Research On The Gradient Transfer Of Industry Clusters In China’s Processing Trade

Processing trade refers to a country’s imports of raw materials, parts and components,which are assembled in the domestic enterprises and exported to foreign countries to attainthe foreign currency. In China, according to the relevant provisions of the Customs of thePeople’s Republic of China on Processing Trade Goods Measures, processing trade isdefined as operating enterprises import all or some parts, raw materials, packagingmaterials and other materials and parts, and export after the processing or assemblyoperations. According to the provisions of the approach, the processing trade, includingfeed processing and processing. Feed processing refers to the imported materials andparts imports purchased by business enterprises would be re-exported; processing is thatthe imported materials and parts are provided by foreign enterprises and domesticprocessing enterprises do not need to afford external payment but only to assemble thematerials in accordance with the requirements of the overseas enterprises.As one of the troika constituting points of economic growth, exports not only play aroll on the country’s foreign exchange reserves but also on the growth of the domesticeconomy. Processing trade has a significant role in boosting the China’s economic growthas the main part of China’s export trade, apparently can not be underestimated. China’seastern coastal areas, the first area of reform and opening up, has the natural oceanconditions, abundant labor and capital, the processing trade in the eastern coastal provinceshas been booming. After three decades of development, the coastal areas get hugeeconomic achievement and a trend of gradually widening the economic gap with thecentral and western regions appears. According to Japanese scholar Akamatsu, whoproposed the flying geese theory, processing trade industry shifts between countries, andthis phenomenon is to be highlighted in the Four Asian Dragons economic growth.Similarly, Akamatsu also thought that in a country there would be similar industrialtransferences subjected to various kinds of constraints. According to the flying geesetheory, the gradient transference of processing trade is a dynamic process. Within acountry, different regions form the dynamic process according to their different factorendowments. Gradient transference of processing trade not only undertake the easterncoastal areas to make room for new industries which favors the adjustment of industrialstructure, but also provide an opportunity to the development of processing trade in thecentral and western regions. In view of the clustering effect of the processing trade industry, the gradient transference will play a positive role in China’s overall economicdevelopment level to narrow the economic gap between the east and the middle-westregions.This paper bases on the processing trade development of eastern coastal areas and thecentral and western regions, exploits the processing trade industry data to analyze andprocessing trade in China. At the same time, make a model of China’s processing trade ofindustrial clustering effect. Finally, offer the proposed countermeasures to the difficultiesfaced in the development of processing trade clusters in China.