Study On Transformation Of China's Processing Trade

During the past two decades, China's processing trade has grown significantly, not only the scale expands rapidly, but also the level and quality improves gradually. Processing trade has accounted for half of the total foreign trade of China. The trade structure is optimizing incessantly and the value-added ratio of processing trade is increasing gradually. Moreover, the domestic gearing capability of processing trade is also increasing. From the perspectives of processing trade volume, export products structure, value-added ratio and domestic gearing capacity change, China's processing trade has realized initial transformation; however, compared with developed countries, China's processing trade still has a long way to go. Specifically, the value-added ratio is low, foreign-invested enterprises are in a dominant position, labor-intensive products account for a too high proportion, domestic gearing role is low, self-R&D and marketing ability is low. Therefore, China's processing trade needs further transformation. Factors affecting processing trade transformation are as follows: labor supply, technology level, institutions, processing trade policy and management methods, etc. This paper analyzed these factors, and put forward suggestions for acceleration of processing trade transformation based on problems existing in China's processing trade.