Impact of COVID-19 on Korea-China Import and Export Trade and Countermeasures

ABSTRACT

Purpose – This paper empirically investigates the changes and trends in export and import trade between Korea and China since 2000, especially after the establishment of Korea-China FTA and since the outbreak of COVID-19. This paper uses empirical analysis to determine the future trade types and trends of import/ export trade between Korea and China and estimates the impact on import/export trade between Korea and China in the post-epidemic era. Design/Methodology/Approach – This paper first reviews the theories related to regional economic inte-gration, sorts out the process of Korea-China FTA, and summarizes the changes and trends in import and export trade since COVID-19;second, it analyzes the current situation of bilateral trade between Korea and China using quantitative analysis, and investigates the specific impact of COVID-19 on Korea-China import and export trade using empirical analysis;finally, it summarizes the above studies, a conclusion is drawn, and policy recommendations are made to better utilize the challenges brought by COVID-19 to effectively address the problems that may be encountered in Korea-China trade and to promote the development of bilateral trade between the two countries. Findings – The global spread of the epidemic in Korea and China has led to the shutdown of both domestic and foreign operations, resulting in a foreign trade cliff effect in the short to medium term;the trade creation effect inspired by the international system dividend is no longer available in China in 2020, and the trade in goods is diminishing at the margin;the trade suppression effect is generated by the rise of international trade protectionism. The epidemic has led to a large upstream supply shortage pressure on the electronic information industry and the automobile manufacturing industry, and a large downstream demand shortage pressure on the energy industry and the electronic information industry. Research Implications – The establishment of Korea-China FTA will significantly promote bilateral trade between the two countries, change the trade and industrial structure of the two countries, and help to promote the development of the FTA strategy of the two countries;the outbreak of COVID-19 has changed the trade pattern and type, and the import and export of related epidemic prevention products as a new trade growth point and strengthened the trade market relationship between Korea and China. © 2022 International Academy of Global Business and Trade. All rights reserved.