(A) the policies of different departments do not match.

Processing trade management involves customs, quality inspection, foreign exchange, taxation, foreign trade and other departments, and the coordination of policies among departments is very important for the healthy development of processing trade. However, in practice, due to the lack of formal inter-departmental policy coordination mechanism, policies between departments are inconsistent and incompatible, which seriously affects the work efficiency of processing trade supervision departments and the operation of enterprises. For example, due to the untimely tax refund, the phenomenon of "one-day tour" in processing trade is becoming more and more serious, which reduces the operating efficiency of enterprises, increases their operating costs and weakens their international competitiveness. If the function of the existing bonded zone is brought into play, it can replace the transit function of Hong Kong, and the number of "one-day trips" abroad will be greatly reduced. However, the provisions of the customs and tax authorities on the bonded area are incompatible. The customs thinks that the goods shipped to the bonded area are regarded as exports, but the tax authorities think that only the goods leave the country can enjoy the export tax rebate. This provision of the tax authorities not only makes the domestic "one-day tour" of processing trade unable to replace the overseas "one-day tour", but also greatly hinders the establishment of the international procurement center in the bonded area and the development of international logistics business. In fact, the tax authorities have different regulations on tax refund between bonded areas and export processing zones, and domestic goods can enjoy export tax refund when they enter export processing zones.

In the questionnaire survey of processing trade enterprises, enterprises regard "the regulations of tax, foreign exchange and customs departments are not matched" as the primary problem in the current processing trade policy and management (see table 1).

Table 1 The main problems that enterprises think exist in the current processing trade policy and management.

The main problems are arranged in order of importance.

The regulations of tax, foreign exchange and customs departments are inconsistent 1.

Management regulations are too strict and procedures are too many.

The effective coordination of relevant management departments is not enough 3

The policy of encouraging domestic procurement is not obvious.

The value-added tax cannot be refunded for the deep processing carry-over of processing enterprises.

Inefficiency of management institutions

Managers are too arbitrary to operate 7.

Margin accounting system increases enterprise capital cost 8

Carry-over of deep processing is regarded as domestic sales tax 9

Unclear approval regulations 10

Enterprises have nowhere to consult when they encounter problems 1 1.

Enterprise smuggling is illegal, resulting in unequal competition 12

Managers deliberately make things difficult for enterprises 13

Enterprises are treated unfairly, and there is no way to complain 14.

Source: According to the enterprise questionnaire survey of the research group.

(B) deep processing carry-over policy is not uniform

The disunity of deep processing carry-over policy has become the focus of current processing trade policy. The deep processing carry-over policy covers a wide range. According to the survey, about 25% of imported materials in Shandong, 40% in Jiangsu and Zhejiang, and 60% in Fujian and Guangdong need to be carried forward by deep processing before export (minutes of the meeting to study the related issues of deep processing). According to customs statistics, in 2000, 80% of processing trade enterprises in Shenzhen were involved in deep processing carry-over, and the import and export value of carry-over accounted for 20% of the import and export value of processing trade in the same period; There are 2 1% processing trade enterprises involved in deep processing carry-over, and the import and export value of carry-over accounts for 12% of the import and export value of processing trade in the same period.

The Notice of the General Office of the State Council on Forwarding the Opinions of the State Economic and Trade Commission and other departments on Further Improving the Margin Account System of Processing Trade Banks stipulates that the relevant state departments shall exercise bonded supervision over the deep processing carry-over business as import and export trade. However, the tax authorities believe that the deep processing of bonded goods belongs to domestic sales, and according to the provisional regulations on value-added tax, value-added tax should be levied and refunded when exporting; Domestic materials and parts processed into semi-finished products are not allowed to be refunded. According to the relevant regulations of the State Council, since 200 1 1, all enterprises should uniformly implement the policies of intermediate link taxation and export link tax refund. Obviously, the policies of the tax authorities are not consistent with the documents of the General Office of the State Council.

