The Transfer Of China’s Processing Trade Gradient

Since the development of processing trade in China, the import and export volume of processing trade has increased from $235 million to $5,432 trillion from 1979 to 2014, with the rapid development of amazing speed. The eastern coastal areas is the earliest to undertake processing trade area, because the natural geographical advantages, labor advantage attracted a large number of foreign capital injection. The development of processing trade has made remarkable achievements. Processing trade is not only important to our country’s foreign trade, but also greatly easing the pressure on employment of China, which cause China to learn foreign advanced technology and participate in the global industrial chain.It played a pivotal role to improve the competitiveness of our country.Processing trade is not only making a China’s economic growth miracle, but also use its technology spillover effect, which promoting our country manufacturing industry’s development and progress.It led to the urbanization and industrialization process. But it faces many problems such as low added value, low level of technology, low end of the international industrial chain, which causing trade friction, increasing trade imbalance.there is the independent R&D innovation ability, the industrial structure is irrational, the economic development gap between different gradients, policy support and practical operation is not adaptation and other issues. Our country urgently needs to carry on the processing trade gradient shift, which causes the processing trade industry to transfer to the economical gradient in the eastern region which processing trade development is not matching to the economical gradient.From eighteenth Century, the global range of processing trade has been a continuous industrial transfer, which involves a large number of countries with a total of four times. With the free flow of production factors, the factor endowments of different countries have changed, and they have not had the comparative advantage of the industry transfer, to develop a more competitive and more development potential of the industry. The four little dragons in Asia are the first country to benefit from the transfer of the processing trade gradient, and to realize the economic development through the gradient transfer. Production costs will be changed with the flow of international factors, so the processing trade industry in the international or in the region between the gradient transfer is the only way. This transfer process is a dynamic process,which the participating countries and regions in the process with different components, so that the dynamic process is a continuous change. At present, China’s eastern coastal areas with rising labor costs, while the central and western regions in which because of the basic facilities, logistics and transport conditions are not developed, there is no natural port conditions, and most of the high level of advanced talent is the eastern part of the advantages which attracting and other issues. In order to promote the structure of the processing trade, and to provide opportunities for the development of high added value industries and the central and western regions in the eastern developed regions, the regional disparity of China’s "East and west" has been reduced.In this paper, the theoretical basis of processing trade and gradient transfer system, analysing the basic situation of China’s processing trade and the urgent requirement to upgrade, one of the paths is gradient transfer. The necessity of gradient transfer of processing trade is emphasized. In recent years, the central and western regions to undertake processing trade conditions gradually mature, in the industry, economy, human and other aspects have the basic conditions.Henan Province as the central region which the import and export volume growth the fastest province of the processing trade, from 2003 there is only $10.3 billion, to 2014 years of rapid development to $650.33 billion.The growth rate ranked first in the central region and in processing trade gradient transfer has played a important role model in the process. According to the data analysis of the status of Henan and the eastern region is still have the gap, explore the opportunities and challenges will be faced of Henan province. In order to study better about the specific policies of Henan province to undertake processing trade, this paper introduces the influence factors of the processing trade gradient transfer process.In the light of the 19 years data analysis of Henan Province, Guangdong Province, Jiangsu Province, Fujian Province, Zhejiang Province, Sichuan Province, Hubei Province,Hunan Province, Shanxi Province, Anhui Province and Henan Province.Though analysis the effect of processing trade gradient transfer of economic scale, industrial scale, foreign investment, labor input and specific factors such as labor cost and freight capacity. Using the model according to the empirical results which determine currently undertaking the processing trade industry in henan province is facing with the positive factors and negative factors. Puting forward practical and feasible countermeasures,such as improve processing trade industry base, through various channels to attract foreign investment, base on the labor advantage to realize the upgrading of human capital, improve the ability of processing trade freight and promote the functions of the government which implementing policy tilting, to solve the current henan province to undertake some of the problems which will be faced in the processing trade.