Study Of The Trade Deficit Between China And Korea

China and South Korea are more active economies in the world.The development of economic and trade relations between China and South Korea plays a vital role in the stable operation of the world economy.The development of the economic and trade relations between China and South Korea plays a vital role in the stable operation of the world economy.Since the establishment of diplomatic relations between China and Korea,the import and export trade between the two countries has increased rapidly.With the development of trade between China and Korea,the trade imbalance between China and Korea is also becoming more and more serious.In 1992,the trade deficit between China and Korea was 218 million dollars,while in 2017 the trade deficit between them was close to 75 billion US dollars.The long-term huge trade deficit is bound to affect the economic and trade relations between China and South Korea,which will adversely affect the long-term economic and trade development of the two countries.This paper,starting with the theoretical analysis,finds out the changing trend of trade deficit through the study of the trade development of China and South Korea.Through the analysis of the categories of trade goods between China and South Korea,we find out the causes of the trade deficit,in order to improve the trade deficit situation and promote the better development of the import and export trade of the two countries.The trade deficit of China andSouth Korea has taken on a long time,and the counter balance of trade exceeds the large proportion of China's trade deficit and trade deficit in South Korea.China's accession to WTO accelerated the development of trade between China and South Korea in 2001.Meanwhile,the trade deficit also began to accelerate.The division of labor between China and South Korea has an important impact on the trade deficit.In the early period of the establishment of diplomatic relations,the differences in the level of economic development,the level of science and technology and the difference of resource endowments between the two countries made the industrial division of the two countries distinctly different,and China's industrial competitiveness was obviously weaker than that in Korea,making China inferior to Korea trade.In recent years,despite the upgrading of China's industrial structure,the overall industrial competitiveness has improved,the trade structure has been significantly optimized,but in the technology intensive industries such as mechanical electronics,South Korea still occupies the advantage.Through the analysis of the trade structure of China and South Korea in-2017 in 1992,it can be concluded that the trade of agricultural products and mineral products has reduced the trade deficit,and the iron and steel products have a great impact on the trade deficit,and the trade in mechanical and electronic products is the main source of the trade deficit between China and Korea.Meanwhile,Korea's direct investment in China also affected the trade deficit between China and South Korea.South Korea invested direct investment in China andinvested in China.Its parts and equipment need to be imported from South Korea,which led South Korea to export to China,and Korean enterprises mainly engaged in processing and assembling industries,imported raw materials from South Korea and processed exports to Europe and the United States from China's rich labor resources.As countries and regions,the products are seldom sold back to South Korea which exacerbates the trade imbalance between China and Korea,the status of.In the face of the trade imbalance between China and South Korea,this paper puts forward some suggestions to reduce the trade deficit between China and Korea,mainly by strengthening the investment of the state to the high-tech industry,improving the competitiveness of the domestic industry as a whole,accelerating the elimination of backward production capacity and adjusting the structure of the Korean trade.Guide Korean enterprises to increase the purchase rate in China and give full play to the role of FTA in China and Korea.Through the analysis of this system,I believe that the healthy development of trade between China and Korea is in line with the bilateral economic interests of China and Korea.China can gradually increase its market competitiveness by upgrading its own industry and gradually reduce its trade deficit with Korea.