uses the TC index, RCA index and other volume index to analyze the competitive edge of China and Korea in service sectors and on the whole respectively, then make a comparison between China and Korea in order to ascertain their competition or complementarity. Firstly, this paper uses the data of total service trade, service imports and exports, growth rate, share proportion in the world services trade to compare the status of services trade in China and Korea with some developed nations. It shows that there is a strong weakness in services trade and imbalanced services structure for two nations. Secondly, on the basis of BOP statistics classification, this paper makes the static and trend analysis on China and Korea's services trade respectively: the static analysis adopts the TC index, RCA index of services trade, and also uses the data of total service trade; the trend analysis adopts the TC index to ascertain the competition level, and then ascertains the competitive edge of service sectors in China and Korea according to the TC average index. The result suggests that China has advantages in tourism, construction, other commercial service, computer and information, and Korea has advantages in transportation, finance and governmental service. In addition, this paper uses the average TC index, the data of service exports and competitive edge trend to compare the competitive edge in service sectors between China and Korea, and finds that there is complementarity in tourism, transportation, other commercial service, finance, governmental service, computer and information and communication sectors between China and Korea, the complementarity in these sectors is comparatively strong except for communication sector. It also shows that two nations do not have the obvious competition in construction sector and are disadvantageous in other sectors. Therefore, China should further promote service trade with Korea, especially focusing on promoting the strong complementarity sectors between China and Korea.