Analysis Of The Effects Of TSFDI On China's Industry Upgrading In GVC

With the development of global production and trade, the world value creating system has changed in extremely significant ways such as vertical'disintegration and reorganization. More and more MNCs begin to practice global layouts based on value chains. With the predominance on capital, technology, human resource and so on, the MNCs from developed countries have dominated the highest value-added strategic links, while most developing country firms are located in the low level of Global Value Chain(GVC), arid become the suppliers of labor-intensive and lowest value-added products and services.Faced with the global essential transformation, enterprises from developing countries including Chinese enterprises should learn from the MNCs and search for favorable locations for each value chain link. With the unsatisfactory spillover effect of FDI in China, Technology Sourcing FDI becomes critical and an ideal tool for the developing countries to achieve international advanced technology, and come through the technological barriers for industrial development in order to achieve upgrading by increasing the investments in developed counties. In addition to the converse transfer of technology, the potential transfer of management is also what developing countries are longing for.Referring to research methods, we use both theoretic analysis and experiencing analysis, together with empirical analysis. From the perspective of the constructed theory frame, based on the situation in China, we attempt to indicate that Technology Sourcing FDI plays an important role in promoting the statue of China in Global Value Chain. Then we use the empirical analysis as an arbiter.This paper is divided into six parts. On the strength of GVC theory and Technology Sourcing FDI theory, this paper produces a new theory that Technology Sourcing FDI can be used as a valuable means of industry upgrading in accordance with the theory of Technique Accumulation. PartⅢconducts a system analysis frame on the process of industry upgrading: enterprises can realize both obvious and potential development including technology by making investments abroad. Meanwhile, the effects of technological spread bring along the improvement in technology throughout all the industries in nation. Such a dynamic circular process helps the continuous upgrading in industry. By generalizing the developing situation and problems of China's participation in Division of Global Value at present, part IV indicates that technological weakness is the main course of embedding in low GVC. Since FDI in China has fewer obvious effects, therefore, it is necessary for China to make Technology Sourcing FDI abroad. Taking the current situation in China into account, we make further research on how Technology Sourcing FDI helps industry upgrading by means of the theory constructed above. Part V tests the spillover effect empirically with econometric examination. The last part brings forward some proposals and countermeasures through Technology Sourcing FDI from the perspectives of enterprise, industry as well as country.