Properly play the processing trade card

Amidst the clarion call for marching toward revitalizing the northeast old industrial bases, processing trade has gradually become a bright gold-digging point: Through developing processing trade, the Harbin Flax Textile Mill has given jobs to more than 6,000 people and helped over 3,000 retired workers dispel worries behind; the Changchun Lamp Bulb Electric Wire Co. Ltd., having lifted itself out of predicament, has become a big local foreign trade business; the Shenyang Le Jin Electronics Company has kept enhancing its competitiveness and squeezed itself into the front ranks of the nation's export of color TV sets.

According to statistics from the Electromechanical Products Department of the Ministry of Commerce, in the first half of this year the total volume of import and export processing trade of the three northeastern provinces was near US$7.2 billion, a 12.4 percent increase year on year, accounting for 3 percent of the nation's total volume of processing trade, of which the export of processing trade came to US$4.1 billion, 10.1 percent growth year on year, electromechanical products have become the first category of export commodities, the composition of exports has been further optimized, the export of processing trade in electromechanical products in Liaoning Province, for example, has assumed a fairly big share in the nation's total, while software export by Dalian City in Liaoning and other places has risen like a new force at the moment. It goes without saying that an important content in revitalizing the old industrial bases in northeast China is to revive huge amounts of State assets, create new employment opportunities and promote the upgrading of the industrial structure, processing trade is the very effective short cut to achieve this goal.

Compared with other regions, the three northeastern provinces have their unique advantages in developing processing trade: First, policy advantage, there is no need to dwell on this point; second, regional advantage, connecting to the sea and border, the northeast has smooth and unimpeded passages and has broad space for cooperation with neighboring countries, that is very favorable to developing processing trade; third, labor and cost advantage. The amount and potential of exploitable labor force of Heilongjiang, Jilin and Liaoning provinces are relatively big, high-competence specialized technical personnel and the contingent of industrial workers, as well as workers and staff members laid off from State-owned enterprises are the main force for developing processing trade, this makes it unnecessary to recruit large batches of non-local workers, meanwhile, labor cost is low compared to coastal provinces; fourth, industrial advantage, The old industrial bases of the northeast gather together China's equipment industry, national defense industry, basic industry and high-tech industry, they posses key, leading enterprises in various trades and processions, their scientific research force and technical development level are all first-rate at home., such kind of industrial advantage is conducive to attracting foreign capital, particularly transnational corporations to participate in technical renovation and to opening up marketing channels, thereby developing processing trade at a deeper level. Therefore, we should grasp the good opportunities provided by the State's rejuvenation of the northeast and by the shift of international industries, make full use of the many advantages of the three provinces, push forward the transformation and upgrading of the northeast processing trade, and finally give a big impetus to the structural adjustment of the entire industry.

The old industrial bases in northeast China are playing the card of processing trade, but there are also some practical problems. Statistics show that 95 percent of processing trade in the northeast come from Liaoning Province, while Heilongjiang and Jilin provinces, constrained by some unfavorable factors such as geographical location, the degree of economic development and the level of utilization of foreign capital, their processing trade is still at a rather low level, which is manifested mainly in the slow progress in the system reform of State-owned enterprises and the lack of strength for the growth of foreign investment, furthermore, some domestic manufacturing industries are in the period of vigorous development, the production tasks of many large and medium-sized enterprises have been saturated, so their enthusiasm for accepting orders of processing trade is not high; the export products of processing trade are of low grade, mostly of labor- and resources-intensive type; compared to the general situation in the nation's foreign-invested enterprises which play the main role in processing trade, foreign enterprises in Heilongjiang and Jilin provinces are small in scale and generally weak in strength, lacking a strong impetus for developing processing trade. In addition, because of the unitary system of ownership in the northeast region, the proportion of processing trade handled by privately run enterprises is relatively low. All these call for quickening innovation of systems and mechanisms and giving encouragement, support and guidance to the adoption of a variety of patterns. Processing trade management is a systemic project which involves a wide area and strong policies, commerce, development, reform, finance, customs, taxation, industry, quality test, foreign exchange and banking departments are required to form a working mechanism featuring division of labor and cooperation, joint management and flexible and easy operation, and create an excellent environment for development, so that processing trade can better add luster to the rejuvenation of the northeast region.

By People's Daily Online