The policy of "exemption, credit and refund" for goods carried forward by processing trade enterprises has changed the previous bonded policy for goods carried forward by deep processing. This policy change will directly hit the enthusiasm of processing trade enterprises to lengthen the domestic industrial chain when the problem of cumbersome export tax refund procedures and long cycle has not been solved. This inconsistency in policy has caused confusion in the specific implementation of policies, and there are obvious differences in practices in different regions. Most areas are tax-free, some areas adopt general ledger accounts, and some areas are tax-free.

(3) Some policies are contrary to the direction of encouraging processing trade to lengthen the domestic industrial chain.

The development of processing trade has three directions: scale, grade and added value. To achieve the first goal, we need to combine the comparative advantages of China and create an overall institutional environment suitable for the development of processing trade. In view of the second goal, it is necessary to attract enterprises with high technical level to engage in processing trade in China and encourage processing trade enterprises to carry out technological development and product upgrading. To increase the added value, processing trade enterprises should be encouraged to lengthen the domestic industrial chain, which can be traced back to the upstream parts industry and extended to the downstream logistics industry respectively. The most important thing is to encourage them to improve the domestic procurement rate. Increasing the added value is not only related to the actual economic benefits that China may get from processing trade, but also related to the long-term economic development of China.

However, in recent years, in the adjustment of processing trade policies, various departments often pay more attention to how to prevent illegal enterprises from "smuggling" and "defrauding tax rebates" by using processing trade policies, while ignoring encouraging enterprises to improve the domestic procurement rate. Some policies are objectively not even conducive to encouraging enterprises to improve the domestic procurement rate. For example:

The export tax rebate is carried out according to the plan rather than the export performance, which leads to more and more tax rebates in arrears, increases the financial burden of enterprises, and also hinders the enthusiasm of domestic procurement in processing trade, which is one of the important reasons for the "one-day tour" of intermediate inputs in processing trade abroad.

The long-term implementation of the policy of non-tax refund for domestic procurement of processing with imported materials has reduced the enthusiasm of domestic procurement of processing with imported materials. Before the 1994 tax reform, the value-added tax rate was very low, and the domestic value-added rate of feed processing was almost the same. The domestic value-added rate of feed processing was 23. 1%, which was 2.22 percentage points higher than that of feed processing. In 200 1 year, the domestic value-added rate of processing trade was 46.32%, while the domestic value-added rate of processing trade reached 6 1.58%, which was 15.26 percentage points lower than that of processing trade. From the comparison of the changes of domestic value-added rate between processing with materials and processing with materials, it can be seen that the tax rebate policy has an important impact on the domestic procurement of processing trade.

Although our government has been emphasizing on improving the domestic purchasing rate of processing trade in recent years, because many provisions in our current policy contradict the goal of encouraging processing trade to improve the domestic purchasing rate, processing trade enterprises feel that the current policy is inconsistent with the government's propaganda goal. From the survey results, enterprises think that "the policy of encouraging domestic procurement is not obvious" is the fourth problem in the current processing trade policy.

In essence, the problem that the direction of policy adjustment is inconsistent with the long-term policy objectives exposes the defects of China's current policy-making mechanism. When formulating policies, all departments often proceed from their own objectives and management. For example, customs pays attention to how to strengthen supervision to prevent smuggling, and tax authorities pay attention to how to prevent tax loss, but they seldom pay attention to the fundamental policy goal of how to encourage processing trade to extend the domestic industrial chain to improve its contribution to the national economy. Therefore, although the relevant policies of the department are conducive to the realization of local goals, they are not conducive to the realization of macro goals, and the opportunity cost of policies is quite high. To ensure that specific policy provisions are conducive to the realization of macro goals, there must be a strong policy coordination mechanism outside the department. This is a major defect of the current policy-making mechanism in China.

(D) Some policies and management methods in processing trade do not meet the needs of the development of processing trade.

With the deepening of economic globalization, the speed and intensity of international industry transfer to China have been greatly strengthened, and some new changes have taken place in China's processing trade. However, the current policies and management methods have failed to make appropriate adjustments to the new changes in processing trade, and the contradiction between policies and management has become increasingly prominent in actual operation.

