Research On The Economic Effects And Establishing Measures Of The China-Korea Free Trade Zone

In recent years, China and Korea have achieved rapid development in many fields, such as bilateral trade, investment, and industrial cooperation. Both countries have obtained proud achievements in traveling, environment protection, and staff interactions. The development of economic and trade relationships between the two countries have extensive prosperity. Global economies grow slowly after global financial crisis, but China and Korea's economic and trade cooperation strengthen economic development. Establishment of the China-Korea free trade zone affords fundamental benefits to the two countries, which in effect has positive influence in boosting peace and development of Asia and world.However, the establishment of a China-Korea free trade zone potentially encounters many problems. The fierce market competition, extreme trade development imbalance, constantly trade friction, severe trade protectionism, impact of historical factors, gaps in national regulations, and different ways of thinking make the sustainable development of economic and trade relationships between two countries challenging.This research studies the relationship between China and Korea, and provides recommendations and measures for establishing a China-Korea free trade zone. First, this paper analyzes the existing free trade area according to comparative advantage theory, Heckscher-Ohlin theory, tariff union theory, and intra-industry theory, which have made theoretical basis for establishing China-Korea free trade zone. Next, I analyze static and dynamic economy effects generated by the establishment of a China-Korea free trade zone and the impacts on bilateral relationships through study of the present status China and Korea trade developments. On the basis of which, this paper caries out a SWOT analysis on the establishment of a China-Korea free trade zone. In addition, I summarize the advantages, disadvantages, opportunities, and challenges, of establishing a China-Korea free trade zone. Finally, this paper concludes that the establishment of China and Korea free trade area is feasible, and puts forward recommendations and measures for the preparation and execution processes of establishing a successful China-Korea free trade zone.