Research On China’s Processing Trade Industry Gradient Transfer

Since the end of the18th century and the first half of the19th century, there have beenfour large-scale waves of international industrial transfer. Due to the changes of productionfactors and development conditions in some countries and regions, these countries andregions need to transfer some industries which lost competitiveness in their own countriesto other countries and regions in order to develop the more profitable and high-techindustry. Some countries and regions with suitable conditions began to undertake theinternational transferring industries which play a powerful role in promoting thedevelopment of world economy. In recent years, some enterprises in China begantransferring some industries among different regions compliance with internationalindustrial transfer rule.Since1978, China began to implement the reform and opening up which was carriedout from coastal areas to inland. The coastal areas began to develop international tradeactively relying on the convenient traffic conditions and preferential trade policies whilethe inland areas can’t participate in the foreign trade operations due to geographicalrestrictions. China’s economic development was relatively backward and the trade withother countries and regions were mainly primary products at that time, so the trade withother countries and regions concentrated on "three-plus-one" trading-mix (custommanufacturing with materials, designs or samples supplied and compensation trade)basically. After the development more than30years, the eastern coastal areas haveaccumulated huge amount of capital and the required technology. The scale of processingtrade is growing: the import and export scale of China’s processing trade amounted to$1.666billion in1980; the total trade scale of processing trade exceeded the general tradefor the first time in1996; the processing trade export volume reached1305.2billion U.S.dollars in2011which took35.84percent in the total export volume. After decades ofdevelopment, the processing trade has become an important way of China’s foreign trade. It solved part of the employment problem in China, and some enterprises learned advancedforeign technology to participate in the growing economic globalization, which has anextremely important influence in the improvement of China’s internationalcompetitiveness.However, the development of processing trade in western region is relativelybackward compared with the situation of eastern region due to the limitations of thegeographical location and industrial base of the central and western regions in China. Theeconomy in the eastern region is relatively more developed than the central westernregions which attracts a large number of talents from the central and western regions, sothe economic gap between the eastern region and the central、western regions are evenbigger which has adverse effects on the coordinated development of China’s regionaleconomic and social stability. A way to solve this phenomenon is the transfer of processingtrade industry without competitive advantage from the eastern region to the central andwestern regions, in order to promote the development of processing trade industry incentral and western regions. After decades of development, although the development ofprocessing trade industry in the eastern region has achieved great effectiveness, most of theprocessing trade industry is still in the low-end of international industrial chain with lowadded value which are not conducive to long-term development. Moreover, with theever-accelerating economic development, the rise factor price caused the rise productioncosts of some processing trade enterprises of the eastern region which affect the furtherdevelopment of enterprises. To resolve this situation, the processing trade enterprises ineastern region need to realize industrial transformation and upgrading and transfer someprocessing trade without advantage to other regions. Compared with the production factorsshortage situation in the eastern region, the central and western regions have greatadvantage in its production costs and can undertake some labor-intensive andresource-intensive processing trade industry. In order to improve the level of opening up ofcentral and western regions and narrow the economic development gap between theeastern、central and western regions, Ministry of Commerce issued policies to guide theprocessing trade industry in eastern region shift to central and western regions. Thegovernment encourages the processing trade enterprises in the central and western regions undertaking the transfer industries from the eastern region according to their ownadvantage. Under the action of low-cost and preferential policies, China’s processing tradeindustrial transfer has made certain achievements. The proportion the processing trade ofcentral and western regions accounted for the whole country has rose from2percent in2005to4percent in July2010. Processing trade gradient transfer has showed initialsuccess in quantitative term. However, what is the processing trade industry regionalgradient distribution situation in China? During the process of transfer and undertakeprocessing trade industries, how should the eastern region and the central、western regionshave clear understanding of the transfer and undertake processing trade industries?Researching on these issues has great significance for promoting the regional economicdeveloping of central and western regions and the coordinated development of China.Based on industrial gradient transfer theory, this article analyzes China’s processingtrade transfer situation with large amount of data. The main content is as follows:Chapter1: introduction. The first chapter includes the background and significance ofthis thesis, research ideas and research methods, the main content, and the innovation andinadequacies of this thesis.Chapter2: literature review. Elaborate the industry gradient transfer theory from boththe international and domestic perspectives.Chapter3: the status quo analysis of China’s processing trade industrial transfer. Firstof all, analysis the reason of China’s processing trade industries gradient transfer withdetailed data which shows the background and the direction of China’s processing tradeindustries transfer. Then, describes the status quo of China’s processing trade industrytransfer. Finally, summarize the process of the four international industrial transfer andtheir characteristics.Chapter4: the empirical analysis of China’s processing trade industries gradienttransfer. Obtain the three processing trade industry gradient situation of China usingindustrial gradient coefficient. Get the transfer industries and undertake industries of theeastern region and central、western regions by calculating the static agglomeration indexand industrial dynamic clustering index of21China’s processing trade industries in31provinces. Lastly, summarize the processing trade industries situation of China based on the calculation results.Chapter5: the recommendations on how to promote the transfer of China’s processingtrade industry. Based on the former analysis, put forward the recommendations of how topromote China’s processing trade industry transfer from the eastern region to the centraland western regions and how should the central and western regions seize the opportunityto undertake the right processing trade industries from the aspects of government,enterprises and industry associations.