The traditional management mode is far from meeting the needs of the development of processing trade in emerging industries represented by IT industry. Since the mid-1990s, under the guidance of Taiwan Province's investment in Chinese mainland, a large number of overseas IT industries have moved to China to engage in export processing trade. At present, IT products have become the first category of goods exported by China. IT industry is an industry with obvious international division of labor, and its operation has the characteristics of "global procurement, electronic orders and zero inventory", which greatly shortens the cycle from procurement to delivery, and puts forward requirements for customs clearance efficiency far higher than traditional products. However, the management of processing trade in China still adopts contract and manual management in the early 1980s, which can't meet the requirements of IT industry for processing trade. For example, the processing trade of IT products only has electronic orders, and there is no contract. In order to meet the requirement that processing trade needs the approval of foreign trade departments, enterprises have to artificially fabricate a meaningless contract; IT products put forward high requirements for customs clearance efficiency. Due to the low efficiency of customs clearance in China, many multinational companies put their processing trade of high-end products outside China, and can only process low-end IT products in China, which is not conducive to achieving China's policy goal of improving the level of processing trade. Suzhou and Shenzhen have begun to try to reform this regulatory model. Suzhou Customs has managed four IT enterprises in the customs area through networking. These enterprises are characterized by a large number of materials and parts, which are difficult to manage with manuals. The specific supervision procedure is that the Foreign Trade and Economic Cooperation Bureau will record the total amount of processing trade enterprises, and the customs will dock with the supervision enterprises. The customs will directly extract data from the designated database, check the unit consumption of products through spot checks, and check the inventory regularly, and the check time is consistent with the enterprise inventory. Finally, the accountant will write off and the difference will be written off. Shenzhen implements the mode of networked bonded factory, that is, the whole enterprise is fully enclosed and supervised by network and electronic camera technology, and the whole factory is equivalent to a bonded area. Compared with the practice of Suzhou Customs, this method can effectively prevent smuggling and "flying materials" in the process of carry-over, but the investment is large and the general enterprises may not be able to afford it. Either way, online supervision of large processing trade enterprises is the development direction of processing trade management in the future. At present, we need to unify our thinking as soon as possible and promote more consistent practices throughout the country to avoid unnecessary efficiency losses caused by regional differences.

The current policies and regulations do not meet the requirements of establishing a procurement and distribution business center in China. With the rapid development of processing trade, China has formed a huge manufacturing capacity and become an important export base of labor-intensive manufactured goods in the international market. Therefore, many large multinational companies plan to set up procurement and distribution centers in China and develop logistics business. However, China's regulations on tax refund policy and bonded area (warehouse) supervision cannot meet this requirement, which greatly hinders the extension of processing trade to downstream industries.

(E) Some new policy adjustments are divorced from the actual development of processing trade enterprises, and the policy effect is lower than expected.

Take the export processing zone policy as an example. Export Processing Zones (EPZs) are processing trade management methods adopted by many countries in the world and have achieved remarkable results. Drawing lessons from international experience to establish export processing zones in China is conducive to improving the management level and efficiency of processing trade. However, since the introduction of the export processing zone policy, the actual operation efficiency is not ideal, and few enterprises in many export processing zones enter the zone. The reason is that the relevant provisions of export processing zones are divorced from the reality of the development of processing trade.

The willingness of processing trade enterprises to move into export processing zones is relatively low. As can be seen from the survey results of the research group (see Table 2), 86% of the surveyed enterprises are not prepared to invest in export processing zones, and only 2.6% of the enterprises are prepared to move their existing factories into export processing zones.

Table 2 Willingness of processing trade enterprises to move into export processing zones

Number of willing enterprises

Move the existing factory into 13

Move into new production capacity, but do not move existing production capacity 59.

Not going to invest in export processing zones.

Total number of enterprises surveyed 509

Source: According to the enterprise questionnaire survey of the research group.

Table 3 Reasons why the investigated enterprises are unwilling to move into export processing zones

Number of public enterprises

The relocation cost is too high.

The export processing zone policy is not conducive to domestic sales of products.

It is inconvenient for enterprises in the region to purchase domestic parts.

