Empirical Study On China Processing Trade Export

Since the reform and opening-up, adjusting to the new trend of globalization and international competition, china has participated in Vertical Specialization positively, and China's processing trade has grown rapidly. With processing trade growth drastically, international trade increased constantly, and economy developed rapidly. As is known to us, China's rapid economic growth is relevant to export opportunity which we have seized from Vertical Specialization. Nowadays economic aggregate and development level is sharply different from that at beginning of reform in china, and so is domestic and international circumstance. While China's processing trade in the global production and division of labor is still major in the labor-intensive processing and assembly areas, technical content, processing depth and value-added are relatively low. In view of "dynamic effect" and the "added value" issues, Many scholars point out that export of processing trade is harmful to Chinese economic growth in the long term. As a developing country, China's development of processing trade should not only be satisfied with slender processing fees, but also catch the opportunity to change the status from the low-end to high-end tache along the global value chain, and achieve the dynamic benefit, promoting its own technology and productivity.In this thesis, after sorting out and summarizing the relevant literature, based on the combination of the characteristics of the development of China's processing trade, we analyze some problems which current Members are more concerned about the export of processing trade, especially the "value appreciation" and " dynamic benefit "problem. Around these two problems, this study has empirical studies. by the necessary statistical description and modeling, this study value the economic effect in terms of acquisition of value-added and promotion of productivity, and analyze the factor which can constrain the impact of processing trade export-related effects.There are mainly two findings in this thesis. (1)Based on Lall et al (2006), this study compared Chinese export value-added of manufactured goods with other countries, we found that the average export value-added of manufactured goods is relatively low. Strong market competitiveness that "Made in China " shows is mainly reflected in low value-added grades of products, which to some extent, illustrate that value appreciation of China's processing trade is low, so is processing trade appreciation rate. Furthermore, The paper bases on new trade and new growth theory to build the model, which adopted 2000-2007 provincial panel data with dynamic panel system GMM to empirical analysis the influencing factor of China processing trade appreciation rate. It concludes that processing trade scale has negative effect on processing trade appreciation rate, human capital role is not obvious, the third industry may be an important factor to restrict processing trade appreciation rate grow. In addition, the eastern region and the mid-western region are in different developing stage, labor cost, capital deepening, foreign direct invest and R&D ability have different effect on processing trade appreciation rate between the eastern region and the mid-western region. (2)Based on nonparametric DAE method, we estimate China Malmquist index and build dynamic Panel model with 2000-2007 Panel Data, in order to test whether the export processing trade promote China's TFP. The empirical results show that export processing trade in China didn't affect obviously the acceleration of TFP, and The level of marketization, human capital, the capability of R&D, situation of dual structure, financial development, infrastructure and stable Macroeconomic restricted the function. Furthermore, in the Midwest of China, targeted value of many variable quantities such as the level of marketization and infrastructure couldn't reach the critical value which could promote the TFP to increase.The empirical results of this study not only supported the some hypothesis related to trade and economic growth about the new trade and new growth theories, but also reflect the reality about China's processing trade at the current stage. Based on empirical findings of this study, combined with the relevant theories, in connection with the development of China's processing trade, this study bring forward corresponding policy implications. This study suggests that we should continue to develop the processing trade, norm and guide the behavior of foreign investment, encourage the transformation and upgrading of processing trade. In addition, it is necessary for us to promote the reform and construction in related fields, provided that we fully taken the economic performance differences among the various levels and regional disparity into account. Only in this way can we make full use of the role of processing trade, seize the opportunity to participate in international division, climb to high-end cross along the value chain, search for greater value-added space, continue to achieve the dynamic effects, and promote domestic technological progress and productivity upgrading.