FDI,Quality Of Institution And GVC’s Rising Of Manufacturing Industry

In the face of New Normal of the economy and the rise of economic external risks,China strategically proposes to implement a new round of high-level opening up and actively seek opening up based on institutions,promoting “Bring In” strategy to further improve quality and efficiency.The traditional attractiveness of China’s manufacturing industry to FDI mainly comes from the cost depression formed by local advantages and preferential policies,but this model obviously can not better adapt to the actual needs of the high-quality development of China’s economy in the future.China’s manufacturing industry development has entered the “deep-water zone” and “tough period”,we must beware of falling into the “low-end locked”.The significant increase in the proportion of innovative factors in the transnational flow of production factors has made multinational companies’ sensitivity to institutional costs gradually exceed productive costs,and the quality of institution has become an important comparative advantage for a country to attract high-quality FDI and achieve the GVC’s rising of manufacturing industry.Based on the above background,the thesis focuses on the specific impact of FDI and the quality of institution on the GVC’s rising of China’s manufacturing industry,and discusses the practical effect of institutional optimization on improving the quality of foreign investment and promoting the upgradation of manufacturing industry from a medium-and long-term perspective,to provide some useful enlightenment for the GVC’s rising of China’s manufacturing industry.The thesis specifically defines and explains the connotation of institutional quality from the dual dimensions of “efficient market” and “promising government”.On the basis of reviewing important basic theories,through theoretical analysis and empirical analysis based on the panel data of 17 manufacturing subdivisions in China,the core issues of this thesis are demonstrated in detail.The whole text contains six parts in terms of logical structure: Introduction;Theoretical Basis;Description of the Current Situation of China’s FDI,Quality of Institution and Participation in Global Value Chain of Manufacturing Industry;Theoretical Mechanism of Impact of FDI and Quality of Institution on the GVC’s Rising of China’s Manufacturing Industry;Empirical Analysis of Impact of FDI,Quality of Institution on The GVC’s Rising of China’s Manufacturing Industry;Research Conclusions,Policy Recommendations and Prospects.The main research conclusions of this thesis are: Firstly,China’s dominant manufacturing industry is still mainly concentrated in low-and medium-tech industries,and the participation of high-tech industries in the global value chain is high,but the status is low.Secondly,the “quality” and “quantity” of FDI used by manufacturing industry do not match,and the number and structural problems are becoming more and more prominent.Thirdly,FDI has not shown obvious promotion effect on the GVC’s rising of China’s manufacturing industry in the past,which shows that the traditional model of attracting and utilizing FDI mainly plays a “quantitative” effect on the development of China’s manufacturing industry,while the “quality” effect is relatively lacking.Fourthly,the improvement of quality of institution has a significant role in promoting the GVC’s overall rising of China’s manufacturing industry,and the GVC’s rising of technologyintensive industries has higher requirements for the quality of the institution than that of labor-and capital-intensive industries.Fifthly,the improvement of quality of institution can alleviate the adverse impact of FDI on the GVC’s rising of China’s manufacturing industry.However,this positive adjustment has a “threshold effect”.Based on the theoretical and empirical analysis results,this thesis finally puts forward relevant rationalization policy suggestions from the aspects of market,government,FDI and enterprises around the optimization and improvement of institution from the perspectives of “efficient market” and “promising government”.Institutional reforms such as market improvement and government governance transformation should be carried out simultaneously,and continuously optimize the environment of investment and business,improve the quality of FDI,stimulate the innovation motivation and vitality of enterprises,and enhance the independent innovation level and core competency of enterprises,so as to fundamentally provide “source living water” and a solid foundation for China’s manufacturing industry to achieve the GVC’s rising.