The efficiency of supervision in the area is not higher than that outside the area 18.

The land cost in the area is 50 higher than that outside the area.

Do not understand the export processing zone policy 143

Total number of enterprises surveyed 462

Source: According to the enterprise questionnaire survey of the research group.

There are many reasons why existing processing trade enterprises are unwilling to move into export processing zones (see Table 3). For the existing enterprises, the relocation cost is high, and 58% of the enterprises surveyed regard this as the reason for not moving into the export processing zone. In addition, 3 1% of the interviewed enterprises refused to make a decision to move in because they did not understand the export processing zone policy. In addition to these two reasons, some specific regulations do not meet the needs of enterprise development and become the reasons that hinder enterprises from entering the zone. At present, more and more processing trade enterprises are no longer 100% export enterprises, and both domestic and foreign markets have become the mainstream. The management policy of export processing zones has greatly improved the supervision efficiency for enterprises with "big imports and big exports", but it has many inconveniences for processing trade enterprises closely related to domestic industries and markets. For example, enterprises in the export processing zone may not implement manual management, but deep processing enterprises outside the zone must use manuals, and enterprises in the zone cannot do business with enterprises outside the zone without manuals. For processing trade enterprises whose products are sold domestically, and processing trade enterprises outside the export processing zone are sold domestically, they only need to pay customs duties and value-added tax on imported parts according to the tax rate of imported parts. However, when processing trade enterprises in the area sell products in China, the tariff rate of finished products shall be applied when paying back the tariffs. In most cases, the tariff level of finished products is higher than that of spare parts, which will increase the domestic sales cost of enterprises in the region and weaken their competitiveness in the domestic market. In short, the relevant provisions of the export processing zone have greatly weakened the connection between enterprises in the zone and the domestic market, which is not attractive to most enterprises that take into account both domestic and foreign markets. In addition, the weakening of the connection between enterprises in the region and the domestic market is also inconsistent with the development goal of lengthening the processing trade industrial chain. This determines that export processing zones are only suitable for newly-built 100% export-oriented processing trade enterprises, and there should not be too many domestic purchases. For such enterprises, the supervision efficiency of the bonded area has certain advantages. For other processing trade enterprises, the vast majority will remain outside the zone. Therefore, the export processing zone policy can only be conducive to the rational distribution of the incremental part of processing trade, but can not change the existing "stock" phenomenon of processing trade. If the orientation of export processing zone policy is to create a local small environment with higher supervision efficiency for 100% export-oriented enterprises that can get in and get out, then the export processing zone policy is successful. If we focus on changing the "stocking" state of processing trade and strengthen the supervision of processing trade, we are doomed to fail to achieve obvious results.

Second, the adjustment direction of China's processing trade policy in the future

Policy is a reflection of reality, and we must keep pace with the times to promote development. The processing trade policy should proceed from the current situation of China's processing trade development, and on the basis of standardized management, promote processing trade to give full play to its potential of technological upgrading, industrial upgrading and lengthening the industrial chain. Therefore, the processing trade policy should focus on the following aspects:

(a) the export tax rebate policy is implemented for domestic procurement of processing trade exports.

In 20001year, the import value of processing trade with materials was $28.9 billion, accounting for 30.7% of the total import value of processing trade. Affected by the current policy of non-tax refund for domestic sales of feed processing, the domestic sales value-added tax rate of feed processing is lower than that of feed processing by 15 percentage points. If the processing trade imports materials and parts for domestic purchase tax rebate, it will effectively promote processing trade enterprises to expand the use of domestic materials and parts, promote the export of domestic upstream industries, and lengthen the domestic industrial chain of processing trade. According to the calculation that the domestic purchasing rate of feed processing reaches the domestic purchasing rate of feed processing, the domestic purchasing amount of feed processing will increase by about 4.4 billion US dollars in 200 1 year, and will also increase year by year with the growth of feed processing. However, it should be emphasized that the extension of the national value chain of processing trade is directly proportional to the increase of regulatory costs and risks. Therefore, while taking measures to promote the extension of the national value chain of processing trade, we should study how to further improve the supervision efficiency.

