| China and South Korea are important economic partners in Northeast Asia with thegeographical proximity and similar cultural. Trade cooperation between China and SouthKorea develop rapidly after establishing diplomatic relations, with trade volume growingrapidly, and being optimized structure. After the financial crisis, China, Japan and SouthKorea has start the process of establishment of a free trade zone. Free Trade Area researchhas been completed, and they will enter into negotiations in2012. There is an importantsignificance in Analyzing China and South Korea’s industrial competitiveness andcomplementarity based on the rules of the FTA negotiations to promote and FTA.This thesis studied the inter-industry competition between China and South Koreaby taking advantage of the revealed comparative advantage index, the complementarynature by the complementarity index and the use of intra-industry complementarity byintra-industry index.The conclusions of the study are:(1) China has an advantage in theresource-intensive and labor-intensive industries, Korea has an advantage in capital-andtechnology-intensive industries; industries are more complementary than competitive.(2)Inner-industry are complementary highly (3) Chinese capital-and technology-intensiveindustrial competitiveness enhanced, labor-intensive industries lose competitiveness; freetrade area negotiations is more difficult than five years and ten years ago (4) Reasons ofindustrial competitiveness and complementarity include differences between the twocountries in natural resources, labor costs and technological level; intra-industry trade ismainly caused by the increase of direct investment from Korea to China and China incomelevels.(5) In the long term, the industry of China and South Korea will change from beingcomplementary to being competitive, free trade area negotiations will be more difficult.This article suggests that the to establish a free trade zone, as soon as possible;atransitional period for the agricultural products will be needed and to maintain and improveindustrial competitiveness of China through industrial transfer and technologicalinnovation. |
