An Empirical Study Of The Trade Relations Among China, Japan And South Korea

Economic globalization and regional economic integration has become a significant trend in worldwide economic development in the post financial crisis period, while regional economic integration means simplified trade mechanism in each country of the region and accelerated goods circulation, which benefit production elements’ transnational movements such as trade and investment.Many regional free trade agreements have been signed, such as European Union, North American Free Trade Agreement, Mercado Commun del Sur, La Comunidad Andina, ASEAN Free Trade Agreement and The community of West African States, where members expect gain in trade and economic growth by regional economic integration.However, when it comes to North East Aisa,China, Japan and South Korea have not establish substantial regional economic cooperation relationships as the major economies there. With their trade and economic relationships associated persistently deeper, the trilateral trade and economic coopreation mechinanism urgently needs to change for achieving tripartite algether wins.This paper systematic analyzes the regional trade statistics of China, Japan and South Korea in the preiod 1987-2013, on the basis of related research, and discussed the following issues: Firstly,this paper analyzes the realistic basis of trilateral trade and economic cooperation according to their present trade conditions and industry complementarity, where it is believed that trades between China and Japan, China and South Korea are complementary while trades between Japan and South Korea are competitive. Secondly, this paper empirially studies their trade interdependence among these three countries by VAR model, and finds out that China is playing its role as a birdge to contribute to expand trade between Japan and South Korea. Thirdly, the paper examines the trend and reasons of economic interdependence of these three countries by using indicators of trade interdependence between each two countries, and makes advices on promoting trilateral trade and economic cooperation. Finally, this paper looks forward to the prospect of trade trend among these three countries and provides strongly strategic evidence for promoting China’s participation in efforts to rebalance the world economy.Under the situation that regional economic integration boom rapidly in the post financial crisis preiod, it is necessary to give a deeply study in order to effectively promote the construction of China’s regional economic integration, actively establish a betwork of regional cooperation dominated by China, select the strategic partner of regional economic integration and ultimately construct China’s regional economic integration strategy, which also has important research value and practical significance.