China And South Korea In The Process Of Economic Integration In East Asia Free Trade Area Of ​​study

Since the 1990s, with the rapid development of economic globalization and regional economic integration, lots of regional economic integration organizations have been arising all around the world, and the competition between countries has gradually developed into the competition between regional economic integrations. However, as the area which owns the fastest economic growth rate and largest population of the world, there is still no unified organization of regional economic integration formed in East Asia yet. The result of this situation brings two negative impacts to this area. The one is East Asian countries cannot take part in the international competition advantageously, and the other is this is not good for the economic development and the world economics status enhancement of East Asian countries. Under these circumstances, some East Asian countries start to establish regional economic integration organizations in order to enhance their economics status and competitive ability in the world. However, since there are some negative political and economic factors available in East Asia, the progress of East Asia economic integration is extremely slow.At the same time, the economic and trade relationship between China and Korea has become very close. The voice of accelerating the inner system cooperation in both of these two countries appears unceasingly. Since China and Korea established diplomatic relations in 1992, the trade between these two countries has kept very strong growth trend. The profits of bilateral trade increased from 50.3 hundred million US dollars to 1343.1 hundred million US dollars from 1992 to 2006. In recent years, Korea invests more and more capital in Chinese market. From 1992 to 2005, the amount of investment has increased from 1.2 hundred million US dollars to 51.7 hundred million US dollars; the proportion has increased from 1.1% to 8.6%. Now Korea is the third largest trading partner of China, only being inferior to Japan and the USA, and China is also the third largest trading partner and the second largest investment targeted country of Korea as well. During the China and Korea economic cooperation forum, Mr. Bo Xilai, the minister of Chinese department of commerce explicitly expressed that China is willing to promote the construction of China-Korea Free Trade Area (China-Korea FTA). The reason why the economic and trade relationship between China and Korea develops very rapidly, it is because that they are not only close neighbors, have similar history and culture, but also have very strong complementarity on economy, and also have the uniformity on regional safety questions. In addition, the economic strength and international standing also drive China-Korea economic and trade relationship developing very fast and healthily. Now both of China and Korea are facing the same competitive pressure from other regional economic cooperative organizations, under this situation, both of them are hoping to establish China-Korea FTA. However, some restrictions cannot be ignored in the process of establishing China-Korea FTA, such as the trade gap and trade barrier between China and Korea, and so on. Therefore, it is obvious that in the process of establishing China-Korea FTA, there are not only advantages but also some restrictions available. However, these restrictions can be eliminated by China and Korea together. Therefore, it is necessary and feasible to establish China-Korea FTA.Both China and Korea are located in East Asia, so the establishment of China-Korea FTA certainly will affect East Asia economic integration a lot, both positive impact and negative impact. On the one hand, The establishment of China-Korea FTA will accelerate the progress of East Asia economic integration and the establishment of East Asia cooperative organization; but on the other hand, it will also form trade barrier between China-Korea FTA and other East Asian countries, which will aggravate the imbalance of East Asia regional economics development, and enlarge the difficulties about having a dialogue or negotiation between countries. All in all, now the world is in the tendency of regional economic integration, so the positive impact of China-Korea FTA is more important. Therefore, the establishment of China-Korea FTA will bring more advantages than disadvantages to East Asia economic integration.Under these circumstances, China should take some relevant measures, especially for those problems which stop the development of China-Korea economic relationship, such as the trade gap and the trade barrier. Only through this way, China-Korea FTA would be established as soon as possible, and will bring profits for both of these two countries. Section One introduces the theory frame of this paper; Section Two summarizes the progress of East Asia economic integration, and analyses the benefit which East Asia economic integration will deserve from the establishment of China-Korea FTA; Section Three is the important part of this paper, it analyses the necessity and feasibility of establishing China-Korea FTA, and states that China-Korea FTA is feasible; Section Four studies the relationship between China-Korea FTA and East Asia economic integration, and analyses how China-Korea FTA will impact East Asia economic integration from positive and negative aspects respectively; Section Five is the last section of this paper, it gives some suggestions to Chinese government and enterprises.