earticle

영어

With the rising complexity of the global economic environment and international relations, countries all over the world have been looking for new development ideas. The mode of regional economic development has become an indispensable strategy for the economic development of Korea and China. In this context, The China-South Korea Free Trade Agreement was reached, the provisions of which deal with a wide range of trade issues such as specific countries that are covered by the agreement, quantity, and scope, permitting the largest degree of freedom. Based on the establishment of the China-South Korea FTA, this paper explores the economic effect of the Korea-China FTA on the bilateral trade, based on trade intensity calculation and a gravity model simulation, and formulates scientific and reasonable countermeasures based on research findings. The empirical analysis conducted in this research finds the following: the large amount of trade between the two countries is closely related to the level of the economic development (GDP) of the two countries. Most of all, the distance between the two countries, the per capita GDP of the two countries and whether FTA is established all affect the trade volume. While the distance between the two countries has a negative correlation with the trade volume, the other variables have a positive correlation. From this analysis, we draw several policy suggestions, focusing on how to resolve trade disputes between Korea and China, to further promote comprehensive cooperation, to accelerate the structural adjustment of industries, and to promote bilateral trade. Hopefully, the findings and policy suggestions from this study may contribute to the sustainable development of the Korea-China FTA.