Research On China-Korea Service Intra-industry Trade’s Influential Factors

The global economic integration, and the rapid development of high-tech and the internet promote the increasing of the level of trade in services speedily. Cross-border trade in services has become an important point of national economic growth. As an emerging industrialized countries Korea becomes important trade partners with the world’s largest developing country China, and intra-industry trade has become the main trade pattern of trade between the two countries. What’s the development level of services intra-industry trade between South Korea and China? What factors influence the services industry trade of China and Korea? Questions like these have important significance of inquiry.Under the background of promoting the construction of free trade area in China and Korea, this paper studies China-Korea services intra-industry trade’s level and its influence factors by the empirical research, which has a realistic significance to promote exchanges and cooperation between China and South Korea in many fields such as politics, economy, trade and humanities to maintain the sustainable growth of bilateral economic and trade. Firstly, it summarizes the domestic and foreign literature of the intra-industry trade and services intra-industry trade. Followed by analysis of the China-Korea trade in services situation, and through the GL index and the MIIT index the static and dynamic level of service intra-industry trade were estimated. The results show that prone of the service industry in China-Korea is at the middle level of the state and in the small amplitude fluctuations continuously. Among them, the prone of transport, tourism and communications services intra-industry trade is higher, and insurance services and government services’intra-industry trade level fluctuates a great deal, and the others are at a low level. Then, it has a detailed analysis of its impact on theoretical mechanism based on the list of previous summary analysis of the main factors that affect service intra-industry trade. At the same time, taking into account the availability of the data and the particularity of the service industry, it to do the empirical analysis by selecting capita income difference, intensity of trade in goods,, trade imbalance, the national scale, industrial structure, human capital investment, economies opening degree, direct investment in China and Korea won against the RMB exchange rate as the explanatory variables for empirical analysis, to determine the final impact factors of China-Korea services intra-industry trade. The empirical results show that:the level of per capita income differences, Korea’s direct investment in China, trade imbalance and economies of scale are the most significant factors affecting the service industry between China and Korea. Differences in per capita income levels and trade imbalance have a negative impact on the level of service intra-industry trade, Korea’s direct investment in China and economies of scale have a positive impact on the level of service intra-industry trade. Finally, by the results of empirical studies it draws major conclusions and puts forward relevant policy suggestions to promote the development of China-Korea trade service industry from the Chinese perspective.