An Analysis Of The Impact Of Trade Finance On The Innovation And Development Of China's Processing Trade

Since the reform and opening up in 1978,after decades of rapid development,China has become the world's export power,which contributed to the processing trade.Due to rising human land costs and environmental degradation and other factors,coupled with the lack of independent brands and innovative technology,China still can not get rid of the low-end position of the global value industry chain.At the same time due to the developed countries and developing countries from the"two-way squeeze",innovation and development of processing trade is very urgent.First of all,this paper analyzes the impact mechanism of trade finance on the innovation and development of processing trade from a theoretical point of view.Then,based on the experience of developed countries,the status quo of China's processing trade and the status quo of trade finance are analyzed.Finally,this paper constructs the model between the innovation and development of finance and processing trade,selects the value-added rate of processing trade,the financial scale and the financial efficiency as the explanatory variables,and concretely analyzes how the financial efficiency and financial scale affect the innovation and development of China's processing trade.On the basis of this result,the article use the variance decomposition analysis,cointegration test and impulse response analysis to explain all the reasons.It has been found that financial efficiency has the greatest impact on the innovation and development of processing trade,and the financial scale has little effect.Finally,this paper puts forward some proposals to promote the financial reform of the FTA,encourage the innovation of trade finance,make full use of the capital market and strengthen the trade finance policy in the central and western regions and the northeast region.