The Empirical Analysis Of The Trade And Investment Integration Between China And South Korea

China and Korea which cultural background are very similar, have long histories of exchanges and both countries have a solid foundation for economic and trade. Particularly, after China and Korea established diplomatic relations in 1992, China—Korea trade has developed rapidly, Korea companies investment in China have gradually increased, while foreign direct investment and international trade as the most important international economic activities of the two forms, the process of economic integration in the word, the cross-integration trend has become increasingly apparent. Trade between China and Korea have been expending, and Korean investment in China has also increased rapidly with today's economic globalization and China's further opening up, so China-Korea research also helps scientific grasp on economic and trade relations between China-Korea.Korea's accumulated direct investment in china amounted to 26.328 billion dollars as of 2008, while China's accumulated direct investment in Korea amounts to only 1.214 billion dollars as the end of 2007, and compared to Korea's direct investment in china. China's direct investment in Korea is very poor, so Korean investment in china as the factors of affect China-ROK trade in paper. This paper selects China-Korea trade data and Korea's direct investment in China data, uses coordination theory, linear regression estimation methods and other modern measuring methods analyzing relationship between China and Korea trade the Korean investment in China. The result is that the long run, the Korean investment in China and China-Korea trade have relationship and it is positive correlation, and show that there is integration phenomenon between China-Korea trade and Korean investment in China. This paper reviews the relevant theory between international trade and international investment as later laid a theoretical basis for empirical testing. This paper select theoretical analysis and empirical analysis, qualitative analysis and qualitative analysis as research methods, uses the data from 1992 to 2008 to analysis the relationship of China-Korea trade and Korea investment in China, focus on correlation analysis of Korean investment in China and China's export trade to Korea, Korean investment in China and China's import trade to Korea. The final presumed incorporate phenomenon of Korean investment in China and China-Korea trade. Then this paper analysis causes of the incorporate phenomenon of Korean investment in China and China-Korea trade. Finally, this paper makes policy recommendations according to the current situation between China-Korea trade and Korea's direct investment in China.