Research Of The Upgrading Transformation Of Shanghai's Processing Trade

During the initial period of China reform and opening up, as one of the mode structures of foreign trade that fit well our national own conditions, processing trade have emerged and was developing very fast. Over the twenty years, Shanghai processing trade has achieved very large progress and plays very important role in introducing foreign investment, importing technology and solving employment issues etc. With the great-leap-forward development of our country's economy, the adjustment of industrial structure must be enforced especially in Shanghai. As the international and domestic environment has been changing, the potential disadvantages and harmful effect of traditional processing trade has faded in which have made the transformation and upgrading a matter of great urgency.With regard to the research on transformation and upgrading of Shanghai processing trade, first of all, the meaning, characteristics and foothold shall be specified. The author illustrates the concept and theory of processing trade and recalled on its developing process in Shanghai. Based on the vertical analysis of Shanghai processing trade and horizontal comparison with national general conditions, it's proved the great contribution of processing trade to Shanghai economy and the importance of transformation and upgrading. For the time being, Shanghai has stepped out the initial stage of low value added and low technological level and now is developing deeply toward the upstream of value chain. Although Shanghai processing trade is below the national average of foreign trade volume, it has shown the characteristic of high appreciate rate. To draw a conclusion, the government and enterprises have been pushing its transformation and upgrading from their own aspect.The transformation and upgrading of Shanghai processing trade is to deal with the reality that we are facing e.g. upgoing manpower price, fluctuation in exchange, barriers of international trade and lagging of related policies. The author takes low-end international division of processing trade as internal cause, while takes the changes in international and domestic economic environment as external cause, based on which the author elaborates on the motive of transformation and upgrading of Shanghai processing trade. In the last part of the research, the author does the further analysis by using the theory of global value chain and thereon provides solutions to the transformation and upgrading of Shanghai processing trade which includes enhance the import of technology to promote the upgrading of products and industries, enforce production, sales and marketing to promote the upgrading of product branding, improve the processing trade process to realize in-depth intercalation of value chain, utilize corporate governance to improve the capital composition of processing trade. The goal is to reach a win-win situation for the development of both Shanghai processing trade and national economy.The thesis consists of five chapters:Chapter one is the introduction on the background and the study implications. The author specifies the concept of processing trade and states its strength and weakness.Chapter two is the literature review, firstly from the processing trade's point of view, the author explains four types of international trade theory i.e. production factor endowment, competitive edge, intra-product specialization, global value chain and then summarizes the influence of current processing trade toward national economy, the issues we are facing and related research on the transformation and upgrading.In Chapter three, the author analyses the development status and characteristics of Shanghai processing trade by analyses on the historical data to prove the important role of Shanghai processing trade in foreign trade, national economy and solving employment issues etc.In Chapter four, the author conducts further study on the motive of the transformation and upgrading of Shanghai processing trade. The problems we are facing during the transformation and upgrading of Shanghai processing trade are identified through the study on the internal cause for the mode structure of processing trade as well as the external cause for the environmental changes we are facing.Chapter five is about the solutions provided to the transformation and upgrading of Shanghai processing trade. Building on the global value chain framework, the author provides the corresponding solutions to all sort of issues we are facing in Chapter four.