(B) improve the deep processing carry-over policy

The carry-over of deep processing involves a wide range and the situation is very complicated. The deep processing carry-over policy essentially involves two issues. One is whether the bonded supervision policy will continue to be implemented after the imported materials are processed domestically, and the other is whether the domestic materials used for deep processing will be refunded. Due to the high complexity of these two issues, different departments have different opinions on the adjustment of deep processing carry-over policy.

For the first question, the competent economic and trade departments tend to maintain the current policy of tax protection (exemption); Finance and taxation departments advocate the policy of "exemption, credit and refund"; Based on the above two policy choices, the regulatory authorities advocate that some excellent, law-abiding and national industrial policy-oriented enterprises should continue to implement bonded supervision policies, and other enterprises should implement the policy of "making progress and retreating" for deep processing trade.

For the second question, there are many differences among departments. The competent economic and trade department believes that the domestic raw materials used by deep processing enterprises should be exempted from payment and refund step by step, that is, the domestic raw materials used by processing trade enterprises should be given tax refund when they are carried forward, and the carried-over products (including domestic raw materials) should be subject to bonded supervision by the customs; The finance and taxation department thinks that the step-by-step policy of "exemption, offset and refund" is too risky and difficult to operate; The regulatory authorities believe that the bonded supervision of domestic materials will further increase the contradiction of insufficient regulatory capacity.

Combined with the opinions of various departments, the research group believes that the deep processing carry-over policy should be considered as a whole and implemented step by step. In order to avoid an excessive impact on processing trade in the short term, the current policy should be maintained as a whole and only partially improved. In the medium and long term, the current policy should be fundamentally adjusted according to the principle of encouraging processing trade to improve domestic procurement rate and added value and improve supervision efficiency. In order to guide enterprises to reasonably and truly implement the spirit of Comrade Wu Yi's instruction of "optimizing stock, controlling increment, standardizing operation and improving level", once the policy design scheme is determined, the content and implementation schedule of policy adjustment will be announced.

Specifically, in the short term (for example, within 3 years):

-The current carry-over policy for deep processing of processing trade is still maintained, that is, the carry-over link is regarded as export, exempt from value-added tax, and the customs continues to exercise bonded supervision over imported materials and parts.

—— Domestic materials and parts used in the deep processing carry-over link will not be levied or refunded, and the value-added tax will enter the product cost.

-The products sold by enterprises to export processing zones and bonded zones are regarded as exports, that is, the products carried over from deep processing can be exported to export processing zones and bonded zones for verification; China products entering export processing zones and bonded zones can get export tax rebates.

-Products sold to enterprises outside export processing zones and bonded areas are regarded as imports, and those used in processing trade can be subject to bonded supervision. In this way, at least "domestic one-day tour" can be used instead of "overseas one-day tour", which can save the cost of processing trade, increase the attractiveness of export processing zones and bonded zones to enterprises, and guide enterprises to gradually enter the zones.

-For bulk raw material commodities that are easy to manage, referring to the practice of "advancing with production" of steel products, when the production enterprises sell them to processing and export enterprises, they are regarded as exports and apply for VAT refund.

Medium and long term (after 3 years):

Keep the last three short-term policies and make the following adjustments:

-classified management of deep processing carry-over of processing trade. The deep processing of processing trade enterprises outside export processing zones, bonded zones and electronic networking supervision zones shall be subject to bonded supervision. The products of other processing trade enterprises can be exported to overseas or export processing zones and bonded zones. If deep processing is carried forward, the customs shall handle the enterprises carried forward in the first step in accordance with the provisions on domestic sales of processing trade. Other links are carried forward as domestic sales, and tax is paid to the tax authorities according to regulations. Transferred enterprises, as domestic materials, enjoy the policy of "exemption, credit and refund". In this way, the customs only need to supervise the deep processing of export processing zones, bonded zones and electronic networking enterprises, and the supervision efficiency will be greatly improved.

-Implementing the policy of "exemption, arrival and return" for domestic materials and parts used for deep processing.

