Upgrade Processing Trade Based On The Theory Of Division Of Labor Within The Product

Nowadays, with economic globalization and scientific technology development, the international division gradually penetrated into intra-product specialization from inter-industry division of labor, industrial products within the division of labor.Each country specialized in process and stage of production in different countries and regions. Intra-product specialization has become an important phenomenon in the world.Processing trade is a major form of intra-product specialization. Since the reform and opening up, China's processing trade has made great achievements, promoting economic growth and eases the employment pressure, adjusting industrial structure to the extent. However, there are many problems, such as low value-added, short value chain, foreign company leading, continuing trade surplus.On the background, this passage expects to search for the way to upgrade processing trade based on the theory of intra-product specialization.Intra-product specialization is certain country produce different process of production. Smile-curve and value chain show, the processing trade is the major form of intra-product specialization. The developed countries occupy upstream and downstream, which are parts of high value, gaining more profit.Since reform and opening up, China's processing trade has gotten great achievements. Meanwhile, it has some features. They are include deepening degree of intra-product specialization, high value-added rate and foreign enterprise entity and developed countries occupied market structure.Through this analysis, summarizing the problems of processing trade and giving the reasons, including low domestic procurement, short industry value chain, weak market competitiveness, and backward system.Theory of intra-product specilization can guide how to upgrade processing trade. Develop high-value stream, encourage local purchasing, advance technical level. The strategies include developing overseas processing trade, giving investment in those less developing countries; undertaking international outsourcing to accelerate processing trade promotion; perfecting government service.