An Analysis on Trade Structure between China and Korea

This study analyses the trade structure between China and Korea for the last ten years, focusing on intra and inter-industry transactions. It finds the following observations. First, massive increase in their trade volumes stems mainly from the manufacturing sector and is more attributable to intra-industry trade than inter-industry one. Second, the vertical intra-industry trade differentiating regarding qualities and prices of goods plays an important role rather than the horizontal one. Considered that an intensity difference between countries is one of the major determinant factors in the vertical intra-industry trade, these findings suggest that the observed high trade volumes in intra-industry reflect on the inter-industry trade properties driven by factor intensity differences.