An Study On The Factors Influencing Upgrading Of Processing Trade Under Global Value Chain

With the deepening social division of labor restructrue and valuecreation, the global value chain is shaped. The enterprise use theircomparative advantages to maintain and enhance their competitivestrength in global value chains. Since reform and openning, China’sexport-orientede eonomy, especially processing trade has made rapiddevelopment. China has been integrated into the global value chains bydeveloping processing trade. At the same time, we should noticed thatthere have been many problems in the processing trade, such as thetraditional caparative advatage gradually diminished, low industriallinkage, poor ability of technology absorption, low technical level andvalue-added etc.Firstly, This paper describes the related theory and explain therelationship between these theories and upgrading of processing trade ofour country to provide theoretical support. Then, the paper points out thepresent situation and problems of processing trade from the reality andcurrent international and domestic situation. Next, the paper use globalvalue chain theory, comparative advantage theory, factor endowments theory and new growth theory to analyze the influence factors ofupgrading of processing trade theoretically. On the basis of that, the paperselects Jiangsu, Shanghai, Zhejiang, Guangdong, Beijing, Tianjing,Shangdong and Fujian province as samples for the eight panel data.Moreover,the paper selects six factors to construct measurement model asemirical analysis. We can get the conclusion as follow: investment inresearch and technical progess play important roles in the upgrading ofprocessing trade. The inner promoting mechanism is still not mature,especially the promoting fuction of the key factors such as lab investmentand use of foreign capital has not been reflected. Also, high tradeopenness is the restricting factor of upgrading of processing trade.Finally, based on the analysis above, the paper puts forward somemeasures to promote the upgrad of China’s processing trade. For example,enchancing the ablility of local innovation and research, differentiatingand guiding the foreign direct investment, strengthening the humancapital accumulation and cultivation, fostering the linkage industries andadjusting the processing trade policy.