The Study About The Financial Deepening Impact On The Transformation And Upgrading Of Processing Trade In China

After the reform in China,China adjust the economic development strategy,from a strategy of "import substitution" under the planning system to a strategy of "combination import substitution and export oriented",namely in the capital and technology intensive department China continues to implement the strategy of import substitution,but export-oriented strategy in labour-intensive sectors,the open department's main responsibility is that provide foreign exchange for the imported technology,the equipment and the raw materials import substitution departments provide.Therefore,the core goal about the China's opening is to earn foreign exchange through exports.Around the core objective that the "export to obtain more money",the opening-up strategy in China runs on two main line,but mainly by encouraging domestic enterprises to expand exports,China adopted a policy of the processing trade,namely enterprise is used to processing and re-export the imported materials,it shall be exempted from customs duties and import VAT in the processing of the import.Processing trade for our country to become absorbed foreign powers has irreplaceable function.Our country is no exception,since the early 1980's the China began to implement the restricted export strategy,since the rapid development of foreign trade.In 2005 our country became the world's third largest trading nation after the United States,Japan,for three consecutive years since 2010 as the world's largest exporter,a great change of the export commodity structure,by the early stage of reform and opening to the export labor and resource intensive products,in 2012 to capital and technology-intensive products exports account for more than 60%,but it is real that this proud achievement is dominant foreign export trade situation in our country,foreign export scale in 2013 accounted for nearly 46.1%(US $1.92 trillion)of China's export scale.Because of China's processing trade dominated by foreign companies,domestic enterprises in the brand,the international marketing channels are important aspects,such as no control,it become the greatly limits that obtained from the processing trade in China's interests.Open macroeconomics that current account deficit is caused by the gap between domestic savings and investment,it leads to the emergence of the current account deficit that insufficient savings or investment too strong,some experts think weather financial development difference among the countries,the international financial market integration will lead to large,persistent current-account imbalances.And in the case of a financial market is not developed,it converses into domestic investment that too much savings in China,it results in domestic savings transfer from the trade surplus to the developed country first,and then again in the form of FDI "detour" to the China,the FDI that enters the export processing industry intensify the expansion of trade surplus.These theories explain that the difference of financial development will lead to changes in the current account,and the main characteristics of the processing trade is "more come and more go",this shows that there is a link.From the actual situation,financial deepening makes it be true that the interest rate marketization,the free flow of capital and competitive resource allocation,and the interest rate marketization makes interest rates falling and reduces the cost of financing of trade enterprises;The free flow of capital to promote the liberalization of trade,as well as the expansion of trade,then it is particularly important that processing trade for two head of trade pattern;Competitive credit resources allocation has changed the original selective credit allocation,which makes the processing trade enterprises in the process of transformation and upgrading the funds needed for the technical,marketing and R&D become abundant.Also,in the process of transformation and upgrading of processing trade has brought the trade scale,upgrade the required large amounts of money as well as special trade patterns of capital flows,the series of problems will also bring great challenges to China that the financial repression:the trade scale and two head out of the processing trade pattern has brought the huge capital flows,financial repression caused by low interest rates,which is the capital flight,will be the impact of RMB exchange rate,increase of foreign exchange market volatility;Outside the funds required for the competition to promote the upgrading of domestic enterprises,foreign enterprises to turn to the local financing difficulties in financing,as a result of the high cost of capital in hot money shocks,higher financing costs will reduce the rate of transformation and upgrading of processing trade enterprises.I work in academy of world economy,the main research direction is financial development,capital flow mechanism of the effect and influence of the open economy in our country,further said that at present,the open economy development in our country mainly depends on the processing trade and attracting foreign investment,financial development and the deepening in our country to participate in the international industrial chain plays the role of division of Labour,in other words,whether with the aid of our country's financial deepening to promote transformation and upgrading of processing trade in our country,the purpose of this article is to comb and analysis this idea.This paper tries to build a basic theory framework that analysis financial deepening and transformation and upgrading of processing trade,to explore a new idea of transformation and upgrading of processing trade in our country,this paper first analysis the characteristics of the processing trade and its development and overall development situation,as well as the overall condition of financial deepening,secondly,apply a DSGE model for the analysis of financial deepening to the processing trade and economic influence,and the promoting effect of transformation and upgrading of processing trade;Again,I use the Granger causality analysis to demonstrate the causality,the theory basis for the back of the model establishment and analysis;Finally,empirical research on the financial deepening and transformation and upgrading of processing trade influence mechanism,analysis of financial deepening the influence factors of the transformation and upgrading of processing trade of importance;On the basis of above analysis,we related countermeasures and Suggestions are put forward.