Finance of International Trade

SUMMARY

Export Relationship Among China, Japan and South Korea

Over the past two decades, especially since the normalization of diplomatic relations between China and Korea in 1992, trades between China, Japan and Korea have been active and significant. China maintain a large comparative advantage in labor – intensive products. While Japan and Korea maintain a large comparative advantages in capital – intensive products. Japan competing with South Korea in terms of exports but not with China. From 1992 to 2003, China’s exports to Japan increased, import from Japan increased Korea’s exports to China increased and Imports from China increased. Japan is China’s largest trade partner. In 2003, China become the largest export destination for Korea and Korea’s trade surplus with China. Japan remains the largest source of Korea’s imports. It is important to further examine the trade patterns and relationships between the three nations. Examine trade patterns and relationship of China, Japan and South Korea by focusing on their exports to the whole world.. Trade patterns of China, Japan and South Korea is focusing on their exports to the United States and to the whole world. United States was chosen as importing country because it is not only the biggest economy in the world but also a major trade partner of China, Japan and South Korea. For both Japan and South Korea, motor vehicles are increasing as the most exported commodity. For China, footwear and toys and sporting goods remained in the top three most exported commodities before 2004. During 1997 – 2004 China is exporting mainly labor – intensive products, such as toys, furniture and clothes to the United States, while Japan and South Korea are exporting technology – intensive product, like motor vehicles, thermionic, cold cathode and photo cathode valves. In 2004, China, total exports to the United States took the biggest portion of all commodities. The second largest composition of...