| Economic globalization is an irreversible trend in today's world. With the view of production system, the deepening of economic globalization means that the co-operation base on Global Value Chain (GVC) is evolveing into the mainstream of the world production system. The value-added of different segments of GVC are not the same. The regions and enterprises are defined as the Developed Regions and Global Enterprises, which have controled the leading power of GVC and occupy the segments of high value-added, whereas is known as the Developing Regions and Local Enterprises. For the Developing Regions and Local Enterprises, there are two main channels to embed GVC:the first is embedding by international trade, and the second is embedding by cross-border investment. For the aim of profit maximization, the Developing Regions and Local Enterprises are motivated to implementate industrial upgrading base on GVC, and thus get the greater right to speak, higher economic rent, and more value-added.In 1978, China launched reform and opening-up policy, begined the transition from a closed economy to open economy. China ties with the world economy more and more, and China is rapidly becoming a key node in global production networks. County is the most active unit of China's economy. Thus the countys of China --- particularly the county of Yangtze River Delta, Pearl River Delta, the Bohai Sea in eastern coastal areas --- won political protection and historic opportunity to emded in GVC. Parts of the countys have to be the important units of GVC through undertaking a large number of foreign investment or international trade. Overall, however, due to the short time of rapid development, technology gap still exists. The China's counties in eastern coastal are still vested in the Developing Regions of GVC, and most enterprises of these counties are the Local Enterprises.With more studing about economic conducts, it can be that:the co-operation base on GVC has the double-sided effects on the Developed Regions and Global Enterprises, economic growth effects and structural blockade effects. The former boosts economic growth, the latter hinders access to high value-added of GVC. A part of the counties of China's eastern coastal are the pioneers to embed in GVC, and have achieve rapid economies growth for benefiting from economic growth effects of GVC, and thus promote the eastern coastal regions --- such as Yangtze River Delta, Pearl River Delta, the Bohai Sea --- become the world's manufacturing base, and also play a important role for China to be "world factory". In this process, some strong economy counties have emergence, which are a relatively relatively large scale of the industry, relatively strong comprehensive competitiveness, named a typical representative of the "National Top100 Counties". When these economic counties trying to rise to change its low-end position in the GVC, then they may be subjected to blocked from developed countries (usually are the Developed Regions of GVC), which is the structural blockade effects of GVC.With the methoeds of micro theoretical models, macro econometrics, case analysis, this paper attempts to explore the industrial upgrading of China counties base on the double-sided effects of GVC. The main conclusions are:(1) The theory provement of the existence of double-sided effects of GVC:local enterprises can realize a rapid expansion of production and sales with the direct economic growth effects of GVC; and there are also the indirect economic growth effects of GVC, which can promote the development of circumjacent enterprise, increase of employment, growth of macro economic through the surrounding industry association. The economic growth effects of GVC are constituted the direct of economic growth effects and indirect economic growths of effects, which are very helpful for Local Enterprises to achieve denotative development. The analysis base on the general model and expand model also showed:when the growth of local enterprise technology at a certain critical value, the Global Enterprises will to block the development of Local Enterprises, and the strength of blocking will biger if the technology of local businesses to further growth. The ultimate goal of Global Enterprises is try to make Local Enterprises will continue to be locked in the low end of GVC, in order to ensure that their leading power in the co-operation of GVC, such as international trade, cross-borde investment, technology transfer, price negotiations and so on, to maintain occupying high-end segement of GVC in the long-term. This structure blocking effects are not conducive for Local Enterprises to enhance the status in the GVC, are also not conducive to the transformation of development type from extensive to intensive development.