Research On Processing Trade Transferring To Central And Western China

Processing trade transferred to the central and western China was what Chinese government promoted vigorously since The Third Plenary Session of Eighteen.Due to the risen factor costs in recent years,eastern China gradually lost its advantages for the development of processing trade.However,factor costs were relatively low in central and western China,so that processing trade could be transferred to those places.While impacts reforms were taken place in central and western China,the world situation was changed rapidly.Southeastern Asia countries attracted more and more processing trade investments,while developed countries were trying to repatriated manufacturing capacity,all of these had some influences on processing trade transferring in China.Based on the above background,this paper studied on the topic of processing trade transferring to central and western China.First,this paper summarized results from other domestic and oversea scholars.Then it analyzed status quo on processing trade transferring happened in China.It further compared central and western China with eastern China and Southeastern Asian countries on factors of policy,labor,infrastructure and the extend of open.Compared to eastern China,although there were preferential policies and plentiful and cheap workforce in central and western China,the infrastructure was much worse than it in eastern China.What's worse,those places were less economically open.Compared to some Southeastern Asian countries,though the labor cost was higher while the degree of open was lower,central and western China had higher production rate and better infrastructure condition.In order to test impacts influential indicators mentioned above,empirical test were carried on by panel data from 19 provinces.The whole sample was divided into several subsample based on different area and different processing trade volume.After static and dynamic panel regression,the paper drawn some conclusions as follows:Processing trade transferred to central China was because it had relatively abundant skilled labor force,while it became more economically open.Skilled labor force was very limited in western China,so the policy,improvement of infrastructure and degree of open would help attracts processing trade transferring to these provinces.To took another view from different processing trade volume,we could find that relatively developed areas attracted processing trade transferring due to the overall influence of all the above indicators and path dependence effect.Those places continuing build their infrastructure;made up for the disadvantages,and enabled utilization of advantages of labor and policy.For those relatively backward areas,human capital stock was very low,policy advantage also could not play its role.Now the priority is not how much preferential treatments giving to these places,but to improve their infrastructure and make them more economically open.First make up the disadvantages,then the policy advantages could become helpful,and processing trade would be attracted to those places.Based on the results of overall analysis,the paper put forward several suggestions to central and western regions,for the purpose of better taken over of processing trade.