Comparative Study Of Processing Trade And Ordinary Trade's Impact On China's Economic Growth

Processing trade and ordinary trade are different trade patterns. The former is the intra-product trade and the latter is traditional pattern. Under the background of international specialization of intra-product production and economic globalization, China takes procession trade as the main means of intra-product specialization. This paper first reviews the related essays on this topic and then tries to compare the different impacts of processing trade and ordinary trade on the economy from the four aspects of comparative advantage, technology spillovers, upgrading of industrial structure and economies of scale. The paper comes to the conclusion that the impact of processing trade on the growth of economy is bigger than that of ordinary trade. On this basis, the paper uses the cointegration model and the dynamic lagging model to prove that the conclusion is true. In the end, based on the conclusion, the paper gives suggestions on polices hoping that the processing trade can have more positive impacts on the growth of China's economy.