The Study Of Promotion Effect Of Foreign Direct Investment On The Core Competence Of China's Manufacturing Industry

In general,the improvement of the core capabilities of the manufacturing sector includes technology advancement and quality improvement.On one hand, technology advancement depends on the technological innovation ability,which could be enhanced in two aspects:innovation on production process mainly improve the productivity by equipment investment encouragement and production process reorganization,while innovation on products is characterized by the launch of new product,which is the key factor to maintain progress in the long run.On the other hand,with the fierce competition in the international market,enterprises have to improve their products quality constantly to survive and succeed.Therefore,the other core capability is quality improvement,which can be improved by improving Technology of products,elements of higher-quality inputs.Products quality can be measured by unit value,the higher the quality,the higher the unit value.This paper will study on the changes of the core capabilities of foreign-dominated sectors.FDI mainly invest in the manufacturing sector.The export of Industrial products has reached94.49%of total exports of China.Therefore,by comparing the changes of new product produced by foreign-dominated sectors and domestic-dominated sectors,we could measure the effect of the innovation made by foreign capital in China's manufactured goods.Product innovation can be measured by product diversification,which is expressed by the indicators such as Theil index,Gini coefficient.Products quality is measured by unit value,which is usually expressed by unit price and unit product price index,and this paper use the latter one to analyse the changes of product quality of foreign-dominated sectors,and study on the foreign capital's effect on the elevation of the product quality of the domestic manufacturing sector.According to this paper,FDI mainly invests in the field of the manufacturing sector,especially in certain industry inside the manufacturing sector.The foreign capital not only centralizes in the labor intensive industry,but also in some capital intensive industry.Foreign-dominated sectors decreases export diversification of the domestic the manufacturing sector,however,it increases product diversification of the industry which is foreign capital centralized.In other words,foreign-dominated sectors have negative effect on the technology diffusion of other industry to some extent.FDI has improved export product quality to a large extent.This shows that Foreign Direct Investment to increase manufacturing core competencies,which selectively enhance the effect.Industry compared to foreign-led,industry-funded technology to the manufacturing sector more significantly,that is,domestic enterprises and industries to enhance the core competencies of the manufacturing sector.