General

Currently, the global industrial chain and supply chain are accelerating their restructuring, posing significant challenges to the integrity of China's industrial system and the security and stability of the industrial chain. The transformation of international trade structure is also urgent.

Recently, the General Office of the State Council issued the "Opinions on Promoting the Stability, Scale and Structure Optimization of Foreign Trade", proposing to stabilize and enhance processing trade. Strengthen the guarantee of factors such as labor, energy, and credit, and guide the gradient transfer of processing trade to the central, western, and northeastern regions.

Wang Shouwen, the representative and deputy minister of the Ministry of Commerce for international trade negotiations, candidly stated at the State Council's policy briefing recently held by the State Council Affairs Office that under the influence of multiple factors such as trade frictions and the rapid development of China's general trade, the proportion of China's processing trade in total foreign trade has decreased to around 20%. But this does not mean that the role of processing trade has decreased. Processing trade still plays an important role in promoting China's opening up to the outside world, industrial upgrading, stabilizing the industrial chain supply chain, and integrating domestic and international markets.

Wang Shouwen revealed: "Currently, the Ministry of Commerce is preparing to take a series of measures to support the healthy and stable development of processing trade, one of which is to promote the gradient transfer of processing trade

Accelerated inward migration of processing trade

Why is there a gradient transfer of processing trade? Chen Jianwei, an associate professor at the National School of Opening up at the University of International Business and Economics, analyzed and pointed out to reporters that this is the result of a combination of multiple factors, rooted in a change in China's comparative advantage in processing trade. From the current regional economic development pattern in China, the rising factor costs and limited environmental carrying capacity in the eastern coastal areas have made the cost-effectiveness of continuing to develop processing trade very low. Therefore, the gradient transfer to the central and western regions and northeast regions is in line with the general economic law of reducing costs in industrial development and achieving agglomeration economy.

Hong Yong, an associate researcher at the E-commerce Research Institute of the Research Institute of the Ministry of Commerce, analyzed the reasons for the current gradient transfer of processing trade in the International Business Daily. There are mainly three aspects: first, changes in the international trade environment. The international trade export markets and investment environment of some countries and regions have undergone significant changes. The gradient transfer of processing trade can alleviate trade friction and export pressure, and enhance the competitiveness of China's processing trade. The second is the change in domestic market demand. Some traditional processing trade fields are facing problems of overcapacity and market saturation. The gradient transfer of processing trade can expand new industrial fields and meet the needs of the domestic market. The third is to improve the level of industrial upgrading. The gradient transfer of processing trade can promote the transformation and upgrading of China's industries, guide enterprises to transfer to industries with high added value and high-tech content, and improve the competitiveness of China's industries.

It is understood that the Ministry of Commerce has identified the first batch of 13 national processing trade industrial parks in 2021, mainly located in the core areas of urban agglomerations in the central, western and northeastern regions, which have good conditions to undertake industrial transfer.

Last year, 10 departments including the Ministry of Industry and Information Technology and the Ministry of Commerce jointly issued the "Guiding Opinions on Promoting the Orderly Transfer of Manufacturing Industry", aiming to further enhance the balance and coordination of regional development in China and fully leverage the strategic advantages of industrial development.

At the local level, Guangdong took the lead in introducing the "Several Measures for Promoting Orderly Industrial Transfer and Regional Coordinated Development" in March this year. Subsequently, several cities in eastern and northwestern Guangdong successively held work meetings to undertake the orderly transfer of industries, and various departments and cities quickly followed up on supporting policies. According to the deployment, this industrial transfer will also form 14 provincial-level supporting documents and 15 implementation plans for cities to undertake industrial transfer.

In recent years, by cultivating processing trade destinations, strengthening policy support, and improving docking mechanisms, China's gradient transfer of processing trade has achieved relatively good results. Data shows that in 2022, the proportion of processing trade in the central, western, and northeastern regions to the national processing trade has reached 29.4%, an increase of 7.4 percentage points compared to 2017. "Wang Shouwen said.

Forming new industrial clusters

Hebei Shijiazhuang, Inner Mongolia Ulanqab, Liaoning Shenyang, Anhui Chuzhou, Jiangxi Pingxiang, Guangxi Yulin... Recently, in order to continue guiding the gradient transfer of processing trade and further play the leading and driving role of key acceptance areas for processing trade gradient transfer, the Ministry of Commerce plans to recognize 15 new key acceptance areas for processing trade gradient transfer and 5 new demonstration areas for processing trade gradient transfer based on local application and expert evaluation.

The reporter noticed that Shijiazhuang is the first city in Hebei Province to be recognized as a key recipient of processing trade gradient transfer in the newly recognized list of key recipients of processing trade gradient transfer. After Guangxi has four national level processing trade gradient transfer key destinations, Nanning, Beihai, Qinzhou, and Wuzhou, Yulin has been selected again, This will also help accelerate the agglomeration of local processing trade related industrial clusters... "The gradient transfer of processing trade is a significant opportunity for industrial transfer zones, and the funds, technology, and talents brought by industrial transfer will form a new agglomeration economy in the transfer zone, driving the accelerated development of local urbanization, industrialization, and industrial economy.

Financial commentator Zhang Xuefeng holds the same view. He said that the gradient transfer of processing trade will increase employment opportunities for the industrial transfer zone, improve the level of regional economic development, and promote industrial upgrading and technological progress. In addition, the gradient transfer of processing trade can also promote coordinated economic development between regions and achieve balanced development of the national economy.

Chen Jia, a researcher at the International Monetary Research Institute of Renmin University of China, suggests that for regions where industries are moving in, it is necessary to fully understand the supporting policies, continuously strengthen communication and coordination with the industry chain moving out, and deepen exchanges and cooperation in investment attraction; Secondly, while deeply understanding one's own comparative advantages, increase investment in advantageous industrial chains with development potential due to factor endowments, and exert subjective initiative to carry out the continuation and innovation of landing policies according to local conditions; The third is to achieve precise policy implementation at the industry and enterprise levels, and promote solid and in-depth cooperation between the East and West in the industrial chain.

Hong Yong stated that the transfer of industries to regions requires continuous strengthening of infrastructure construction, improvement of service guarantee systems, creation of a good business environment, leveraging regional advantages, and enhancing the competitiveness of the entire region's industrial chain. At the same time, it is also necessary to pay attention to the sustainability of industries when transferring to regions, protect the ecological environment, and achieve sustainable economic, social, and environmental development.

In addition, Qiu Wenxu, Director of the Industrial Development Department of the Silk Road Academy of Social Sciences, emphasized that in order to attract more industries and processing trade enterprises to enter, the industrial transfer zone should make every effort to build an emerging "international trade transportation and trade hub" city, fully link the international trade market and demand, and attract market-oriented Chinese industrial processing trade enterprises to settle in. In short, in China, which leads the world in overall industrial infrastructure, the market and overseas resources are the "nest" needed for "attracting phoenix". For example, Harbin, Heilongjiang is building a capital that is open to Russia to the north, and Kashgar, Xinjiang is also striving to build a hub connecting Central Asian countries.