Purpose - This dissertation is based on previous research, and analyzes processing trade, which constitutes a major section of foreign trade in Shandong Province. Research design, data, and methodology - The study uses the survey data on polarization, which is a vital index reflecting the unbalanced growth of regional economic development. The article introduces the processing trade polarization index, and the processing trade polarization fluctuation rate, to predict the geographical polarization posture and development trends in Shandong Province. Results -The development of processing trade in Shandong Province shows the level of gradient from east to west. The first-line growth pole has been formed and developed, and the initial formation of the diffusion mechanism has taken place. However, coordination problems in accompanying regional development have become increasingly prominent. Conclusions - This study focuses on the development of processing trade strategy and suggests overall coordination of development objectives, using non-balanced development goals. According to regional characteristics and development objectives of the processing trade in Shandong Province, the region around the city is divided into innovation diffusion region, enhanced growth areas, areas expected to undertake development, and areas to upgrade in four levels, given the different policy proposals.

• Dan Dan Xiao(Professor, Business School, Shandong University of Political Science and Law)