(2) The implications for industrial upgrading base on the model of double-effects of GVC:With the background of the economic globalization, Local Enterprises should try best of embed in GVC through international trade or corss-border investment, in order to boost the economic, upgrade technology. But when the industrial upgrading of local enterprises to enter a higher level, it is likely to suffer structure blockade from the Global Enterprises. Therefore, the capability of Local Enterprises to strike the structure blockade is the key for Local Enterprises to cut into the core part of GVC and even to become the Global Enterprises. Extended to the macro-regional level, there are some practical advices:when be a member of GVC, the Developing Regions should try best to use the economic growth effects well and break through the structure blockade effects. (3) The relationships between local industrial clusters and GVC:General model also showed that:local industry clusters is not contrary to the trend of globalization, but is conducive to indirect economic growth effects. Therefore, it is in favor of the Developing Regions to get the greater room for development by fostering more complete industry chain of local industrial clusters and more closely linked of enterprises.(4) Base on the Yangtze River County, an empirical test about the double-sided effect of GVC found that:In general, the economic of the counties in the Yangtze River Delta has grow rapidly, with the benefit from the co-operation base on GVC when the early time of embedding in GVC, regardless of their embedding is mainly through trade or invesrment. However, with the increases of embedded depth in GVC, economic growth effects will gradually diminish. The weakening is particularly prominent for nation top 100 counties. The rate of Industrial Value-added of the counties in Yangtze River Delta have reduced with the increases of the depth of embedding inGVC, revealing significant structure blockable effects; and it is more significant when mainly embedding by investment. It is can be found by comparing between national top 100 countiese and other countys in Yangtze River Delta region that:the counties being suffer the more significant structure blockable effects when their economy is better, so it can be said that structure blockable effects is triggered start of critical points.(5) The general direction and path of industrial upgrading for Chinese Counties based on GVC:Based on the GVC, The fundamental objective of industrial upgrading for Chinese Counties is to enhance status and value-added in GVC. With the view of double-sided effects of GVC, it is also means in order to achieve economies scale rapid expansion through the economic growth effects, and to seize the high-end of GVC through breaking the structure blockade effects. To achieve this goal, there are three main directions of industrial upgrading: first, adding value in node, that is doing fine and stronger which nodes (links), and increase the distribution of value-added in the GVC for this node; Second, rising between nodes, rose from low value-added nodes (links) to the high value-added node (link) in the same GVC; Third, transiting between value chains, transit from the GVC with low total value-added to the other GVC with high total value-added.(6) The direction and key points of industrial upgrading for China counties with of the four models of industrial development:there are four models of industrial development for counties in China by the way and depth of embedding in GVC:Exogenous Growth Model, External Demand-oriented Model, Domestic Demand-oriented Model, and Endogenous Growth Model. The former two models are exogenous model, with the critical factors affecting industry development are cross-borde investment and international demand; the latter two models are endogenous model, with the domestic demand-oriented and local industry embeddedness. With the background of GVC, the endogenous Counties of the national top 100 counties in Yangtze River Delta region should actively embed in GVC through the high road, relying on their competitive advantage in National Value Chain (NVC), in order to maximize the share of economic growth effects of GVC; Exogenous Counties should strengthen the innovation and brand building to breakthrough the structure blocking effects, in order to prompte the leading enterprise within the region to transform from Local Enterprises to Global Enterprise, and to enhance the control of GVC.(7) The indusrial character and the the critical path of industrial upgrading of Jiangyin Model and Kunshan Model:Kunshan Model representatives for exogenous counties, is a typical Exogenous Growth Model of industrial development. The basic features of Kunshan are:highly embedded in GVC, strong radiation of leading enterprises, highly specialized industrial co-operation, high concentration of industrial distribution, significantly characteristics namely economic of migratory birds. The critical path of industrial upgrading are:1) processing upgrade and enhance potential of production in GVC; 2) Feature upgrades, depthly integration between service and manufacturing production; 3) fostering the growth of local enterprises, and strengthen industrial embeddedness; 4) open up the domestic market and stimulate potential demand. Jiangyin Model representatives endogenous counties, is a typical Endogenous Growth Model of industrial development. The basic characteristics of indusrial development are:strong self ability of industry, domestic market-oriented, open capital operation, high concentration of industrial layout, good political acumen. The critical path of industrial upgrading are:1) high-end embedded form NVC to in GVC; 2) Product upgrade and enhance ability to create value; 3) chain upgrading, nurturing emerging strategic industries; 4) inheritance and innovation of outstanding entrepreneurship. |
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