Chinese Spicy Vegetable Export To South Korea

The Regional Free Trade is being done actively all across the world. As China has pushed through FTA aggressively, the trade liberalization in North-east Asia has been expanded and the FTA agreements between China and South Korea has been signed in 2014 after a long period of studies and preparation. It’s not very easy for China to build a complementary relationship with Korea through trading due to the geographic proximity and similarities in consumer preferences, cultures, and agricultural production structures. Most of Chinese agricultural products are exported to Korea as one-way trade based on high price competitiveness. However, there should be an effort to grasp strengths and weaknesses for competitive trade rather than to maintain the present situation in a defensive and easy way.This research surveyed chili market trends both in China and Korea by choosing chili among seasoning vegetables and studied China-Korea FTA agreements and the potential for change. In addition, the research analyzed competitiveness of China-Korea chili trade through TSI(Trade Specification Index) and MCA(Market Comparative Advantage),and factors affecting on chili export by regression analysis. After the competitiveness analysis, Chinese chili market definitely has a competitive advantage over Korean one. The regression analysis indicates that there is a significant relationship between China’s chili export and Korea’s Chili production. Chili was excluded in the concession list of FTA, but considering that non-tariff barriers are being eliminated more and more and Korea’s chili supplies are not sufficient because of continuous decrease in production, chance to export goods to Korea will increase. On the other hand, there can be obstacles to chili export, including concerns that a rise in production costs weakens the price competitiveness, distrust of quality and safety of Chinese agricultural products, and Korea’s protectionist policies. Therefore, China needs to improve quality and safety of the products and keep doing the research to strengthen the purchasing power of Chinese seasoning vegetables. Chinese government also should promote the export support plans to build the infrastructure for export. These efforts will contribute not only to stabilizing farming income but to developing China’s rural economic system.