-cancel the existing export incentive policies of governments at all levels that do not conform to the relevant rules of the WTO, and the remaining funds will be used to compensate the losses caused to enterprises by the untimely export tax rebate. In this way, even if the tax refund is delayed, the enterprise will not bear too many financial losses, which essentially guarantees the timely tax refund.

-Full tax refund, raising the export tax rebate rate to the same tax rate as the value-added tax, and ensuring zero domestic value-added tax rate for export products.

(3) Promoting technological progress in processing trade.

-Implementing a more effective management system for high-tech products. The current manual and contract management methods are more suitable for the management of traditional product processing trade with stable relationship between upstream and downstream enterprises and slow price changes, but not suitable for the electronic product processing trade with rapidly changing prices in the international market and numerous production supporting enterprises. Therefore, it is necessary to adapt to the characteristics of high-tech products such as electronic information products, such as "global procurement, electronic orders and zero-inventory production", reform the existing contract and manual management methods, cancel unnecessary contract approval links, explore electronic manual management methods, and improve supervision efficiency.

-Improve customs clearance efficiency. The pilot project of "Great Customs Clearance" implemented by Shanghai Customs has explored many good experiences for improving the management efficiency of port management departments and reducing the operating costs of enterprises. The relevant departments should summarize as soon as possible and extend it to all ports in the country.

-strengthen the coordination of the work of various regulatory departments and improve the efficiency of supervision.

-The development of processing trade provides a powerful manufacturing platform for technological development based on information technology. The state should strengthen the protection of intellectual property rights such as technology and brands, and promote the development of R&D and D activities.

(four) to promote the transfer of processing trade to the downstream procurement and distribution areas.

The development of processing trade makes China one of the important manufacturing bases in the world. The rapid development of processing trade export has laid a solid foundation for the development of international procurement and distribution business, and it is also an inherent requirement for the industrial chain to extend downstream. Developing downstream purchasing and distribution business of processing trade will greatly increase the added value of processing trade in China.

-Adjust the bonded area policy and establish an international procurement and distribution center based on the bonded area. Therefore, domestic products entering the bonded area should be regarded as exports, and the tax authorities should give export tax rebates to the goods exported to the bonded area.

-Developing an internationally competitive international container port. With the rapid development of processing trade in the hinterland, China's ports such as Shanghai and Shenzhen have become the top container ports in the world. However, due to the complicated import and export management of international transit business, the management system is far from meeting the requirements of developing international transit ports. Therefore, we must reform the current port management system according to the requirements of developing international transit business.

Since the reform and opening up, processing trade has developed rapidly in China, and now it has surpassed general trade to become the most important trade mode in China, occupying a very important position in China's foreign economic and trade. Many documents have made a detailed analysis of the rise of processing trade and its role in China's open economy. However, due to the characteristics of processing trade itself and the shortcomings in China's development process, such as weak correlation with domestic industries, China's static comparative advantage has been solidified, general trade has been squeezed, which is not conducive to technological progress, and regulatory difficulties are likely to lead to smuggling and tax loss. Some scholars and people in practical departments have raised many questions about the further development of China's processing trade and the current preferential policies. Therefore, it is necessary to discuss how to develop China's processing trade in the future and how to adjust the current policies.

First, the premise and framework of analysis

The analysis of China's processing trade policy in this paper is based on the following premises and framework.

1. Outline of the Tenth Five-Year Plan for National Economic and Social Development in People's Republic of China (PRC) (hereinafter referred to as the Tenth Five-Year Plan). As an integral part of the national economy, processing trade should obey and serve the overall economic development strategy of China. Our government has formulated the Tenth Five-Year Plan, which is the guiding plan for China's economic and social development in the next five years. Therefore, the development of processing trade and policy adjustment should also be guided by this. Under the guidance of the overall goal of economic development put forward in the Tenth Five-Year Plan, this paper analyzes the current processing trade policy, puts forward the principles of China's processing trade development and policy adjustment, and on this basis, puts forward some suggestions on processing trade policy adjustment.

