Incheon-Qingdao Intercity Network and Implications for Building a Trans-border Region

The Incheon-Qingdao (including Seoul metropolitan-Shandong) intercity network has flourished through geographical proximity and economic complementarities since the opening of the Chinese border in 1992. However, the inter-city relationship characterized by the exploitation of the difference in factor prices over the border has recently begun to see signs of trouble as the Chinese government implemented policies to tighten labor and environmental regulations. The paper deals with the ups and downs of the Incheon-Qingdao intercity network and draws some policy implications for the future development of the trans-border cooperation.