Research On Manufacturing Industrial Upgrading In China

From1970s,the deepening of the division of labor and specialization is animportant feature of modern economic development, with the comparative advantagesand economies of scale embodied in different production processes and links of thesame product, the benefits of specialization promotes to different productionprocesses and links of the same product, the division of labor began to enter intointra-product division stage. Correspondingly, International industrial transfer changesfrom industry space to product space, and then to the space of different processes ofthe same product. The developed countries repositioned their core competitiveness byvertically separating its multinational production systems, which focused on the highvalue-added aspects of product R&D, designing and marketing, as well as transferredproduction and manufacturing and such low value-added aspects to developingcountries, to form the spatial pattern of a product of different processes or aspectsspotted in different countries. Global value chains became the main force of divisionof labor and industry transfer. In global value chains as the core of the benefitsdistribution, the developed countries and their multinational corporations use theirmarket power to vertically squeeze developing countries, gaining most of the divisionof labor and trade.From1990s, by its manufacturing size and cost advantages, and undertakinglabor-intensive part of the global value chain as well as deepening participation inglobal division of labor continues to deepen, China has become a globalmanufacturing power. All along, the common view is that China can learn from thesuccessful experience of South Korea, Singapore to enter into the lower end of theglobal value chain by comparative advantage, following the path of the “processupgrade–product upgrade-feature upgrades-chain upgrade "to achieve industrialupgrading. However, it cannot help China to get rid of falling into the trouble of thelower end of value chain relying solely on the export-oriented thinking, including the comparative advantages or GVC upgrading. One of the reasons of why the existingindustrial upgrading lacks of explanatory power and guidance is not fully consider theinfluence of the size of the state to industrial upgrading. Comparative advantage doesnot automatically translate into competitive advantage; developing countries such asChina participated in international division of labor in accordance with the principleof comparative advantage, will always be an exporter of primary products andlabor-intensive products. In rapid technological innovation, technological innovationcapacity has been far beyond the resources, labor and other traditional areas ofstrength, competitive advantage through independent innovation will become thecompany’s core competitiveness with sustainability, which can form industrialcompetitive advantage and achieve industrial upgrading. Therefore, China needs tore-examine and adjust the corporate strategy and industrial development ideas, topromote industrial upgrading and enhance the position in the global value chainsystem to gain more benefit. It is a feasible approach to achieve manufacturingindustrial upgrading and narrow the gap between developed countries by fully playingthe advantages of developing great country, learning and absorbing foreign advancedtechnology, relying on the domestic market for the powerful effect of the introductionof technology and innovation, as well as implementing technology localizationstrategy.According to the background mentioned above and research thinking, this paperdiscusses the upgrading of China’s manufacturing industry with seven parts:The first part is introduction which identifies the practical and theoreticalsignificance of this article, gives some literature review and comments on theindustrial upgrading, and then put forward the ideas of this study, the logicalframework and research methods, summarizes the innovation of this paper andinadequacies, which constructs the full text of the research framework.The second part is about the relevant concepts and theories. It defines the basicconcept: manufacturing, industrial upgrade and developing great country and,summarizes the economy development theory of developing great and the relevanttheory of comparative advantages, late-development advantages, productivity and comprehensive advantage of great country, providing theoretic foundation for wholestudy.The third part is the international experience and inspiration of manufacturingdevelopment. In this section, it summarizes the manufacturing developmentexperience of developed countries (the United Kingdom, the United States, Germany,Japan), developing great counties (Russia, Brazil, India), four Asian Tigers (Korea,Singapore, Taiwan, China and Hong Kong, China),which indicates technologicalprogress is the most important factors for manufacturing development upgrading withthe success of fully and moderate playing the role of both government and market.The experience of developed countries shows that, with the development of scienceand technology, the advantages of natural resources is not the decisive factor in thedevelopment of the manufacturing industry. These experiences from history andreality of China’s manufacturing industry provide help to upgrade the models andoptions.The fourth part is to build the manufacturing industry upgrading framework ofdeveloping great country. The problem of one country’s manufacturing industryupgrading needs to consider the principle, methods, mechanisms and paths of industryupgrading. There are two successful modes of manufacturing industry development: agreat country mode of the traditional developed countries, a small country mode ofemerging developed countries. However, due to their environment, differences innational circumstances, the above models are not suit for developing countries thatshould choose the open independent mode which needs starting from their ownnational interests, fostering and promoting the development of their manufacturing togrow into the goal based on keeping open. The essence of industrial upgrading is thatindustrial enterprises could dynamically adapt themselves based on the domestic andinternational market opportunities and their own resources and capacity. It isadvisable for developing country’s industrial upgrading to promote diversifiedtechnological capabilities based on domestic market. In the above premise, theindustrial upgrade path of great country is as follows: the introduction of foreigntechnology (OEM)â†'growing and developing relying on the local market, building domestic value chainâ†'technical innovation for domestic marketsâ†'technologyinnovation for home and abroad market.The fifth part discusses the necessity and obstacle of China’s manufacturingindustry upgrading. Through the analysis of relevant data, China has become theworld’s manufacturing great country; however, China’s manufacturing products arestill at the low end of the value chain with low added value, compared with developedcountries. From international and domestic perspective, the existing internationaldivision of labor and trade system, re-understanding to manufacturing of developedcountries, national policy deficiencies, defects of the domestic market and domestictechnological innovation capability are lagging behind China’s manufacturingindustry.The sixth part is about China’s manufacturing industry upgrading suggestions. Itputs forward three corresponding countermeasures and suggestions in national policy,building domestic market, domestic technological innovation to the existing obstaclesfor the Chinese manufacturing industry,.The last part gives a summary of the full text of the study, as well as further studyof the industrial upgrading of the relevant recommendations.