2. Join the World Trade Organization (WTO). China has joined the WTO, which will greatly change the external environment of China's economic construction and development, with both favorable and unfavorable changes. In order to maximize the advantages and avoid disadvantages, we should fully consider the impact of China's accession to the WTO when formulating all policies. We will mainly discuss the development and policy adjustment of China's processing trade from the aspects of the substitution of intermediate products in processing trade, the export of processing trade and the fair settlement of trade frictions after China's entry into WTO.

3. Analytical framework of processing trade "import-processing-export". In fact, processing trade is the definition of the special trade mode of "two ends are outside and the middle is inside". Our understanding and research on processing trade mainly focus on two aspects: one is "processing" and the other is "trade mode". "Processing" belongs to the "intermediate" link. It is a process in which the host country imports the production factors with comparative advantages and processes the input factors, which is manifested in international division of labor. As a "trade mode", the essence of processing trade is "two ends are outside". Whether it is "processing with materials" or "processing with materials", the main raw materials and spare parts are provided by foreign businessmen or purchased from the international market, and the processed products must be exported. In order to take advantage of "processing trade", many governments often implement relevant policies and measures to manage the import of raw materials and other intermediate products and the export of processed products. The policies and measures implemented are even more encouraging, especially to ensure the export of processed products. This is because processing trade plays an irreplaceable role in the development of China's economy and foreign trade. It is not difficult to understand why the research on processing trade and related policy discussions are always inseparable. Therefore, processing trade is an organic whole consisting of three links: import, processing and export. Without any of these links, it can not be regarded as processing trade. This paper will analyze the relevant policies according to this framework. Inevitably, the policy division of these three parts cannot be very accurate, and one policy will affect three links. But as far as the purpose of our policy research is concerned, this inaccuracy is not very important, so this paper does not strictly adhere to this division. The advantage of discussing in three links is that it helps us to discuss relevant policies based on the internal operation mechanism of processing trade and the outstanding problems in each link, so that policy analysis and suggestions are more targeted.

Two, China's processing trade development and policy adjustment objectives and principles

We believe that the development of China's processing trade and the establishment of policy adjustment objectives and principles in the coming period should be carried out closely around the overall strategic objectives formulated in the Tenth Five-Year Plan. According to the characteristics and functions of processing trade itself, when considering the processing trade policy, the employment, industrial structure adjustment and export expansion involved in the Tenth Five-Year Plan deserve our attention:

1. About employment. It is still of great strategic significance in China to vigorously develop and encourage processing trade with labor-intensive products as the mainstay. At present, most of China's processing trade is still engaged in the processing of labor-intensive products. It should be said that this is in line with the comparative advantage determined by China's abundant labor resources and plays a great role in alleviating employment pressure and creating employment opportunities. Therefore, in order to achieve the employment goal proposed in the Tenth Five-Year Plan, we must vigorously develop processing trade. Because, first of all, the solution to the employment problem cannot be separated from the expansion of export trade; Secondly, at the current level of industrial development in China, we do not have comparative advantages in capital, technology and management. In other words, to expand exports, we can rely on labor-intensive industries that give full play to the comparative advantages of labor or processing trade in production links with high labor intensity.

Of course, this does not mean that we will always stay in the stage of making processing and assembly workshops for multinational companies. On the contrary, in the process of developing processing trade, we should pay attention to learning advanced technology, management experience, establishing marketing channels, accumulating capital, and strive to raise the export industry to a higher technical level. However, before the completion of this process, as a transition, it is absolutely necessary and necessary to adopt the way of processing trade to alleviate the employment pressure and accumulate funds, technology and experience.

2. About structural adjustment. At present, the role of China's processing trade in upgrading the industrial structure is not obvious enough, mainly in the aspects of low processing degree, short processing chain, low localization rate of raw materials and weak ripple effect. Does this mean that the development of processing trade is incompatible with our goal of optimizing industrial structure and improving international competitiveness? We think the answer to this question should be no, on the one hand, it is necessary for us to vigorously develop processing trade to solve the employment problem; On the other hand, processing trade itself has two internal aspects.