| This paper examines the effect of Transnational Corporations' technology transfer to China on China's industrial structure upgrading. The paper holds that TNCs' technology transfer has been a driving force for China's industrial structure upgrading. There are three ways through which the effect being materialized, that is, the technology reconstructing effect to traditional industry; the technology support effect to newly formed industry and the technology spillover effect. The empirical study of Chinese telecommunication equipment industry proves the positive effect. At last, the paper proposes three pieces of measures in order to better take advantage of the effects.
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