Manufacturing Industrial Upgrading In Northeast China

After the reform and opening up, China's southeastern coastal areas took the lead in the process of globalization and obtained rapid development with its manufacturing industry pitching in the global value chain. In stark contrast, the manufacturing development of northeast old industrial base has stagnated for a long time. There is still no improvement even after the implementation of the national policy of revitalization of the northeast under the support of the central government. The issue of transforming and upgrading northeast manufacturing industry is indeed of highly realistic significance and theoretical value.Industrial upgrading is not only a technical and economic phenomenon, but also a social and historical process. It is a cultivation, accumulation and exertion process of self-development capability where an industry keeps constantly adapting to the environmental changes based on its own comparative advantages of factor endowment on the basis of sharing technology achievement. It is also a dynamic process of factor endowments transformation, competitive force reinforcement, and industrial structure optimization. The substance of industrial upgrading depends on the improvement of industry productivity and competitiveness, aiming at obtaining and maintaining competitive advantage. Various technical and institutional factors restrain industrial upgrading, and innovation is the way out.There is a brilliant history of northeast manufacturing industry; however it obviously stuck in trouble after the reform and opening up. The productivity of manufacturing industry in northeast China is the key for the upgrading. In the short term, productivity can be showed as technical efficiency, therefore, this paper evaluated the productivity of the manufacturing industry in northeast China by using stochastic frontier analysis; as of the great importance of regional trade efficiency upon industrial technical efficiency, the paper also analyzed the transaction efficiency in northeast region of China using the theory of institutional economics.Under today's international and domestic background, it is very important to objectively evaluate the basic conditions and practical difficulties of northeast manufacturing industry to upgrade and develop, as well as to explore the particularity of the industry upgrade problems, so as to adopt effective tactics. The direction of the manufacturing industry upgrading is to develop traditional manufacturing industry into advanced manufacturing industry under the leading of new and high technology industries. This paper objectively evaluated the upgrading capability of northeast traditional manufacturing industry and high-tech industry using mutation progression method, and analyzed and compared eight major economic zones in the country.The high transaction cost in northeast not only hindered the manufacturing of new investment, but also lowered the technical efficiency of the original manufacturing industry severely. Low productivity means low upgrading ability. To improve the productivity of northeast manufacturing industry and boost its industrial upgrading ability, we can only rely on innovation -the system innovation of regional innovation system.