The Upgrading Of China's Equipment Manufacturing Industry In The Product Space Perspective

In recent years,China has relied on cheap natural resources and labor to actively join the global value chain production.However,the lack of design research,marketing management and other core aspect make China long-term locked in the low-end position and difficultly climb to the high-end chain of value chain.The manufacturing is big but not strong.Traditional comparative advantage theory from the view of factor thinks the economic growth is a sustainable development process,and as long as there are differences in factor costs,the phenomenon of industrial transfer will occur.However,the underdeveloped areas of the economy are mostly in the long-term stagnation.In this paper,the product space proposed by Hausmann is used to overcome the problem that the traditional comparative advantage theory is not consistent with the economic reality,and solve the problem of the more influential factors of industrial transfer.The combination of theory and practice can solve the global value chain or the national value chain of different chain selection problem,the industry upgrade priority or inter-industry upgrade priority of different upgrade mode selection problem,the progressive upgrade path or mutation upgrade path of different strategy selection problem and so on.Around the above research objectives,this paper first combs the relevant literature to build the theoretical framework of China's equipment manufacturing industry to upgrade.Secondly,this paper constructs the game model which is integrated into the homogeneous enterprise and the leading enterprise to study the choice of the value chain under the profit maximization,and analyze the influence of the market size,the fixed cost,the marginal cost and the enterprise quantity on the chain selection.Thirdly,this paper measures the development status of RCA,product density and product complexity to analyze the current situation of equipment manufacturing industry in China from 2003 to 2014,and test the relationship between product space and industrial upgrading.The empirical results show that:(1)The eastern region has the problem of hollow industry and the Midwest region has the problem of Low-end industrial structure.Breaking the fragmented way can make the eastern region to avoid isolation and the Midwest region to build a new production value chain and re-integration of localized.(2)The theory of product space is suitable for the upgrading of China's equipment manufacturing industry,but the cumulative production capacity of innovation caused by the promotion of industrial upgrading is limited.The existing industry occupies more production resources.Through the government can adjust the limited resources to re-integration and achieve high value-added areas of innovation.(3)The non-collaborative development of scientific research and production can't improve China's equipment manufacturing industry product complexity.China's innovation not strong.Finally,based on the theoretical analysis and empirical research,this paper puts forward policy suggestions to promote the upgrading of China's equipment manufacturing industry.