The Transformation And Upgrading Of Guangdong's Processing Trade

Along with reform and opening up, processing trade appears in China as a new thing. August 1978, Guangdong signed the first processing agreement of Wool Textile and then started a processing-on-order factory in Zhuhai, what marking the beginning of the development of processing trade in Guangdong province. With favorable policies, rich laborer resources and location advantage, processing trade in Guangdong developed fast and became the province's most important trading form. For nearly three decades, processing trade made great efforts in promoting economic growth, expanding international trade, offering lots of job opportunities, increasing financial revenue, upgrading the whole industry and improving local technology. In a word, processing trade played an important role in Guangdong's economic development.At present, Guangdong makes actively explorations for transformation from the extensive pattern of economic growth to the intensive model, from the comparative advantage based on cheap resources to the competition advantage centered with technological innovation. At the same time, because of the adjustment of processing trade policy, the continued appreciation of RMB, the rising of elements prices, further improvement of environmental standards at home and abroad and other macro-economic environment and policy changes, traditional mode of processing trade are now under threat and processing trade factories' disadvantage of "lock in" suffered more severe challenges. Through the analysis of processing trade's problems in Guangdong, this thesis clearly proposed the transformation and upgrading of processing trade. Then, this paper makes further analysis of foundations, obstacles and paths for processing trade's transformation and upgrading in Guangdong Province and finally, gives some suggestions on it.