Existing Problems And Development Strategies Of China's Processing Trade

Along with the trend of economic globalization, the quick development of multinational corporations and information industry, processing trade has been developing quickly in China based on China's rich labor resource advantage. In 1981, processing trade began to emerge but now it has become the most important trading form in China. The quick development of processing trade not only enhances China's connection with outside world, speeds up the transition from planning economy system to market-oriented economy system, increases China's foreign reserves, but also attracts plenty of foreign investment, offers a lot job opportunities, improves the development regional economy and the upgrading of the whole industry. In a word, processing trade has made great contribution to the development of our economy.Now, China has recognized that to achieve sustainable growth, it needs to transit from quantitative expansion to qualitative improvement. Whereas, processing trade forms a U-Shaped curve with R&D at one side and branding and marketing at the other, while processing industry which brings least profit is at he bottom. Moreover, the regulation on country of origin for processing trade is rather worse, thus a lot of products which produce simply in China have labeled as "Made in China". This not only causes trade frictions, occupies a large share of our quotas, but also decreases the quantity of real China products of government procurement.This thesis analyzes the status and problems in processing trade, explains the reasons for the existing problems and finally gives some suggestions on the upgrading of processing trade.