Research On The Economic Effect Of Constructing Sino - Korea Free Trade Area And Its Countermeasures

In recent years, China and South Korea has made rapid development in bilateral trade, investment, industrial cooperation and other fields and has also made remarkable achievements in tourism, environmental protection, personnel exchange, etc. The development of bilateral economic and trade relations have a broad prospect. Today’s world has just gone through the global financial crisis and in the context of global slowdown in the major economies, China and South Korea further expand economic and trade cooperation fields and deepen economic and trade relations so as to eventually build the China-ROK Free Trade Zone, which is in line with fundamental interests of the two countries and has a positive meaning in improving the well-being of peoples in the two countries and promoting peace and development in Asia and the world.But economic and trade relations between China and South Korea also faces many problems. Increasingly competitive market, highly unbalanced trade development, unceasing trade friction, serious trade protectionism aggravated by the effect of historical factors and differences in national institutions and ideologies bring many difficulties and challenges to sustainable development of economic and trade relations between the two countries, which is not conducive to building a free trade zone between the two countries.In order to resolve trade disputes between China and South Korea, and provide countermeasures and suggestions for building the China-ROK Free Trade Zone, this paper did plenty of research. First of all, this paper analyzes the current type and characteristics of a free trade zone in order to lay good theoretical basis for building the China-ROK Free Trade Zone based on comparative advantage theory, factor endowment theory, customs union theory, intra-industry trade theory and other basic theories for free trade zone. Then, it analyzes static and dynamic effects generated by building China-ROK Free Trade Zone as well as the impact on the surrounding relations through the research on China-ROK trade development status and China-ROK trade characteristics. On the basis of what is stated above, this paper carries out SWOT analysis to the construction of China-ROK Free Trade Zone to summarize the strengths, weaknesses, opportunities and challenges of building the China-ROK Free Trade Zone. Finally, based on a large number of researches, this paper draws out the conclusion that it is feasible to build a China-ROK Free Trade Zone and countermeasures and suggestions are put forward for the early and late stages of the preparations and implementation process of building the China-ROK Free Trade Zone.