论DynamicResearchonCultivatingDynamicComparativeAdvantagesofChineseIndustries
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论文导读：er，italsoexhibitedastrongfossilizationofestablishedcomparativeadvantages，whichcanhardlysustainthecurrentdevelopmentmodel.Toachievesustainablegrowth，Chinaneedstocultivatenewdynamiccomparativeadvantages.1.AnalysisoftheLock-inMechaniofLaborDivisionandtheMe
Abstract： This paper theoretically analyzes the lock-in mechani of labor division for developing countries when they stick to static comparative advantages and the internal mechani of cultivating dynamic comparative advantages. Through empirical analysis， this paper finds that China， while sharing the benefits of globalization， showcases the lock-in effect regarding its status in the international labor division chain. The analysis finds that in its participation in globalization， the net barter terms of trade （NBTT） and factorial terms of trade for China are deteriorating， and the income terms of trade are seriously overvalued， resulting in a series of contradictions， such as scanty returns for enterprises， slow income growth， increasing trade frictions， and intensified environmental and resource pressures. The paper analyzes rapidly changing factors in China’s comparative advantages and characteristics of the changes in industries where China possesses comparative advantages. According to changes in different types of industries at different stages， this paper puts forward suggestions on direction and policies for cultivating dynamic comparative advantages.
Keywords： comparative advantage， industry， terms of trade
JEL Classifications： L50， O20
A country’s economic development is a process of constant change in its comparative advantages and upgrades of the industrial structure. Therefore， bringing comparative advantages into play is absolutely not to adhere to established advantages， but to cultivate future-oriented dynamic comparative advantages in order to upgrade the industrial and trade structures. Otherwise a country will be locked in the low end of the international labor division chain. China well leveraged its comparative advantages and achieved rapid economic growth for a time. However， it also exhibited a strong fossilization of established comparative advantages， which can hardly sustain the current development model. To achieve sustainable growth， China needs to cultivate new dynamic comparative advantages.
1. Analysis of the Lock-in Mechani of Labor Division and the Mechani for Developing Dynamic Comparative Advantages
Many underdeveloped countries are locked in the low end of international division of labor with a widening gap compared to other countries. Meanwhile， some countries he taken off and upgraded their status in the international labor division system by casting off their original comparative advantages. There are conditions and underlying mechanis in both cases.1.1 The Lock-in Mechani of Labor Division under Fossilized Comparative Advantages
There are several reasons why a fossilizing comparative advantage leads to lock-in effects. First， sticking to static comparative advantages locks technological progress into a necessary upgrade of processes and products. Second， rel论文导读：andthepricecompetitionleadstoiciouscycleandresortingtopolicysupport，hencepathdependence.Thirdisthehighcostoftranormingtheindustrialstructure.Finally，theunequalmarketcompetitionstatusandvariancesintheelasticityofsupplyanddemand，etc.areadditionalreasons
iance on the low cost and the price competition leads to a vicious cycle and resorting to policy support， hence path dependence. Third is the high cost of tranorming the industrial structure. Finally， the unequal market competition status and variances in the elasticity of supply and demand， etc. are additional reasons.
（1） The global labor division model leads to developing countries’ path dependence regarding technological progress. Technical innovation falls into product innovation and process （course） innovation. Product innovat摘自：毕业论文格式字体www.7ctime.com
ion is mostly achieved in developed countries. In developing countries， process innovation happens during application of production technologies imported from advanced countries， or to put it simply， through “learning by doing.” Industrial upgrade in the globalization context follows this trajectory： process upgrade → product upgrade → function upgrade → chain upgrade. However， for either the buyer-driven or technology-driven value chains， global big buyers or technological leaders will both encourage downstream suppliers and sub-contractors to accelerate processes and product upgrades but impede their function upgrade so as to protect their own competitive edge and interests. Thus， they always bring developing countries under control， both in terms of technology and the market.
（2） Reliance on the low cost and the price competition also leads to path dependence， such as resorting to preferential policies on energy， resources and land， export rebates or even leniency with labor security and environmental protection. Meanwhile， intermediary input （some enterprises even cheat on workmanship and materials or downgrade the product quality） is reduced in order to improve competitiveness， or equipment is improved for less demand on labor.
