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Recently the route connecting the trans-Korean railway and the trans-Siberian railway has become of particular interest for many academics and policy-makers in East Asian countries. The extensive review of previous studies, however, reveals that literature on the subject is lacking solid analytical framework. Most studies are one-sided, focusing on the political aspects of the issue or paying little attention to the economic aspects of the problem.

This study intends to develop an analytical framework through which the most efficient route among four major alternative routes connecting the trans-Korean and trans-Siberian railways can be identified. It attempts to assign priorities to the four alternative routes according to their level of economic efficiency.

This study utilizes a simple cost-benefit analysis in evaluating the four routes. Cost side, transportation time, effectiveness of customs procedures, and gauge difference are selected as the main economic factors. The volume of cargo, industrial production in adjacent regions, access to natural resources, and market size and foreign investment climate are used to evaluate the benefits of the routes.

The study concludes that Route 3, which connects ‘Busan - Seoul (South Korea) –Pyongyang -Sinuiju (North Korea) –Shenyang –Beijing - Erenhot (China) –Ulaanbaatar (Mongolia) –Ulan-Ude - Moscow (Russia)’ is the most efficient route.

This paper examines global imbalance and rebalancing issues from the viewpoint of Korea. As IMF (2009) notes, the unwinding of global imbalance seems inevitable and, in fact, it is in progress. We illustrate that Korea, with a flexible exchange rate system and relatively balanced current accounts, has little direct linkage to global imbalance. However, we also find that Korea is not immune to the costly adjustment process of imbalance due to the triangular trade between Korea, China and the U.S. The fact that Korea is ‘indirectly’ linked to global imbalance limits Korea’s ability to cope with the situation. Boosting domestic demand, often mentioned recommendation for East Asia, is not an appropriate solution for Korea with low personal savings rate. A lot depends on China’s policy. If China reduces its dependence on U.S. market and increases domestic consumption despite unemployment risk in export manufacturing sector, it will provide Korea with an opportunity for more stable growth based on China’s final demand. Korea can also make efforts to increase economic integration and expand monetary cooperation in Asia that would help to increase consumption demands and final goods trade in the region.

In this paper, we examine the comparative advantage of Korea and China while focusing on their technology level. The three digit SITC (Standard International Trade Classification) data is classified by technology level and the revealed comparative advantage (RCA) is derived from 1992-2009 by using UN COMTRADE data. For careful interpretation of the comparative advantage and technology levels, we also examined intra-industry trade and unit values of bilateral Korea-China trade, and semi-conductor industry technology. We found that the revealed comparative advantage has moved from low technology products to high technology products in Korea. China still maintains a comparative advantage in low technology products such as textiles and clothing, but at the same time, China’s high and medium-high technology products have recently gained a comparative advantage. The perception that China only has a comparative advantage for labor intensive products with low technology should be changed based on our analysis. However, China’s advancement in technology should not be overestimated. When comparing the unit value of basic materials of Korea’s and China’s exports, we found that Korea’s export product prices are on average higher than that of China’s, although the gap is reducing. A wider technology gap between Korea and China still exists in the semi-conductor industry, which is one of the most advanced high technology industries throughout the world.

The economic success of East Asia was due to an export-led growth strategy, which was heavily dependent on the global trading system underpinned by the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). In recent years, however; East Asian countries have shifted their trade policy focus to regional agreements and made Free Trade Agreements (FTAs) among themselves arid with other regions. Government organization has been restructured to increase FTA activities. Generally, the current literature predicts that FTA activities of East Asia would help to increase the welfare of the region. In this paper; we offer a critical assessment of East Asia FTAs. We note that East Asia FTAs provide incomplete coverage of sectors and are likely to lead to an inefficient resource allocation. FTA movements are not matched with actual trade flows. The benefits of East Asia FTAs are fairly limited and potential benefits, if any, would not likely be materialized in the near future. Our overall assessment is that the recent policy shift in East Asian countries from multilateral trade orientation or unilateral action to regionalism or a parallel multilateral and regional trade approach will not produce much gain. The governments should increase their efforts at economic reform and reduce barriers to trade and investment, rather than to allocate more resource and manpower to FTA activities.

