An Analysis On Economic Effects And Feasibility Of The Establishment Of China-South Korea FTA

It is based on such a consideration, this paper want to resolve the main issues: the economic effects and prospects for development after the establishment of China-South Korea FTA; and how about the feasibility of the establishment. Basing on the construction of the theoretical framework and the analysis model, the paper researches the economic effects and feasibility of China - South Korea Free Trade Area. It has six chapters, divided into five parts.The first part is Chapter 1 article "Introduction", it focuses on the background of the study, the purpose and significance of the topics; the basic content and framework, as well as the article's methodology, innovation and lacking. The second part is Chapter II, introduces the theory about the Free Trade Area, including customs union theory and theory of intra-industry trade; Intra-industry trade theory, introduces its development, assumptions and basic viewpoints.The third part is chapterⅢ, the introduction of the Tinbergen trade gravitational model of the effect of the establishment of a free trade area to do empirical analysis, The results of the analysis showed that an FTA between the two countries is feasible. The forth part contains chapterⅣandⅤ, specifically analysis the feasibility and economic effects of establishment of China - South Korea FTA. Economic effects, include both positive and negative effects; positive effects includ increaseing the overall welfare of the two countries, having a significant effect on the investment and trade, can upgrade the industrial structure, and helpful to the economic integration of East Asia; negative effects contain that inconsistencies have led to the level of economic cooperation inefficient,China's processing trade affected and the two sensitive industries will be suffered. The feasibility includes favorable conditions and adverse conditions, Favorable conditions include: theoretical support, the two countries have a positive attitude, the two industries are complementary, the two countries geo, humanities, and the requirements of external strategy and good political and diplomatic relations; constraining factors include: the international market impact on the trade, imbalance between the two countries intensified, the two countries tariff and non-tariff barriers, and increasing competition in the two countries.The fifth part is Chapter VI, is the policy recommendations about establishment of China-South Korea FTA, Mainly deficit reduction measures to reduce friction measures to attract investment measures and strengthening bilateral economic and trade cooperation.