Research On Economic And Trade Effects Of Establishing Sino-Korea Free Trade Zone

With the rapid development of economic globalization and regional economic integration, the economic of most countries are becoming more cooperation and integrated. In this background, the economic and trade becoming more and more integrated in East Asia, especially between China and Korea, the voice of quicken region cooperate is increasing high. On this background, the government of China and Korea advance to establish the Sino-Korea Free Trade Area (shorted for Sino-Korea FTA). In March of 2005, the National School of Administration and KIEP had began the feasible study of Sino-Korea FTA.The focus problems needed to be solved are whether there is feasible to setup Sino-Korea FTA and how about the economic and trade influence on China after Sino-Korea FTA has set up, so, on the basis of theoretical frame ,this Paper has an empirical study on the made effect of Sino-Korea FTA. This paper can be divided into five sections including six Chapters.Section one is the introduction of this Paper. It introduced research background, primary content, train of thoughts and the actuality of research in home and abroad.Section Two, on the basis of the Customs Union Theories, the FTA welfare Theories, the Intra-Industry Trade Theories and so on, is the theoretical frame of establishing Sino-Korea FTA, which makes essential foreshadowing for the followingstudy.Section Three analyzes the feasibility of Sino-Korea FTA. Form the aspects of trade, investment and the structure of commodity, this Section sum up the whole trends of economic and trade situation from 1992, and reveales the increasing complementarity in Sino-Korea FTA. In addition, this Section demonstrates that there is more compensation than economic competition between China and Korea through analyzed and compared of manifest superiority index and trade comparative index between China and Korea. At last, we get the conclusion that there is a steady realistic foundation in Sino-Korea FTA and Sino-Korea FTA is feasible.Section Four is the key of this Paper, analyzes how the setup of Sino-Korea FTA will influence Chinese economic and trade form the view of Inter-Industry, through measured with a mathematical model, calculated, compared and analyzed the Intra-Industry trade index, and reached a conclusion that the primary trade form is Intra-Industry trade, furthermore, this form will strengthen in the further between China and Korea. It carved up the Intra-Industry Trade for vertical trade andhorizontal trade, and offers a point that Intra-Industry Trade made a leading action in the trade in despite of vertical Intra-Industry occupying a large proportion.Section Five gives policy advices for China, giving the countermeasure of how to developing Intra-Industry of China, how to attracting Korea's investment, how to improving industry structure, how to solving friction of trade appropriate, how to maintain the balance of trade and how to strengthening cooperate and communion between China and Korea.