Analysis the bilateral trade of China and South Korea as well as the benefits and costs of establishing FTA

In April 2007, Chinese Premier Wen Jiabao officially visited South Korea and made the negotiation of establishing free trade area (FTA) as a priority. Establishing FTA and realizing the trade´ liberalization and integration is an important measure to further enhance the bilateral trade relation between China and South Korea. This thesis started from the status of Sino-South Korea trade, studied reasons of China producing trade deficit and favorable conditions of establishing FTA between China and South Korea, deeply analyzed benefit situations and cost situations, for example, trade effects of Sino-South Korea establishing FTA, playing two countries´ comparative advantages and promoting the mutual investment, but establishing FTA will bring bad impacts to some industries in China and South Korea, at last, this thesis made recommendations for establishing FTA between China and South Korea.