Research On The Industrial Structure Upgrading Of Processing Trade In Shandong Based On The Input-output Analysis

The industrial structure plays an important role in the national economic structure,which can reflect the quantitative relations among industries. The industrial structuremust be inline with the social and economic changes so that it can evolve upto a higherlevel. The adjustment and upgrading of industrial structure has been belived as theimportant way of economic development. As one of the main form of international trade,processing trade shows impact on industrial structure’s adjustment. As it was clearlystated in Shandong’s12th Five-year plan, the province would optimize the trade structure,transform the export products to tech-intensive, and upgrade industrial structure ofprocessing trade. In conclusion, Shandong is to promote its processing trade fromstrategic perspective.Based on statistic data, Shandong made significant progress in processing trade. In1996, the ratio of processing trade to total trade in Shandong first passed the generaltrade. In1998the processing trade was billion92dollars, and in2012, it reached80.99billion dollars, which increased almost eight times. At the same time, the industrialstructure of processing trade started to change. This could be seen from the change ofproduct structures. The processing trade volume of mechanical and electronic products inShandong has been higher than the trade in textile from2004to2012, the proportion inthe total processing trade increase from35.47%in2004to66.35%in2012, which roseby31percent. High-tech products in processing trade also developed rapidly. The exportin2004was2.144billion dollars, accounting for12.35%of the total amount of export inprocessing trade, and in2012, the export was19.264billion dollars, accounting for35.41%. Thus the industrial structure tended to transfer from the labor-intensiveindustries to capital-intensive and technology-intensive industries.However, the structure of processing trade industry in Shandong province needfurther upgrading since the structure is not well applicable to Shandong’s economicstructure, The important role of processing trade largely depends on the related effect of processing trade on other industries. Since the input-output analysis proposed byLeontief in the1930s can well reveal the mechanism how the industrial structure isconnected to the structure of processing trade, it can be used as a tool of quantitativeanalysis for research of industrial structure.Based on the research of the current processing trade industry, this paper mainlyapplies the input-output analysis researching the upgrading of the industrial structureinvolving processing trade in Shandong province as well as the affecting factors. And thecorresponding countermeasures follow. This paper mainly consists of five parts.Chapter1: An introduction. This part mainly includes the research background andtarget, the methodology and major subjects. It also introduces the creative points andfurther possible research.Chapter2: The theoretical review and literature review. First of all, it explains theconcept of processing trade, and then reviews the related theories and literaturedocuments about the upgrading of the industrial structure in processing trade, finally, itreviewes the input and output theory and the related research.Chapter3: The current situation of the industrial structures of processing trade inShandong. First of all, it introduces the general situation of the development ofprocessing trade in Shandong, and then analyzes concretely the changes of the industrialstructure in processing trade in the view of the product structure. Secondly, according tothe input-output table about Shandong province from2002to2007and the statisticalyearbooks, it analyzes the structure of processing trade industry from the input andoutput perspective, indicating the present situation of the industrial structure in theprocessing trade in Shandong in a quantitative way.Chapter4: The empirical analysis of the upgrading of the industrial structure inprocessing trade in Shandong. First of all, based on the input-output table from2002to2007in Shandong province, it analyzes the development of the structure of processingtrade industry in Shandong in the view of the industry spread effect, and studies thefuture trend in diffenent processing trade industries and the connections between them.Based on this, it can position the advanced extents of industry structures in processingtrade in Shandong. From the view of the input and output, it uses panel data to test empirically the effective factors of the upgrading of the industrial structure in theprocessing trade.Chapter5: The suggestions on how to accelerate the upgrading of the industrialstructure in the processing trade. According to the current situation of the industrialstructures of processing trade in Shandong and the empirical research, it puts forwardsome suggestions from the optimization of labor and capital investment, strengtheningthe ability of technical innovation and rationally adjusting the foreign capital investment.