The Complementary Trade Structure between China and Korea and the FTA Effect in a Panel Gravity Model

Purpose the purpose of this study is demonstrating the potential of trade between China and South Korea by analyzing the trade structure and China-South Korea Free Trade Agreements. Design/Methodology/Approach By analyzing the respective RCA and TCI of the two sides to demonstrate that the trade structure between China and South Korea is complementary to each other based on their respective advantages. Then, based on the gravity equation, analyze the promotion effect of China-South Korea Free Trade Agreement on bilateral trade value. Findings Firstly, the trade structure between China and South Korea has complementary advantages. Secondly, the free trade agreement can promote trade value. Research Implications In the management of this paper, this study uses the latest data to conduct empirical analysis on the trade structure and the effectiveness of the free trade agreement between China and South Korea, which proves that there is a lot of room for cooperation between the two countries.