An Analysis on Characteristics of China’s
Processing Trade and Its Development Strategy
Robert J.Carbaugh
School of International Business,
Southwestern University of Finance and Economics
1. The important position of processing trade in China’s foreign trade
In China, the trade of exports can be classified into three types according to the trade mode, namely common trade, processing trade, and other trade. From the “sixth five-year plan” to the “eighth five- year plan”, China’s foreign trade has kept on rising, centering on the common trade and assisting by the processing trade. In 1994, the total values of processing trade surpasd that of common trade for the first time. After that, the exports of processing促销论坛 trade are increasing annually, and its position in China’s foreign trade is rising.
Data shows that the proportion of processing trade to total exports has always surpasd 50% since 1995. This fact proves the important position of processing trade in China’s imports and exports of trade.
2. The characteristics of China’s processing trade and the reasons for the characteristics in recent years
我读懂了你作文2.1 Reviewing China’s total values of exports in last decade, we can conclude three characteristics of processing trade in China at prent.
Firstly, the position of processing trade in China’s exports of trade tends to be stable. The proportion of the values of processing trade to the total values of exports is about 55% or so from 2000 to 2006. This proportion is relatively stable. It indicates the importance of processing trade in China and its position becomes stable. Indirectly, it shows that the industrial structure and ctions of foreign trade are basically stable, and the income of processing trade is chiefly coming from some industries.雪豆蹄花汤
Secondly, the industrial structure of processing is upgrading. According to the comparative advantage ladder, we还魂草的功效 know that the comparative advantages of different countries, from the lower to the higher, are resource-intensive, non-skillful-labor-intensive, skillful-labor- and technology-intensive, rearch- and technology-intensive. Along with the execution of reform and open policy, China’s trade has gained great development and made huge progress增强创新意识 in science and technology fields. The processing trade has stepped into the new machine-dominant era from the textile-dominant era.
Thirdly, the added value of products in the processing trade has been greatly improved. The upgrading of industrial structure will inevitably increa the value of commodities and their added value, which can help us gain more profits from exports. That is vital for the further development of processing trade in China.
2.2 Why processing trade becomes more important in China. And why the quantities and total values of exports increa annually.
Firstly, thanks for the integration of international economy and the great division of trade,
鱼我所欲也的中心论点China has gradually become a giant in the field of processing trade. What our aim is to be a great power in the trade field at prent. Therefore, the processing trade has to catch up with the same space. Developing the processing trade, as the most important trade mode, firstly can drive the deepening development of other trade modes.
Secondly, according to Ricardo’s comparative advantage theory and Ohlin’s factor endowment theory, China has rich natural resources and labor resources. That is our advantages and endowments at prent. The trade theory tells us to make best u of favorable factors to develop the foreign trade.
Thirdly, the processing trade is a mode of international trade resource allocation in esnce. Different countries produce commodities at different levels bad on their unique comparative advantages and engage in trade. In fact, this process is for different countries accomplishing different production at different stages. As a result, resources are optimized, and costs of production are reduced. Finally, the competence is enhanced.
中国民间故事大全集Fourthly, China’s prent system is good for the development of processing trade. Comp
anies that are engaged in processing trade can enjoy favorable taxation. No tax-drawback procedure in exports. It can reduce companies’ capital occupation and management costs. Besides, market for exports is relatively reliable. What the companies have to do is to manage well production and obey the contracts. Costs are under control. As far as the local governments are concerned, the processing trade is an important power to ensure the scale and the growing speed of 小小不然exports, becau it is free from the impact of policy changes, such as taxation, tax-drawback, and exchange rate, and market fluctuation.
3. The potential problems in China’s processing trade
The analysis above helps us understand the importance of processing trade and the characteristics in its development.
In general, its development is optimistic. But we have to realize the fact that there are still many malpractices and potential problems in the development of processing trade. In specific, the problems are as follow.
(1) In recent six years, the proportion of the values of processing trade to the total values of exports is about 55%. It ems fixed and los its advantages in development.
(2) Companies depend on processing trade for a long time, being short of endogenous development ability of economy and lf-independent innovation.
(3) Some projects of processing trade are not associated with the upward or downward industries. The projects fail to benefit the growth of economy and science and technology, except solving employment.
