The Routes And Countermeasures On Transformation And Upgrading Of Processing Trade In China

The internationalization of the market, the pursuit to the profit from the multinational capital, the demand of the industrial transfer from the industrialized countries, and the urgent requirement from the developing countries to develop the domestic economy and resolve the surplus labor, all the things mentioned above provided the soil for the prosperity of the processing trade. In accordance with this situation, our country started the road of processing trade. With the assistance of series of policies, the processing trade step into the fast lane, which occupied half of the China’s Foreign Trade from1996. Growing from nothing, and expanding from small to big, the processing trade experienced huge changes in more than30years’ development. In the whole, it promotes the development of Chinese economy largely; in detail, it not only contributes a lot for the structural transformation of the Chinese industry by the introduction of the techniques, but also alleviates the pressure of the employment. However, thing always have two sides. We should not be covered by the prosperity of the processing trade; on contrast, we should pay more attention to the obstacles faced by the processing trade. From one side, the pressure of RMB’s appreciation, the weak demand for the sluggish of American economy, more and more serious EU’s debt crisis, and the upraise of labor cost, all mentioned above deteriorate the management of the processing trade enterprises. From the other side, although the processing trade walked through the labor-intensive, entering the capital-intensive phrase, it still not gets rid of the status of low additional value. Meanwhile, double-high processing enterprises, unbalance of the industrial distribution and shortage of the innovation, constraint the development of the processing trade. In2009, Chinese processing trade increased less than zero for the first time. In2011, the proportion of the processing trade in china’s foreign trade declined to35.8%. The decreased of the proportion doesn’t mean that it should be abandoned; on contrast, processing trade still plays an important role in our economy, and will continues to shine in the stage of international division of labor. So considering the economic situation at home and abroad, it is really essential to take action to promote the transformation and upgrading of Chinese processing trade, so that it can continue to promote the development of economy, not constraining it.This paper elaborates the necessity of transformation and upgrading by the analysis the causes. Meanwhile, combining the government and enterprises’demand, it points the direction of transformation and upgrading, and proposes several measures for the development. The structure of this paper can be divided into seven parts:The first chapter is the introduction. It brief narrates the dilemma faced by the processing trade, and points out the necessity of transformation and upgrading, meanwhile, it summarizes the researches from the scholars about the processing trade.The second chapter narrates the definitions and theories about the transformation and upgrading of processing trade, chiefly analyzing Theory of Comparative Advantage, Factor Endorsement, Fragmentation of Production, Product Life Cycle, The Eclectic Theory of International Production and Gradient Transfer Theory.The third chapter introduces the emergence and development of Chinese processing trade, and the causes of our country to transform and upgrade the processing trade, and briefly analyzes its current situation, its contribution to economic development and the factors which influence the transformation and upgrading of processing trade.The fourth chapter studies the road of processing trade and the restraining factors. It proposes three routes which are the increase of the industrial chain, the transformation from east to midwest, and overseas processing, and elaborates the constrained factors in the routes.The fifth chapter is about the comparison of the processing trade in major countries and regions. By the analysis and comparison from Japan, Korea, Taiwan, we absorb the useful information to promote the development of our processing trade.The sixth chapter studies the strategies of the transformation and upgrading of the processing trade. It analyzes the strategies from two aspects.The seventh chapter is the conclusion that makes a brief summary of this paper.