Research On Intra-Industry Trade Between China And Korea

Intra-Industry Trade (IIT) is the simultaneous export and import of products within the same industry. This dissertation investigates the levels of IIT between China and Korea, and empirically tests models of IIT to identify the influential factors, and finally gives suggestions to the enterprises in China.Firstly, the dissertation shows that, the levels of IIT in Manufacture industries are comparatively higher than average, and the levels of IIT in materials industries are continuing increasing, which approves that China is facing the industry adjustment. Secondly, the factor analysis shows that product differentiation and scale economy are positively related to IIT, and the market structure's influence depends on industry, which is to say, in the labor-intensive industry, more enterprises means higher IIT, however, in the capital-intensive industry, less enterprises means higher IIT. Meanwhile, models didn't find out any significant relations between Korea FDI and IIT.Given the importance of IIT between China and Korea, China needs to adopt domestic policies that can actively promote IIT. Special trade agreements should be considered to improve the potential IIT with Korea.