Analysis of the Influential Factors of Manufactured Products Intra-Industry Trade between China-South Korea and China’ Policy

In recent years, the trading contact between China and South Korea has become more and more close. In the 21st anniversary of the establishment of diplomatic relations between China and South Korea 2013, China has become South Korea’s largest export market and largest import market. At the same time, South Korea has become China’s fourth largest exporter and second largest importer of foreign trade, which contributes to the rapid development of manufactured products intra-industry trade between China and South Korea. This paper summarizes the development status of industrial manufactured products intra-industry trade between China and South Korea since 1992, and uses empirical analysis, then drawing a conclusion that the direct investment from South Korea to China, total merchandise trade between China and South Korea, and the economic development level of China have great influences on the level of intra-industry trade between China and South Korea, but the degree of the influence is different for different types of manufactured goods. Finally, this article proposes policy recommendations to promote the further development of manufactured products intra-industry trade between China and South Korea.