The Impact Of China's Manufacturing OFDI On Its Industrial Upgrading

With the introduction of national strategies such as "One Belt And One Road"and "made in China 2025",the development of manufacturing industry and OFDI of manufacturing industry have become the focus of people's attention.After nearly 40 years of development since the reform and opening up,China's manufacturing industry has established a complete,independent industrial system,ranking among the world's top and becoming a large manufacturing country.However,compared with the world's advanced level,China's manufacturing industry has been exposed to big but weak weaknesses.Problems such as the gradual disappearance of low-cost advantages,excess production capacity,serious environmental pollution,weak capacity for independent innovation,lack of medium and high-end brands and products,backward informatization level and low industrial structure have become increasingly prominent.At the same time,after the 2008 financial crisis,Germany,the United States,Japan and other advanced manufacturing countries put forward the strategy of "industrial salvation",and the world is undergoing a new round of industrial revolution.Facing the dual test at home and abroad,on May 19,2015,China's state council issued "made in China 2025",a manufacturing development strategy,which clearly points out the goal of China's manufacturing transformation and upgrading in the next 10 years,and gives indexes to measure the degree of manufacturing transformation and upgrading.The strategy also emphasizes the principle of "open cooperation" and encourages the manufacturing industry to promote industrial upgrading through OFDI.Therefore,this paper takes the strategy made in China 2025 as the research background and the specific requirements for industrial upgrading proposed in the strategy as the research framework,and takes the index system proposed in the strategy as a reference,two major indexes,"innovation ability" and "green development",which are greatly affected by the OFDI of the manufacturing industry,were selected for analysis and testing,and then the effects of OFDI in China's manufacturing industry on its industrial upgrading were investigated.In the new normal period of actively promoting the transformation and upgrading of manufacturing industry and the rapid development of OFDI,it is of great theoretical significance and practical value to study the impact of Ofdi on its industrial upgrading.From the perspective of theoretical significance,the research content of this paper plays a complementary role in the research on the correlation effect between OFDI and industrial upgrading.From the perspective of practical value,in this paper,the impact of OFDI on the industrial upgrading of China's manufacturing industry is reflected by examining the indicators that can reflect the development characteristics of China's manufacturing industry.The empirical results and policy suggestions are of great reference value for China to promote the industrial upgrading of the manufacturing industry through OFDI in the new normal.This paper first summarizes the theory of industrial upgrading and studies the relevant literature on the effect of OFDI on industrial upgrading.On this basis,basing on the analysis of the transmission mechanism from the perspective of investment motivation,it is found that the OFDI of manufacturing industry can affect its innovation ability and green development through different paths.This paper intercepts time series data from year of 2003 to 2015/2016,using time series model based on VAR model,using the Johanson cointegration test to manufacturing long-term cointegration relationship between foreign direct investment and its innovation ability and green development,and uses the VECM vector error correction model as the correction of long-term cointegration relationship.This paper analyzes the effect of OFDI in China's manufacturing industry on its industrial upgrading and puts forward corresponding policy suggestions.The results show that there is a long-term co-integration relationship between OFDI in China's manufacturing industry and its innovation ability and green development,Among them,the impact on innovation ability is negative.As China's manufacturing industry transfers assets to overseas countries too quickly and on a large scale,there is a certain degree of "out of localization".At the same time,China's manufacturing OFDI is still in the primary stage,and the main investment drivers are resource-seeking and market-seeking.The reverse spillover effect of these two causes of OFDI is not obvious,so the above results appear after using the current data for testing.On the other hand,the impact of OFDI on the green development of manufacturing industry is positive.As the OFDI enterprises of China's manufacturing industry have conducted resource-seeking OFDI,and with the transfer of the manufacturing industry with high energy consumption and high pollution to foreign countries,China's environmental conditions have been significantly improved,so this empirical result is also reasonable.The innovation of this paper is reflected in two aspects:the research contents and indicators are more in line with China's national conditions and the transmission mechanism is more systematic.Based on the requirements for the upgrading of the manufacturing industry proposed in "made in China 2025" and the measurement indexes of the transformation and upgrading of the manufacturing industry proposed in the strategy,the research content and index selection in this paper is more in line with the development characteristics of China's manufacturing industry and more in line with the national conditions.The deficiency of this paper lies in the small amount of sample data,the result of model estimation may have a pertain degree of deviation,and the research content needs to be further studied.