（3） The high cost of tranorming the industrial structure tends to lock in the status in the international labor division system. Traditional theories overlook the cost of tranorming industrial structure. In actuality， due to asset specificity， time and expertise are needed to cultivate laborers’ skills and protracted development of market channels， and tranorming the industrial structure entails a high cost. As a result， many enterprises choose not to suspend production even in the case of scanty returns or short-term losses， because they would otherwise be forced to pay more sunk costs for entry into a new industry. Moreover， it requires more efforts to open up new markets. Eventually， if enterprises are not spurred to accelerate tranormation and upgrade， but are sustained by export-supportive policies1， it is more likely that they will be trapped in the original low end of the global labor division chain.（4） An unequal market competition status and variances in the论文导读：headecliningmarginalcostorincreasingreturnstoscale.Second，industrieustunderstandthedifferencebetweenthelifecycleofproductsandtechnologiesandtherelativetechnicalprogressrate，andstrivetoacceleratetechnicalprogress.Thelifecycleofproductinnovationandcour
elasticity of supply and demand lead to a disadvantageous market position. General processing undertaken by developing countries is characterized by limitless supply and excessive competition due to a low entry threshold； while higher-end parts of the value chain governed by developed countries often monopolize markets. Therefore， although developing countries he succesully tranormed from exporting primary products to finished products， they cannot reverse the deteriorating net barter terms of trade （NBTT）， specifically， the deteriorating NBTT of finished products. Due to the unequal market competition status and weak bargaining power， profitability of Chinese enterprises is very all despite the low cost and competitive price of their products. Such a market structure， plus vicious competition among domestic enterprises， results in great losses and throws most enterprises to the edge of survival. Surplus value is almost all seized by multinational companies sitting on the upstream of the industrial chain.2
1.2 Underlying Mechani of Cultivating Dynamic Comparative Advantage and Upgrading the Status in the Labor Division System
To oid lock-in effects and achieve economic take-off， the key is to cultivate new comparative advantages， diversify exports， develop more sophisticated production technologies and upgrade the industrial and trade structure.
First， industries must cast off constraints of the rising marginal cost of resource endowments and strive to reduce the marginal cost of acquired advantages. Comparative advantages fall into resource endowments and acquired advantages. The former includes natural resources such as minerals， land and population， and the latter includes capabilities and network relations such as technologies， design， management and organization as well as infrastructure and institutional factors. As for their differences， resource endowments generally he the attributes of depletion and a rising marginal cost （unless new mineral deposits are discovered）， while acquired advantages he positive， dynamic accumulative effects， and possibly he a declining marginal cost or increasing returns to scale.
Second， industries must understand the difference between the life cycle of products and technologies and the relative technical progress rate， and strive to accelerate technical progress. The life cycle of product innovation and course innovation is different， and the characteristics and rate of technical innovation vary at different stages. Develop源于：论文www.7ctime.com
ing countries mainly undertake production at the product standardization and maturity stage， and technical innovation is mostly the course innovation. Namely， innovations are achieved through “learning by doing，” and the innovation rate and productivity improve quickly. This determines that industries whose technologies he matured and whose comparative advantages are declining at the maturity stage in developed countries are industries of c论文导读：Third，industrieustunderstandthedirectionaldifferenceofindustrialupgradeandtechnicalprogressandtheymustshiftfrompr
omparative advantages through cultivation in developing countries.Third， industries must understand the directional difference of industrial upgrade and technical progress and they must shift from process upgrade to function upgrade. Studies by Motoshige Itoh indicate that technical development in industries possessing comparative advantages will improve the productivity， but it will not change the comparative advantage structure and the relative income ratio. When marginal industries whose technological gap is reduced are chosen to expand the scope of exporting industries， the comparative advantage structure and the relative income ratio will change greatly （Komiya Ryūtarō， 1988）. The globalization process dominated by multinational companies further highlights the directional difference of technical progress and determines the huge difference between the effect of function upgrade and process upgrade. Technical progress focusing on process upgrade can improve productivity and product quality， which benefits both suppliers of developing countries and multinational companies. Technical progress focusing on function upgrade， however， is impeded by multinational companies by all means because it improves developing countries’ terms of trade and constitutes a direct competition threat against them.
