Technology Spillover Effect Of Processing Trade

Thirty years of reform and opening up, China’s processing trade has realized great leapforward development, in2012, China’s processing trade import and export volume hasexceeded$1.3trillion, accounting for the total amount of China’s foreign trade exports36.11%, processing trade has become one of the most important ways to participate ininternational division of labor. FDI has become the main driving force to promote theeconomic development of Chinese. In2012, China attracted foreign direct investment achieve$1117.2billion, and the newly approved foreign-invested enterprises have run up to24925; bythe end of2012, the national approval of the establishment of foreign-funded enterprise hasachieve92.4million and the actual utilization of foreign of china has exceed capital$1.2trillion. In twentieth Century90years FDI has gradually become the main body of China’sprocessing trade, the “global production network governance” of Multi-National Corporationhas become the processing trade operation mechanism. Obviously, in the basis of internationalproduct specialization, these three important channels of international technologyspillovers—FDI,“international trade” and “global production networks”——achieve a betterfusion in the processing trade. Therefore, the processing trade is an effective way that China isto participates in the international division of labor, but also obtain effective way for China toachieve international technology spillovers. With more and more FDI pouring in, China hasgained foreign trade prosperity and high-speed economic increasing. But at the same time, wehave been at the cost of excessive consumption of resources, lack of core technology,pollution strengthening and lack of industry transition space, etc. FDI in China is in the wayof processing trade with materials and products both outward just simple process andassembly procedure. The effect of FDI in processing trade way such as drive or domesticindustry and tax devotion is in dispute except distinct employment promotion. How about thetechnology spillovers in processing trade way in China will effect more the policy ofprocessing trade and FDI. To answer above theoretical argument, I study on the nationwideprocessing trade as a research object. In the base of analysis of the channel of technologyspillovers, I’m to fully answer this question. Through focuses on the analysis of developmentsituation of processing trade in China and the existing problems, I give suggestion on how toimprove technology spillovers of processing trade way.