Analysis of the relationship between China's exports to the world and Korea's export to China

Abstract

Background/Objectives: The purpose of this study is to examine the relationship between China's exports to the world and Korea's exports to China, and to suggest directions for future Korea's exports.

Methods/Statistical analysis: The analysis period was using total 213 monthly data from January 2000 to September 2017. As a analysis result, there is a harmonization phenomenon between China's export to world and Korea's export to China and showed a very high correlation.

Findings: The correlation coefficient between China's exports to the world and Korea's exports to China by year was calculated as 0.9055. The correlation is showing very high harmonization phenomenon. In a regression analysis in which Korea's exports to China are dependent variables, the coefficient of China's exports to the world was 0.3040. We can recognize that KOEX increases by one unit when CNEX increases by 0.3040. In CNEX included with KOEX, CNEX and KOEX are interpreted as moving without time lag. As of 2016, Korea's exports to China account for 25.11%(1st) of total exports, but China's exports to Korea account for 4.48%(4th). It is also confirmed that China's exports to world and Korea's exports to China show high mutual harmonization phenomenon. In the Korean economy, China accounts for a large portion of exports and trade balance. Therefore, it is expected to be influenced greatly by the economic trend of China in the future.

Improvements/Applications: In order for Korea's exports to grow steadily in the future, First, China's expert to world should continue to increase. Second, Korea should establish an export diversification strategy to other countries including China.

Keywords: China's exports to the World, Korea's exports to China, Exports, Imports, Trade Balance