The Effect Of Vertical Spcialization On The Competitiveness Of China's Manufacturing Industries

Vertical Specialization is one of the main ways in which China take part in the international specialization, it is of significant meanings to the development of China's economy. This paper is mainly about the vertical specialization's effect on international competitiveness of china's manufacturing industries.This paper firstly used Hummels's method to calculate VSS (vertical specialization share of export) of China and some other developing and developed countries, then analyzed the data. Then we calculated the VSS of manufacturing industries, data reveals that there are higher VSS in capital (technology)-intensive industries than labor (resource)-intensive industries. The following researches proved that there were positive effects on the industries upgrade of China's manufacturing industries from taking part in the vertical specialization: vertical specialization not only plays a positive impact on upgrading in manufacturing industries but also on upgrading between China's manufacturing industries. Our empirical researches reveal that vertical specialization plays a different positive impact on different kinds of industries. We also analyzed the other factors which affected the competitiveness of China's manufacturing industries which will be helpful for both enterprises and government to take proper measures to improve the competitiveness of manufacturing industries and the well development of China's economy. Finally, we gave some suggestions from micro-level and macro-level based on the analyses above.