Research On Transformation And Upgrading Of Processing Trade In Jiangsu Province

During the development of the processing trade among the past thirty years in Jiangsu Province, processing trade has been playing a very important role in creating jobs, promoting technical progress and economic growth. However, with the rapid development of the province’s processing trade, a series of problems have been gradually exposed, such as the low degree of industrial relevance, unbalanced product mix, excess foreign capital, low technology level and added-value,which reveals a range of defects in the previous model of processing trade. The fact shows that the traditional model of processing trade is not well adapted to the economic development of Jiangsu Province. Meanwhile, domestic policy and the economic situation is constantly fluctuating, which greatly affects the development of processing trade. In the near future, the development of processing trade in Jiangsu Province will face both new opportunities and challenges including internal and external constraints, intensified deep-seated contradictions, which indicates that the transformation and upgrading of processing trade is urgent.Under this context, on the transformation and upgrading of processing trade literature review, this paper has defined the meaning, method and technology path. Firstly, the paper defines the connotation of the transformation and upgrading of processing trade; secondly, on the basis of these theory including comparative advantage, competitive advantage of nations, the gradient transfer theory, the value chain theory, the paper explains the theoretical feasibility and necessity of transformation and upgrading of processing trade; Thirdly, the paper describes the previous situation and analysis the importance of economic growth in processing trade and a series of problems during the development process; Fourthly, considering the domestic and international situation, the paper analyzes the current situation and the necessity of transformation and upgrading of processing trade. Meanwhile, the paper makes the factors influencing the transformation and upgrading of processing trade clear and concrete; In addition, on the basis of existing research results and further analysis, the paper starts to establish the assumption and select the eight factors. What’s more, the writer takes advantage of econometric model and uses empirical analysis to get relationships between the various factors and transformation and upgrading of processing trade; at the last, Combined with empirical analysis conclusions, the paper makes several practical policy recommendations, including optimize the utilization of foreign capital, a correct understanding of labor costs, improving workforce wages, reasonable adjustments enterprise scale, focusing on the improvement of the quantity and quality products, bringing in high-end talent human resources, sparing efforts to improve the technological level, enhancing the awareness of research and development, fostering independent innovation capability, accelerating the adjustment of industrial structure, extending the industrial chain, improving the industrial supporting capacity, in order to promote the transformation and upgrading of the processing trade.