The Transformation And Upgrading Of China's Processing Trade

With the integration of world economy and the internationalization of production, processing trade comes into being and plays a more and more important role in the international trade. Nowadays it has become one of the most important trade models of China. It's an important way for developing countries to participate in the international division.Since the first processing trade corporation was built in 1978. China's processing trade has developed steadily for more than twenty years. It has made historical contributions to the growth of economy, the employments and the upgrading of industrial structure. However, there are many shortcomings through the development of processing trade, such as low content of technology, unbalanced regional distribution and continual International trade conflicts. Under this circumstance, Vice-Premier Wu Yi said that"China should continue to develop processing trade so as to attract multinational corporations to transfer advanced technology, more value-added processing manufacturing sectors and R&D centre to China. Then we can upgrade our processing trade and make it containing more advanced technology and much more added value."What she said pointed out the direction for the transformation and upgrading of processing trade.This thesis focuses on China's processing trade and tries to analyze the problems about the transformation and upgrading of the processing trade. It deeply analyzes the present status, contributions and problems of processing trade in China. Then it illuminates the opportunities and challenges. Based on the successful experience of other countries and areas, it has put forward countermeasures to the transformation and upgrading of processing trade. According to this clue, the thesis can be separated to the following six parts:The first part is the introduction. It explains the practical meanings of this thesis and summarizes the viewpoints of the scholars. Then it works out the basically structural frame and decides the study method of the thesis. The second part is to introduce the definition of processing trade and theories. It summarizes the definitions of different scholars in order to give us a clear understanding of processing trade. It makes a comparison between general trade and processing trade. Comparing to developed countries,our processing trade has a long way to go. Then it joins economic theories to national practice and gives a definition to the transformation and upgrading of processing trade.The third part is to deeply analyze the present status, contributions and problems of China's processing trade. Firstly, it introduces the present situation. Nowadays imported material processing trade has become the main way. The foreign corporations are the main business entities of processing trade. The products of processing trade are upgraded. Then,it analyzes its functions. Processing trade has made a historical contribution in China's opening up and economic development. It has contributed to the growth of economy and International trade. It has provided jobs for millions of people and helped solve China's problems of capital shortage and lack of technology. It has made contributions to the upgrading of Industrial Structures. However, it also has many problems. For example, most of the processing trade is labor-intensive with low contents of technology and added value, only leaving limited profit to Chinese corporations. The regional distribution of processing trade is not equivalent. Furthermore, processing trade has led to more and more International conflicts.The fourth part is to analyze the reasons, opportunities and constraints of the transformation and upgrading of processing trade. This thesis analyzes the reasons from the International conflicts, the increasing of the labor cost, limited profit to Chinese corporations, economic security and the new-style industrialization. Then it analyzes the opportunities and constraints at home and abroad. Internationally speaking, the globalization of Multinational Corporation's R&D and service brings opportunities to the transformation and upgrading of processing trade. Domestically, the adjustment of Export Tax Rebate Policy and Marginal Industry westward movement will help promote the transformation and upgrading of processing trade. In the end, the chapter analyzes the constraints from domestic and international aspects. Internationally speaking, the threat of competitors and the implementation of Multinational Corporation's social responsibility put pressure on the transformation and upgrading of processing trade. Domestically, some factors restrict the development of the processing trade, for example, the unreasonable structure of supply and demand for labor, the low levels of production technology, the old mechanism of state-owned enterprises,some Policy factors and so on.The fifth part is to analyze the transformation and upgrading of processing trade in Singapore and Taiwan province, then summarize the successful experience of the transformation and upgrading of processing trade from the government plans, policies to attract foreign investment, protection of intellectual property rights, domestic procurement and international logistics.The sixth part is to analyze the direction of the transformation and upgrading of processing trade. Then it puts forward countermeasures to promote the transformation and upgrading of processing trade in China.