Technology Diffusion Effects Of China's Processing Trade

Since China's reformation and its opening to the outside world, its economy is in a phase of continuous growing because of the development of processing trade. Although the foreign invested processing trade companies provide a great number of posts, the technology is not developing as fast as the processing trade. Besides, local companies are being replaced and restrained due to the favorable conditions only for foreign invested processing trade firms, which contradicts the original intention of learning technology by sacrificing the share of markets. Therefore, how to improve our technology and enhance the competition ability of local companies by developing foreign invested processing trade is becoming a vital problem which is needed to be resolved now. This paper contains four chapters and begins with the characteristics of the processing trade in China. Its primary concern is technology diffusion. The fist discussion is the channels of technology diffusion in processing trade, and then follows the advantages and disadvantages of technology diffusion in this kind of trade, the policy suggestions are provided in the last chapter. The main ideas of the four chapters are as follows:The first chapter introduces the overall situation of the development of China's processing trade, pointing out that the relating industries, and the improvement of industry structure gain a lot from the processing trade. However, we should also be clearly aware of the negative effects such as the elimination of local firms, the impacts to the healthy development of national economy, etc. Besides, this chapter focuses on the theories of technology diffusion, including the definition, channels and the determinant factors of the...