The Impact Analysis For The Influence Of OFDI On Value-added Rate Of China’s Manufacturing Export

After several decades of rapid development, our economy is entering “China’s new normal”. In 2014, Xi Jinping explained what is “China’s new normal” at APEC Economic leader’s meeting. He said we must finish the upgrading of structure and encourage innovating. This requires China’s enterprises to improve their technology and break away from the midstream of GVC. This paper analysises the influence of OFDI on value-added rate of China’s manufacturing export which can provide a reference for enterprises’ decisions on OFDI.This paper analysises the influence of OFDI on value-added rate of China’s manufacturing export from the theoretical and empirical aspects and aims to answer three questions: 1. Does OFDI increase domestic value-added rate of manufacturing export; 2. What is the differences among these three types of OFDI’s effect on value-added rate of China’s manufacturing export; 3. Is there hysteresis effect on influence of OFDI.This paper analysises the influence of OFDI on value-added rate of China’s manufacturing export with OLS and IV methods. The results show that: 1. On the whole, OFDI increases domestic value-added rate of manufacturing export; 2. the OFDI of value chain midstream has the biggest promotion effect on the domestic value-added rate, followed by the OFDI of value chain upstream, and the OFDI of value chain downstream lasts; 3. All of the OFDI’s influence on the domestic value-added rate has hysteresis effect. Generally speaking, the OFDI of value chain upstream’s promotion effect on the domestic value-added rate is becoming bigger and bigger over time in 10 years. And the OFDI of value added chain midstream’s promotion effect is becoming bigger and bigger during the first 7 years. The OFDI of value chain downstream’s promotion effect on the domestic value-added rate is becoming bigger and bigger over time in 10 years, but its’ promotion effect is smaller than the OFDI of value chain upstream.