Western Region Development Of Processing Trade Study

At the beginning of reform and openning up, coastland areas are firstly encouraged to develop processing trade by China government. After more than 20 years development, the processing trade has become one of the major methods of foreign trade. The evidences prove that processing trade plays a significant role in improving the technology, solving employment and stimulating economic development.As the global industry relocating and reengineering acceleration and the trend of the internationalization of product factors, there is a general trend that the processing trade is relocated in West China from East China. This shift process will be further expedited because of the global financial crisis in 2008. In front of the great opportunities, it is vital to timely combine undertaking and developing processing trade with rebuilding proper economic structure and industrial structure in West China. Depending on its comparative advantages, it is important to stimulate and guide the related enterprises to develop the processing trade based on their existing copmarative resources, and then continuously optimise the product structure in processing trade enterprise, which will make the processing trade become the key point in accerlating the development of West China's foreign trade and their globalization.The processing trade currently mainly centres in East China and the system-changing and upgrading will be the requirement of the development tendency. By contrast, the processing trade in West China is at initial stage in both the scale and the standard. Although they have rich labor resources and natural resources, they have not beem made full use of in processing trade. Based on the analysis of the current situations, the purpuse of this paper is to solve the following problems: whether there are capabilities to undertake and develope processing trade in West China; Which industries should be choosen to accerlate its development.This paper compares the national processing trade's total structure, product structure, subject structure and district structure with these structures in West China, in order to investagate the feasibility and advantages for developing processing trade in West China. According to the regression analysis on total volume of processing trade and GDP, it figures out the contribution rate of processing trade in GDP growth. By using SWOT analysis, this paper reaches the following two conclusions: West China should develop the labor-intensive and resouces-intensive processing trade based on its comparative advantage; Certain regions with the advantage of technology and talent should develop technology-intensive processing trade preferentialy. Finally it analyses the existing problems existing in West China and propose some conrespond countermeasures for further research.