The Anlysis Of The Influential Factors Of China’s Processing Trade

After World War II, driven by economic globalization, many countries have actively integrated into the the international division among the products. As the rapid improvement of production technology, the international division has been deeper and deeper. International trade has transferred from Inter-industry Trade to Intra-industry Trade.In recent years, international industrial shift has grown up in developed and newly industrial countries,and Intra-product trade based on multinational companies has made considerable progress. During this process, many developing countries make full use of their comparative advantage and participate in Intra-product Trade as the form of Processing Trade.They have obtained enormous benefits for their countries and our world.So Processing Trade is a form of Intra-product specialization in developing countries.Since we followed the policy of reform and opening, along with the favorable opportunity of global industrial restructuring, the Chinese government adjusted their foreign trade policy actively, took their efforts to carry on the international industrial transfer, and made processing trade take root in their country and grow up quickly.After30years of development, processing trade has become one of the main ways of participation in the international division. It has played a pivotal role in economic growth, stimulating employment and upgrading the industrial structure. Nowadays, with the adjustment of China’s foreign trade policy and the growth mode of foreign trade, China’s processing trade has entered a new phase of transformation and upgrading.In this paper, we sum up the theory of processing trade, analyze the development process and the characteristics of China’s processing trade. We focus on the main factors which affect the current development of China’s processing trade. By this way, we can have a knowledge of the development of China’s processing trade from the phenomenon to the essence.In the first part, we describe the background and significance of our research, summarize the methods, the main innovations and shortcomings. The second part sums up the related research at home and abroad, also introduces the theoretical basis of this paper the theory of comparative advantage, factor endowments theory, theory of intra-industry trade, multinational theory and the theory of intra-product specialization. The third part analyzes the development process of China’s processing trade, and summarizes the characteristics of China’s processing trade from the total, regional distribution, enterprise structure and the value-added rate of processing trade. The fourth part explores the main factors of the current development of processing trade by empirical analysis, such as human capital, labor costs, foreign direct investment, in order to grasp the essence and the characteristics of China’s processing trade. On the basis of the third and forth part, the fifth part summarizes the problems existing in the processing trade of China and make recommendations accordingly.