Abstract: Since the Party Center Committee put forward the strategic task of“promoting the transition and upgrading of the processing trade,” the relevant departments have issued a series of related supporting policies. Then, what is the effect of these policies? What are the remaining problems? And how to make improvements? To answer these questions has important practical significance. From five perspectives, this paper selects 7 variables and applies the factor analysis method to evaluate the industrial policy performance of China’s processing trade. The results show that in view of the combined effects of the policy, the effect of the processing trade is good in general, however, the policy effect latterly present a decline trend. In view of the policy structural effect, the processing trade policy has a significant effect on the transformation and upgrading of the products, but effect on the upgrading of the value chain is not good. The later policies have even hindered the upgrading of the value chain, promoting the processing trade towards the low end.

Key words: global value chain division; processing trade; factor analysis; transition and upgrading