Evolving Cross-Border E-Commerce: Navigating Bilateral Trading Developments in the Korea–China FTA Era

Purpose: This study assesses the Cross-Border E-Commerce(CBEC) outcomes within the Korea–China Free Trade Agreement(FTA), comparing its terms with other agreements to identify constraints and propose enhancements for bilateral cooperation. It emphasizes the significance of facilitating the Second-Phase FTA Negotiations to align with the rapidly evolving global digital commerce sector. Composition/Logic: The study offers a comprehensive analysis of bilateral CBEC development since the FTA’s implementation, encompassing aspects such as trade volume, logistics, payment method, customs regulatory, and inter-governmental cooperation. Particularly, the learning from an AliExpress case study is employed to illustrate strategic opportunities for Korean CBEC platforms in the Chinese market. Moreover, the comparative analysis of the FTA’s CBEC terms with emerging international agreements highlights existing gaps and potential areas for enhanced cooperation, which identify the development direction in this field. Findings: Despite challenges posed by the COVID-19 pandemic, bilateral CBEC trade has quadrupled, comprising over half the total number of bilateral transaction cases. Furthermore, the FTA has fostered diversification and innovation in products, services, payment methods, logistics, and associated CBEC platforms. However, based on the “E-commerce” chapter of the China–Korea FTA, the study also reveals significant challenges impeding China and Korea’s digital trade and economic prosperity in the global digital economy. Predominantly, these barriers are rooted in the inadequacy of provisions on cross-border data flows, consumer protection, and etc. Originality/Value: This study addresses a crucial gap in the literature on the Korea–China bilateral CBEC within the context of their FTA. Applying a case study approach, it offers strategic insights for Korean enterprises aiming to penetrate the Chinese market. Additionally, it advocates for stronger bilateral digital trade cooperation in the context of forthcoming Second-Phase FTA Negotiations, aligning with global digital economic trends.