China has been the most important economic partner to Korea since the resurrection of their diplomatic relationship and economic interaction. It has been suggested that China simultaneously presents challenges and opportunities to the Korean economy. This paper investigates changes in trade specialization patterns and comparative advantage of Korea and China, and analyzes the effect of market expansion of Chinese industries on market shares of Korean industries. It is found that since the early 1990s, the industries that lost market share as China’s share increased include those in which Korea has maintained a comparative advantage or improved the level of disadvantage, such as IT equipment and other transport equipments. Considering growth of trade flows and emergence of China, it is critical for Korea to actively participate in international production chains, create competitive edges and extend complementary relationship with trading partners.

Using the Social Network Analysis(SNA) method, this paper examines inter-country relationships between countries that may be part of the New Silk Road. Based on bilateral-trade data from more than 70 countries, the paper provides a more vivid understanding of overall features and effects of the New Silk Road policy. According to the results, India, Turkey, and Russia have the highest degree centrality, indicating that the success of the New Silk Road policy depends mainly on the ability of the Chinese government to incorporate these countries. Among European countries, only Germany can be successfully incorporated into the New Silk Road network. In addition, Central Asian countries such as Kazakhstan and Uzbekistan show no potential as hubs in the network. Most importantly, China has a dominant position in the New Silk Road network. China's focal and dominating status is also supported by the fact that there is no change in the clustering coefficient in the network, which implies that the Chinese government has to absorb into the system those countries that are less likely to benefit from the policy.

During the last 20 years trade between Korea and Mexico has increased steadily, reaching $2.8 billion in 2003. This trade expansion will be further accelerated with the increase in intra-industry trade in the future. Mexico's chronic trade deficit against Korea, which is attributed to Korea's increasing investment in Mexico, has rather contributed to Mexico's exports to the American region.

As Mexico expands its FTA networks, Korean companies are having difficulties in accessing the Mexican market. Considering this situation and the economic benefits of a Korea-Mexico FTA for both countries, we should first expand cooperation between private sectors, which is expected to facilitate a formal discussion on the Korea-Mexico FTA.

This paper examined the future prospects of China’s economic development and its impact on the East Asian Economy and the economic integration of the region. The key issue to China’s economic growth is the contradiction between the socialist political system and a market-based economy. The overall assessment is that China will be able to manage the transformation of the nation into a steadily growing market economy.

We also found that China is the key country forming a triangular trading block which has implemented the international division of labor in the North-East Asian region. China’s rapid export growth and increased market share in the world economy is not a threat but a new opportunity for the East Asian countries. The rise of China will certainly be accompanied by an expansion of a consumer market, which will also broaden business opportunities for East Asian.

Despite the interdependence between East Asian countries, a regional trading bloc embracing East Asia has not been created yet. The future prospects for realizing the vision of a regional free trade agreement in East Asia in the foreseeable future is not bright, either.

This paper examines the network dynamics of the cross-border trades utilizing Social Network Analysis (SNA) based on data obtained from the WTO-OECD Trade in Value Added database from 2000-2011. The main results of this paper are as follows: regarding the top 10 in-degree centrality industries, industries in China, Germany, and the U.S. have emerged as the largest importers of foreign value added, implying that the global production network is dominated by two different types of industries. The first type includes processing and assembling functions in China and Germany. The other type of industry involves foreign value added largely for domestic final demand in the U.S. Secondly, there are also two types of brokerage roles. U.S. industries are operating in a liaison role, while Chinese and German industries are mostly operating as coordinator or gatekeeper. Thirdly, manufacturing industries in China and Germany which have emerged as higher in-degree centrality incur a large portion of their value added from the logistics industry. This suggests that those leading industries with the highest characteristics of hubness in the global production network cannot sustain their network status without efficient utilization of the logistics industry.

This paper tries to empirically investigate whether the jump risk of Korean stock market may be statistically useful in explaining the Korean CDS (5Y) premium rate. This paper uses the jump-diffusion model with heteroscedasticity to estimate the conditional volatility of KOSPI from 7/2/2007 to 7/30/2010.

The total volatility of Korean stock market is decomposed into a heteroscedasticity and a jump risk by using the jump-diffusion model. The finding is that the jump risk in stead of heteroscedasticity in Korean stock market can explain the Korean CDS premium rate.