Study On The Value Adding Problem Of Processing Trade In China

With the integration of world economy and the internationalization of production, processing trade plays a more and more important role in the international trade. Nowadays it has become one of the most important trade models of China. It's an important way for developing countries to participate in the international division.During the past two decades, China's processing trade has grown significantly, accounted for half of the total foreign trade of China. It has made historical contributions to the growth of economy, the structure of foreign trade and the employments .However, there are many short comings not to be neglected through the development of processing trade, such as low added value, the short industrial chain, insufficient domestic support and unbalanced regional distribution, which makes the products of processing trade to be low-grade and the terms of trade worsen. As a result, Chinese enterprises of processing trade obtain much more slender profit.On the above background, this paper is studying on the value adding problem of processing trade in China, on the basis of the value chain. The thesis focuses on linking theory with practice.Firstly it deeply analyzes the present status, describes the economic effect through cointegration analysis and causality test and explains the problems of processing trade in value-added level, the terms of trade and competitive advantages.Then on the basis of the theory that elements continuum model and the distribution model of processing trade interests, applying the value chain and the dynamic comparative advantage theory, the paper searches the value adding space with the perspective of the main parts of value chain such as R&D, purchasing, distribution and oversea sales in the way of relevant tests and factor analysis.The following part applys a multiple regression model into China's processing trade and makes a measurement analysis for the value adding level ,introducing variable such as the industrial structure, foreign direct investment, foreign trade dependence, the ratio of elements, rate of technological progress, which is a comprehensive research for impact factors of processing trade.Finally, according to aspects of the value chain, it puts forwards the countermeasures respectively to raise the level of value adding. It is advocated that processing trade should train and develop more extensive comparative advantages, seize the strategic link and extend to the high-tech and high value-added content link of the value chain.