The processing trade of "two ends outside" and "borrowing chicken to lay eggs" once occupied half of China's foreign trade, but now it is still an important trade mode that connects domestic and international dual circulation. Recently, the Ministry of Commerce and 10 other departments issued the "Opinions on Improving the Development Level of Processing Trade" (hereinafter referred to as the "Opinions"), proposing 12 policy measures from six aspects, and drawing a blueprint for creating the "2.0" version of China's processing trade. What role has processing trade played in China's open economic landscape over the past 40 years of reform and opening up? Against the backdrop of a simultaneous decrease in scale and proportion, how can processing trade innovate and break through to gain new advantages? The reporter conducted an interview. Processing trade has evolved into various forms. What is processing trade? Compared with general trade, "two ends outside" is the most prominent feature of processing trade, that is, "raw materials are imported from outside, and products are sold abroad", including forms such as incoming processing and incoming processing. Industry insiders point out that traditional processing trade usually occupies the bottom position of the "smile curve" of the international value chain, with labor-intensive, low added value, and strong substitutability as its main characteristics. As an important component of China's open economy and foreign trade, since the reform and opening up, processing trade has played an important role in promoting opening up to the outside world, promoting industrial upgrading, and ensuring employment. According to data from the General Administration of Customs, from 1981 to 2023, the average annual growth rate of China's processing trade imports and exports was nearly 20%, with a cumulative increase of nearly 500 times. Over the past 40 years, China's processing trade has achieved leapfrog development. Enterprises have participated in global division of labor through processing trade, gradually transitioning from "borrowing chicken eggs" to "independent incubation", and their business models have gradually shifted from OEM (OEM) to ODM (OEM design) and OBM (brand marketing). Taking Guangdong Province, which has developed processing trade, as an example. Nowadays, the proportion of ODM and OBM in processing and trade enterprises in Guangdong Province has increased to about 2/3. Among them, in Dongguan, an important base for processing and trade, about 30% of processing and trade enterprises have established research and development institutions, more than 500 have applied to become high-tech enterprises, and over 2000 processing and trade enterprises have established independent brands, with a cumulative number of brands exceeding 13000. The proportion of ODM and OBM product exports has increased from 40.8% in 2009 to 75.3%. "Processing trade has driven the overall improvement of China's processing and manufacturing industry, enhanced innovation capabilities, and promoted industrial transformation and upgrading," said the relevant person in charge of the General Administration of Customs. At the same time, with profound changes in the domestic and international environment, the scale and proportion of traditional processing trade in China's foreign trade pattern are also declining. The relevant person in charge of the General Administration of Customs introduced that the development model of "two ends outside" in processing trade is no longer compatible with the construction of a new development pattern with domestic circulation as the main body and domestic and international dual circulation promoting each other. The proportion of foreign trade has also decreased from its peak of over half of the country to about one-fifth. In the first three quarters of 2023, the total import and export value of China's processing trade was 5.57 trillion yuan, accounting for 18.1% of the total import and export value of China's foreign trade. Nevertheless, improving the development level of processing trade still has practical significance. The relevant person in charge of the Ministry of Commerce stated that the decrease in scale and proportion, and