Research On Competitiveness And Complementarity Of Sino-Korea Trade

In 1992, China and South Korea established diplomatic relations which has promoted the development of economy and trade cooperation between the two countries. Currently, China has become South Korea's biggest trading partner and the largest investment destination. Meanwhile, South Korea has become China's fourth largest trading partner and third largest source of imports. According to the statistic data from UN Comtrade, the bilateral trade volume of Sino-Korea has increased from $5.03 billion in 1992 to $290.44 billion in 2014, rising nearly 57 times. In May of 2012, China and South Korea formally launched negotiations on establishing Sino-Korea free trade area. And until February 25 of 2015, both China and South Korea had signed the full text of the draft and had confirmed the content of the agreement. So far, the negotiation on establishing Sino-Korea free trade area has already completed. On June 1 of 2015, China and South Korea officially signed the free trade agreement, marking the accomplishment of system design. Recently, Sino-Korea free trade area is about to enter the implementation phase. Based on such background, the research on competitiveness and complementarity of Sino-Korea trade has important theoretical and practical significance which can both further promote the progress of Sino-Korea free trade area and regional economic cooperation in Northeast Asia.The paper researched the competitiveness and complementarity of Sino-Korea trade adopting combination of quantitative analysis with empirical analysis. And the paper also made recommendations on how to further promote Sino-Korea trade using qualitative analysis with normative analysis. The thesis consist of five parts except for the introduction and conclusion. The first part of this paper defined the concept of trade complementarity and competitiveness, and combed the related basic theory. The second part, on the basis of analyzing the development progress of Sino-Korea trade, analyzed the current situation of Sino-Korea bilateral trade using the trade volume, the structure of imported and exported goods and trade dependence through the collection of information and data. In the third part of the study, the paper studied the competitiveness of Sino-Korea trade using the product similarity index, market similarity index, revealed comparative advantage index and trade competitiveness index. The fourth section briefly analyzed the complementarity of Sino-Korea trade both from the inter-industry trade perspective and from the point of view of intra-industry trade. And in this part, the influence factors of Sino-Korea intra-industry trade were studied by regression analysis and granger test of causality. Finally, based on the above analysis, the paper summarized the current trade problems between China and Korea, such as serious trade deficit between China and Korea, unreasonable product structure, fierce competition in international trade and intra-industry trade imbalance. Finally, the thesis also made recommendations to promote the sustainable development of Sino-Korea trade and provide theoretical support to further promote the building of Sino-Korea FTA and the regional economic cooperation.