Effect Analysis Of FDI On The Upgrade Of China’s Manufacturing Industry’s Global Value Chain Position

With the acceleration of the industrialization process and the global manufacturing industry transfer,China’s manufacturing industry has developed vigorously and the scale of production has expanded.However,there are many problems:mainly labor-intensive industries,low independent innovation capability,in the middle and low level of the global value chain,making China actually assume the role of "international foundry",which has severely restricted China’s transition from a large country to powerful country.Therefore,It becomes an inevitable choice for China to explore how to climb to the higher GVC and break through the low-end locking dilemma of manufacturing.Since the Reform and Opening up,China has more deeply participated in the international division of labor.We adhered to the concept of "market for technology",considering attracting FDI as a crucial method to climb to a higher global value chain.One of the important reasons why China has become one of the major countries of introducing the FDI nowadays is that we hope to take advantage of the spillover effect of FDI to drive China’s technological innovation and economic growth.The FDI will flows to all walks of life in China that regards the manufacturing industry as its pillar industry.We attaches great importance to the global value chain position climbing process of the manufacturing.The introduction of foreign capital facilitates technological upgrading to achieve long-term development of the industry and improve its position in the global division of labor.This paper adapts the combination of theoretical and empirical test to analyze and solve problems.First of all,it gives an introduction of research background and topic significance,illuminating the literature review from three aspects,and describing the research methods,content framework,innovation points and deficiencies.Then,this thesis discusses the basic conception and theoretical basis,covering the theory of technology spillovers,FDI technology spillovers and economic growth,and the theoretical basis of global value chain.Chapter 3 describes the development of China’s manufacturing industry and FDI.,introducing the development of China’s manufacturing industry from overall manufacturing development and industrial comparison,and illuminating FDI from three aspects:investment mode,country distribution and industry distribution.The next part examines the mechanism of FDI technology spillovers to promote the global value chain upgrade of manufacturing industry,which is analyzed from three aspects:FDI horizontal,forward and backward technology spillover.The fifth chapter is empirical analysis.Based on China’s manufacturing industry segment data from 2000 to 2014,the mediation effect model is constructed to explore the process and mechanism of FDI’s impact on the global value chain upgrade of China’s manufacturing industry through technology spillover channels.In the sixth chapter,the research conclusions and related policy recommendations are put forward based on the theoretical basis and empirical test.The innovations of this paper:First,on the object of study,combined with the latest GVC upgrading problem,the research explores the impact of FDI on China’s manufacturing upgrading by connecting theory with evidence;Second,from the research point of view,taking technology spillover as a breakthrough,this paper emphasizes the channels FDI plays a role;Third,in the research method,studying the indirect effect of FDI through technology spillover is an innovative attempt by means of constructing the mediation effect model.However,there are two shortcomings:first,the data selection has limitation;second,there is no classification research on the manufacturing industry.Through theoretical analysis and empirical test,this paper draws the following main conclusions:First,the introduction of FDI can promote the higher position of GVC in China’s manufacturing industry.Second,there are horizontal,forward and backward spillovers of FDI Effect,whose extent of the effects is different.The FDI backward technology spillover effect is the strongest.The horizontal is second,and finally the forward spillover.The forward and backward spillovers play a positive role in promoting the GVC of the manufacturing,while the horizontal technology spillovers effect is negative.According to the conclusion of the research,in order to improve the status quo of China’s manufacturing industry,this paper puts forward four suggestions:first,independent innovation drives technological progress;second,focusing on improving the quality of FDI;third,constructing the domestic value chain of China’s manufacturing industry;Fourth,optimize China’s market system and environment.