Bilateral Trade Type

Since Korea and China established the diplomatic relation in 1992, two countries have made great progress in the field of economic cooperation, including bilateral trade, investment and laboring cooperation. But, there are serious imbalance trade between China and Korea. The adjustment of trade pattern can resolve these problems. Therefore the bilateral trade study has theoretical worth as well as realistic worth. The improvement of Intra-Industry Trade has the crucial meaning for imbalance trade.Intra-Industry Trade is the simultaneous export and import of Products within the same industry. The dissertation investigates the levels of Intra-Industry Trade between China and Korea, and empirically tests models of IIT to identify the influential factors, and finally gives suggestion.The dissertation shows that, the levels of IIT in Manufacture industries are comparatively higher than average, and the levels of IIT in materials industries are continuing increasing, which approves that China is facing the industry adjustment. Secondly, the factor analysis shows that differentiation and scale economy are Positively related to IIT, and the market structure's influence depends on industry.Given the importance of IIT between China and Korea, needs to adopt domestic Policies that can actively Promote IIT. Special trade agreements should be considered to improve the Potential IIT with Korea.