Dissertation > Economic > The world economic profiles,economic history,economic geography > China's economy > Socio-economic structure and institutional > Industrial structure

Global Production Networks and Industrial Structure Upgrading: An Empirical Analysis from China

Author YaoZhiYi
Tutor ZhangYaBin
School Hunan University
Course International Trade
Keywords Global production network Industrial structure upgrading Value chain
CLC F121.3
Type PhD thesis
Year 2011
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In the theory frame of global production network, we ponder how will development of the China’s industrial structure be? and how use both the domestic and overseas markets, and how China absord overseas technology to promote own industrial structure. In the theorety,a countries’ industrial structure upgrading is the close correlation of the global economy development. The way of the new world production organization that used various countries’ comparison superiority and optimized reasonably the resources disposition bring the opportunity and create the condition for the various countries industrial structure promotion.Taking these into consideration, on the base of taking the global production network as the background, taking the promotion of the value chain link as the breakthrough point, and annotating the model of comparative advantage by embedding heterogeneous firms and new Product Cycle theory,we found basic way which the industrial structure promotes in the global production network.China participate the global production network by three way of FDI, international outsouring and foreign trade,we try to analyze how China would participate the global production network? and what factor affect the industrial structure promotes under the global production network?and How construct the index of our country industrial structure promotion? Then we proposed the basic way of the China industrial structure promotion in the global production network.On the base of annotating the world production network and connotation of industrial structure promotion under the global production network,we elaborate the variance factor that effect the China industrial structure promotion by improving“the diamond system”the model.we think that the factor are : the global production investment essential factor,the international market demand, the enterprise globalization competition strategy, the global value chain government. the opportunity that the global production network provide and the opening policy system are also playing the important role.In order to find a Theory pivot about how do the global production network the China industrial structure upgrading,at first we explained the traditional industrial structure upgrading theory,they are: comparative advantage and Product Cycle theory.next, one hand,we embed heterogeneous firms in a model of comparative advantage and analysing how firm, country,and industry characteristics interact as trade costs fall,and the reallocation of resources across industries and countries. on the other hand, But works as when existence not incomplete contract, the product shift is by no means which the Neoclassical product life cycle theory understood, goods are initially manufactured in the same country where product development takes place. Only when the good becomes sufficiently standardized is the manufacturing stage of production shifted to a low-wage foreign location.we think that The high-tech product manufacture was firstly shifted to multinational corporation’s overseas subsidiary company in technological innovation of the production time,and In the technology transfer time, the standardized product manufacturing industry was shifted to the independent foreign corporation which is precisely the foreign investment result. These independent foreign corporation place both developed country and developing country. therefore we study the industrial structure promotion under the global production network in order to know how we holds the turning point of the global production network,to hold product value chain high end level, and achieve the industrial structure upgrading.Enhancement of the technology advancement and the technical efficiency is an important factor of the industrial structure upgrading.We select the pool data of Chinese 24 manufacturing industries about output,input of the capital and the labor force in the time of 2001~2007 year to obtaint the index of chinese technique efficiency and technique progress by Stochastic front analysis method which take as dependent variable.Way of China participating the international division of labor is: FDI, foreign trade, international outsouring which take as independent variable. Then we comparate FDI, Domestic investment and International outsouring to contribute of Chinese technique efficiency and technique progress by panel data method. The result: The foreign investment and the domestic investment promoted the China technology advancement and enhance enterprise’s technical efficiency. Furnished raw material processing had presented the negative influence to the technical efficiency. The feeding processing assumes the negative influence to the technology advancement and the technical efficiency in the international outsouring.In view of the Chinese region industry development difference, we estimated the development condition of the industrial structure from the erall and interprovincial through the principal components and the cluster a method. Draws the conclusion: The Chinese industrial structure is placing the stage of productivity enhance in the global production network ,and the east coastal area of china has the relative strong strength to carry on the independent innovation to integrate the global production network value chain high end level. The industry had demonstrated characteristic of the region resources advantage in the middle area,which their main industry product is majority of raw material primary processing product,and the intensive processing product development is insufficiency. At the same time,the high-tech industry development is lag and the industrial scale is small, they are insufficient of embeding the global production network. The western area has superiority and the potential to develop characteristic agriculture, but their industry is not developed, the industrial structure is low.Based on above analysis, we thought that way of the China industrial structure upgrading may carry on from three aspects under the global production network: First, we have to improve essential factor structure, consolidate labor force superiority and enhancement the human capital. Moreover,we construct the open industry technological innovation system to enhance the technology advancement. Second, our country need to enhance the product scale and improve product quality according to the global supply and demand product structure change in order to promote product structure.Third, in view of the Chinese region industrial structure difference, we implement“the circle level”the industrial structure promotion way.

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