| Industrial agglomeration becomes a hot topic in economic theoretical study and social practices, owing to its important impacts on developing regional economy and promoting industries’competitiveness in a country. Since the Reform and Opening-up, China’s manufacturing industries’participating in international specialization has also been connected with industrial agglomeration. Many manufacturing industries have been attracted agglomerating in China’s eastern coastal areas, which having advantages of superior geographical location, certain historical industries’basis and preferential opening polices. Meanwhile, MNCs’investing in and processing trade of China’s manufacturing industries under economic globalization also have taking on characteristics of concentrating in China’s eastern areas. Then, what are influences of industrial agglomeration on the role of China’s manufacturing industries in international specialization? How to take advantage of industrial agglomeration to promote the position of International Specialization which China’s manufacturing industries’are approaching toward? Problems above are the researching focus of this paper.From two viewpoints, the above-mentioned problems are explored and researched in details. Utilizing New Economic Geography framework, the paper explains the theoretical mechanisms that industrial agglomeration affects location choice of transnational production from viewpoint of regional influences. Industrial agglomeration decides the location choice of transnational production as trade cost declining in a certain rage. Transnational production blocks with vertical linkages characteristics are attracted and concertrated in regions having larger markets by industrial agglomeration through scale effects. At this time, the location choice of transnational production has been affected more by industrial agglomeration through scale economy effects and vertical linkage effects than by comparative advantage from demand of final products and factors. Based on these, regional characteristics of agglomeration, international specialization and influences are described. Then, influence of industrial agglomeration on location choice of FDI is empirically studied with regional data of China’s manufacturing industries during 2002 to 2011 and panel regression method. The results indicate industrial agglomeration enhances location choice of FDI in China’manufacturing industries. Industrial agglomeration in eastern regions attracts more FDI in the regions through higher market potential, vertical linkages, technology spillovers and advancing regional openness. But infrastructure’s promotion is weakening. Researching on industry influence has two directions. The first is that industrial agglomeration’s effects on FDI technology spillovers have been made endogenously in dynamic economy growth model, which is based on endogenous economy growth theory. The paper concludes relations between agglomeration which decide FDI technology spillovers and technology progress in host country presents the inverted U-shape relationships.The industrial characteristics of agglomeration, FDI and influences about China’s manufacturing industries are described through related index. Then, the author texts the inverted U-shape relationships’ conclusion through systematic GMM method using China’s manufacturing industry data during 2002 to 2011 and further empirically analyzes the reason resulting in the inverted U-shape. High-agglomeration industries haven’t promoted technology progress through FDI technology spillovers, because of failure to playing backward linkage effects. Moderate-agglomeration ones have no clear effects of FDI technology spillovers on technology progress, but using better self-capability in technological innovation and vertical linkages to promote technology progress. Low-agglomeration ones can obtain technology progress by FDI technology spillovers using inter-industry scale effects and vertical linkage effects. The second is that theoretical model deciding exporting enterprises’productivity are integrated with influence of industrial agglomeration on fixed cost of exporting enterprises based on opinions about exporting productivity in new-new trade theory. It is concluded with general equilibrium method that industrial agglomeration enhances the productivity of exporting enterprises in opening conditions. The paper describes the industrial characteristics of foreign trade (including processing trade and general trade). Researching have been made with systematic GMM method and by creatively using factor terms of trade (FTT) index relating to productivity, which contrast the industrial agglomeration’s (TFP) effects of total factor productivity to the ones of labor productivity on manufacturing industry exporting competitiveness. The comparison indicates that industrial agglomeration’s TFP effects promote FTT and exporting competitiveness more than that of labor productivity. Exporting competitiveness are promoted by TFP effects through operating inter-industry scale effects and forward linkage effects, utilizing international market competition, raising R&D inputs, lowering transporting cost.At last, policies are suggested promoting the position in International Specialization China’s manufacturing industries’are approaching toward, which are based on the above research on regional influences and industrial influences. Regions development policies include enlarging market scale and decreasing trade cost to promote market potential growth, enhancing industries’ linkages in region to coordinate and cooperate production chains, increasing human capital and R&D inputs to erect innovation cluster and attract more R&D-FDI, moderately developing infrastructure construction and improving soft enviroment, advancing the openness and reasonably dispersing FDI in different regions. Industrial development policies have been proposed. Firstly, industries in different agglomeration degrees should adopt different policies to realize technology progress reasonabley by FDI technology spillovers. High-agglomeration industries should actively play the backward linkage effects with FDI enterprises. Moderate-agglomeration ones should enhance self-capability in technological innovation and avoid or reduce FDI reverse technology spillovers. Low-agglomeration ones should advancing FDI agglomeration and raising quality of FDI to optimize industry structure. Secondly, the policies promoting exporting competitiveness through industrial agglomeration include operating inter-industry and intra-industry scale effects together, stimulating interaction between industrial agglomeration and international competition, continuously raising labor’s skill and R&D inputs, reinforcing industries’backward linkage effects, and improving logistics technology to reduce transportation cost.
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