Study On Delocalization And Upgrading Of China’s Costal Foreign Trade Processing Cluster Enterprise

Under the tension between the globe and locality, large aggregations of foreign trade processing industry came into being during the opening-up in the costal regions in China. The enterprises of these aggregations joined in the global production network as OEM and made a hit once. The processing value of trade occupied half of the total trade in China. In addition, processing trade brought favorable balance of trade, and thereby accumulated abundant reserve of foreign capital.However, with the economy stepping into "New Normal", labor shortage in costal regions occurred frequently and cost of production kept rising, which resulted in the reduction of competitive advantages of foreign trade processing industry. Under such background, with the guidance of leading manufacturers in GPN, many OEM started to transfer to Chinese Midwestern areas, Southeast Asia and even Africa. This is the phenomenon called "Delocalization", processes of enterprises leaving their localities, abandoning local characteristics, getting out of local relations and remaking strategic layout. The delocalization of those aggregated enterprises has direct influence on the local economic development, social employment, and transformation and upgrading of those enterprises. It is of great significance since those enterprises are caught in dilemma as "low-end locking" and "miserable growth". How to break through the global production network and achieve transformation and upgrading by delocalization has been an urgent problem.This thesis will emphasize the following two problems.1. What’s the motivation of delocalization of the aggregated enterprises of foreign trade processing in costal regions? 2. What’s the relation between delocalization and upgrading of the aggregated enterprises?Firstly, it would theoretically analyze the delocalization and upgrading. Starting with the concept and connotation of delocalization, on this basis it establishes R-SCP conceptual model of delocalization and upgrading to reveal the relation between them. What’s more, with value chain theory and margin theory of space profit, it would explore the mechanism that delocalization promote upgrading and investigate the influence of network power to final upgrading performance. Secondly, it would empirically analyze the delocalization and upgrading, describing the distributing and transferring conditions of the processing aggregations by selecting appropriate statistical indexes. With contrastive analysis of cases, it would further discuss how delocalization could promote upgrading. Finally, it would put forward problems probably occurring during delocalization as well as countermeasures.Delocalization and upgrading of those aggregated enterprises are closely connected. Aggregated enterprises reconstruct their competitive advantages, obtain more network power by delocalization and finally achieve upgrading. However, delocalization is not a certain way to successfully build self competitive advantages and obtain network power. Only under some circumstances that the guiding manufacturer has too strong network power to help the aggregated enterprises obtain their cost advantages. Thus the aggregated enterprises could not be upgraded and even degraded in some cases. Even so, it is better than the condition before delocalization because they could get more time for transition.