Cooperative Governance: The Strip Relations In The Transformation And Upgrading Of Local Processing Trade

With30years of China’s reform and opening up, the processing trade of China, as the significant part of China’s foreign trade and the main form of participation in international division of labor, has made considerable development. It has played a major role in the export expansion, foreign investment introduction, balance of international payments, growth of foreign exchange reserves, improvement of adjustment of industrial structure, technological progress, economic growth, release of employment pressure and so on.However, with the development of the processing trade of China, a series of such severe problems as the industry which still lies at the bottom of the international value chain, the enterprises which are weak in core competitive ability and have a low level of localization and industry relevance, the weakening of the comparative advantages in labor costs, and the terms of international trade, arise increasingly day by day, which is gaining more and more attention from us. The production cycle of the processing trade usually lasts25years, therefore, if the country cannot build a new comparative advantage by upgrading the structure of the industry or increasing the level of localization, the "industry" will become unrooted with the increasing of the processing costs. The transformation and upgrading of the processing trade of china is a policy choice important to the increasing of the China’s position in international industry division and the transformation and upgrading of the growth pattern of the international trade, moreover, is urgent.The transformation and upgrading of processing trade relies upon the integration of enterprise, market and the government. As the primary local administration, on one hand, the government needs to fully implement their macro-control function, utilization of labor, technology and knowledge improvement to support the sustainable development of the industry. On the other hand, the Customs as a supervision bureau of the industry is highly expected by local government and enterprises if they can provide convenience and cost reduction for corporations through policy assistance and procedure simplification under the pressure of a quick business transformation and bankruptcy. Therefore, the local government and the Customs, from the broad governmental point of view, have become two major pushers which have a great effect on the transformation and upgrading of the industry. The allocation of administrative structures and its authorities between the local government and the Customs are the relationships of vertical and horizontal lines. The relationships between the vertical and horizontal lines are the basis of relation modes among Chinese governments, which aims at realizing the balance of concentration and distribution of power on the premise of maintaining the smooth consistence of social regulation system, and thereby keeping the stability of political structure. However, the system of vertical and horizontal lines inevitably leads to series of problems.With the analysis of current processing trade status and problems, this article firstly identify the role of the local government and the Customs, and then expound the operation status and existing problems of the relationships of vertical and horizontal lines between the two parties in the upgrading transformation of processing trade. Therefore, on one hand, the thesis enlightens us from the upgrading transformation cases cooperated by Shenzhen government and the Customs with their disadvantages; on the other hand, in light of the overseas effective experiences dealing with relationships of vertical and horizontal lines, it can put forward suggestions on the relationships in upgrading transformation and the corresponding countermeasures to upgrade the processing trade with the joint efforts of local government and the Customs.