The Embedding of Foreign Capital into Domestic Circulation and the Function Upgrading of the Manufacturing Value Chain
The report to the 20th National Congress of Communist Party of China proposed"enhancing the endogenous power and reliability of domestic circulation and improving the quality and level of international circulation."At present,the industrial foundation of domestic circulation in China is still not solid.The development of China's manufacturing faces some prominent difficulties,such as incomplete domestic industrial chain,weak research and development strength of core components and limited value-added rate.Simultaneously,the international circulation is more complicated and severe.With the tide of"anti-globalization"flooding,the risk of global supply chain breakage has increased sharply,and China's road to achieving functional upgrading of value chain has been frequently blocked.In the process of building a new development paradigm,foreign-owned enterprises are the key force to smooth China's domestic and international circulation.A natural question is whether the embedding of foreign capital into the domestic circulation can overcome the weakness of China's manufacturing,ensure the integrity,security,and resilience of core links in the domestic industrial chains.Solving this question will help to leverage the role of foreign capital in connecting domestic and international circulation,and promote the functional upgrading and the high-quality development of China's manufacturing.Based on the production decomposition framework that distinguishes the types of enterprise ownership,this paper measures the value-added contribution of foreign capital embedded in the domestic circulation,then theoretically and empirically analyzes the influence and mechanism of foreign capital embedded in the domestic circulation on the functional upgrading of the manufacturing value chain.The research findings of this paper include the following.First,the embedding of foreign capital into the domestic circulation can significantly promote China's manufacturing to move towards high-end functional activities of value chain.Second,the mechanism test emphasizes that foreign capital can exert the role of extending,supplementing,and strengthening the domestic industrial chain,and then facilitate China's manufacturing to realize the functional upgrading of value chain.Third,heterogeneity analysis shows that the components of foreign capital that are located in the upstream position of domestic enterprises,serve the domestic supply-side circulation,embed in low-tech intensive manufacturing and after the financial crisis can generate more pronounced effects of functional upgrading.Fourth,the extended analysis reveals that backward linkages with overseas enterprises in intermediate inputs can further enhance the positive role of foreign capital in the functional upgrading of China's manufacturing value chain.The possible contributions of this paper are as follows.First,this paper measures the level of foreign capital embedded in the domestic circulation through the geographical location characteristics of production and consumption,so as to clarify the active degree of foreign capital in the domestic circulation more scientifically.Second,based on the chain-extending,chain-supplementing and chain-strengthening effects brought by the embedding of foreign capital into the domestic circulation,this paper establishes the theoretical connection between foreign capital and functional upgrading of the manufacturing value chain,and enriches the empirical evidence of the economic effects of foreign capital entry.Third,this paper investigates the influence of the interaction between foreign-owned enterprises and overseas enterprises on the functional upgrading trend of China's manufacturing,which can more comprehensively reveal the role of foreign capital in building a new development paradigm.This paper also has some policy implications for China to expand higher-standard opening up.First,improve the business environment to enhance the attractiveness of the local super-sized market,and introduce more policy measures to spur foreign capital quality and quantity.Second,actively guide foreign capital to remove the bottlenecks,link the broken points and cultivate the strong points along the domestic industrial chain of manufacturing.Moreover,make full use of unique advantages of foreign capital in utilizing international resources and exploring international markets,and promote the construction of a mutually beneficial and win-win community of shared interests.
New Development ParadigmProduction Decomposition FrameworkForeign CapitalValue ChainFunctional Upgrading
万方数据
维普
