Analysis of Trade Structure in Car Industry between Korea and China

This research understand both 2 country’s trade structure to strengthen Korea-China economic cooperations and examine trade drawback to analyze causes which affect trade and by its improvement direction, find out way of trade expansion. As Northeast asian countries are geographically adjacent to Northwest coast of Pacific ocean, in case economic cooperations are intensified, transportation & communication costs could be diminished as well as transaction cost caused by economic exchanges could be minimized. In order to analyze trade decision factor of both 2 countries, Index of trade intensity invented by trade intensity theory(Kruger, A.O.1997) is used to analyze it. Even though specific factor should be materialized in terms of analysis of trade decision factor, realistically, concreted explanations are difficult as there are so many unsolved factors and its diversifications. Therefore, this research focus on reviewing trade structural factors and external trade structural factor of trade decision factor’s analysis, namely, time-series analysis is efficient. First, these Index of A value/ B value means Korean against Chinese market share/Korean against world market share, of which is comparative market intensity. Second, So, Korea is taking comparative advantage of export specialization and on the contrary, China is taking comparative advantage of import specialization respectively. Third, RCA indexes are considerably improved compared to that of 2000. However, still as RCA indexes are much smaller than +1 means Korea is in a position to comparative disadvantage against China compared to those of other industries. This research is analyzed by quantitative measurement with trade intensity theory, trade specialization and revealed comparative advantage index to see how inter-trade relations are changed between Korea and China during past 10 years(2000, 2005, 2012). Through this survey of time series, we can figure out structural factor of trade dependence relation