Comparative Analysis On The Development Of Bilateral Trade Between China And South Korea

A long time ago,China and South Korea have very close relationship in various aspects, such as political,economic,culture and so on. Especially after1992,when the trade model transformed, the trade scale expands unceasingly. The closer trade relations and the conditions of the differences between China and South Korea in resource endowment advantag e, which make the two countries have a strong complementarity in trade. Trade prospects are very optimistic for both China and South Korea. To promote the trade and maintain more orderly and healthy development of trade, we must study the development of bilateral trade.At first, this paper studies the background and significance of the trade, then, I make an analysis about recent 14 years data studying the present situation of the development of the bilateral trade, the bilateral trade development situation is good, the development potential is huge. After using the trade complementary index and the index of industry inner trade and revealed comparative advantage index to analyze the competitive and complementary of the bilateral trade, I find that the bilateral trade is in the state of both competitive and complementary. But the complementary state is more obviously. As China’s economic level improves and science and technology develop, competitive trade begins rising. Through studying GL index, we can see that the bilateral trade dependence is stronger. Above all the analysis, we have the problems: the unbalanced bilateral trade structure, the huge trade deficit problem and the bilateral trade friction problem. To solve these problems, we need to enhance China’s export product technology and to balance the product structure of the bilateral trade. The trade pattern needs to transform, and we need to increase Korea’s direct investment to solve the problem of China’s trade deficit. Under the China and South Korea free trade agreement, we can use the free trade rules to reduce trade friction, to promote the development of China and South Korea trade.