The fourth mechani is to improve the market position and strive to improve the terms of trade. Improving the market position requires an increase in industrial concentration and an improvement in technology， marketing networks， brands and the supply chain. Labor-intensive industries are mostly highly decentralized， while more centralized industries are those which possess an obvious economy of scale and a high level of technological intensity. Chinese enterprises lag behind in terms of high-end parts of the global value chain， such as R&D， design， marketing， supply chain management and brands. Excessive concentration in processing and production and hey reliance on the processing trade lead to excessive competition to their disadvantage during the global division of labor. Conversely， enterprises which possess strong technological capabilities he greater bargaining power.
2. Sticking to Static Comparative Advantage Might Lock in the Status in the Labor Division System， Which Can Hardly Sustain National Economic Growth
Although leveraging comparative advantages can improve the productivity （the labor division efficiency） and promote economic growth， it does not share the benefits of labor division， or the trade benefits. Sticking to static comparative advantages will unoidably cause a lock-in effect. China’s reinforcement of labor-intensive sectors slows down residential income growth， imposes heier pres论文导读：ialTermsofTradeAreSubstantiallyOvervaluedMoststudiesarguethatalthoughChina’sNBTThasdeteriorated，theincometermsoftradeandfactorialtermsoftradeheimprovedgreatly.Ourstudieindthatimprovementintheincometermsoftradeisseriouslyovervalued，andimprovementin
sure on energy， resources and the environment and aggrates trade frictions with other countries. Obviously， a reinforcement of labor-intensive sectors can hardly sustain the whole economy.[3]2.1 Analysis of Characteristics of China’s Participation into Global Labor Division by Leveraging its Comparative Advantages
By leveraging comparative advantages， China has participated in the global labor division and achieved rapid foreign trade and economic growth since the reform and opening-up. However， such growth is basically based on quantity expansion； the export structure is to a considerable extent fossiled in labor-intensive and resource-cosuming processing and production. Upgrade of the industrial and export structure is mostly nominal， without reaching the height as being measured by traditional standards. China’s major exports he been tranormed from textiles and garments to electrical and mechanical products3. However， as the global labor division has been shifted from being inter-industry and inter-sector to being intra-industry and intra-product， China is still sitting at the low end of the global value chain. China still engages in processing and production. It lags behind， or lacks entirely， high value-added parts including key equipment， key technologies， brands， marketing and supply chain management. Its so-called technology-intensive products and high-tech products are merely the outcome of undertaking labor-intensive assembling. Therefore， upgrade of the industrial structure is only nominal or partial. Looking from the real technical content， real returns and the cost， there is a great deviation between the real and nominal upgrade. China’s economic growth， especially foreign trade growth， pays a huge cost. Benefits shared from rapid trade growth under nominal ugrade of the industrial structure are limited.
2.2 NBTT Continues to Deteriorate， and Income Terms of Trade and Factorial Terms of Trade Are Substantially Overvalued
Most studies argue that although China’s NBTT has deteriorated， the income terms of trade and factorial terms of trade he improved greatly. Our studies find that improvement in the income terms of trade is seriously overvalued， and improvement in the factorial terms of trade is an erroneous judgment. China’s export income growth is completely attributed to quantity expansion， and decline of the export price is not compensated by the rising productivity.
First， NBTT continues to deteriorate， and the relative purchasing power of unit exports versus imports declines substantially. Due to restrictions of the international population flow as well as the different market status between developing and developed countr论文导读：exception.Third，energy，resourceandenvironmentalconstraintsimposegreatpressureonsustainabledevelopment.Generalprocessingandproductionconsumeoreenergyandresourcesandcauseoreenvironmentalpollutionthanhigh-endpartsoftheindustrialchain.Afossilizedroleasaproce
ies， the deterioration of developing countries’ NBTT extends from previous primary products to finished products now despite their wider participation into global labor division. The same is true of China. Although finished products account for 95% of China’s exports， its NBTT index of 2009 fell by 32.1% compared to 1980， showing China’s relative purchasing power of unit exports in 2009 only equal to 67.9% of that in 1980.[3][4]摘自：本科毕业论文模板www.7ctime.com
First， workers’ wages grow slowly. Cheap factors-driven economic growth and price competition lead countries to a path dependence regarding technological progress， which is always oriented at reducing the cost. This determines that exporting industries that stick to established comparative advantages he limited income growth space4 and scanty returns. Data indicate the higher the export rate in Chinese industries， the lower their profit rate. In industries whose export rate is above 40%， the profit rate is less than 5%. The rate of return on total assets and sales profit rate of communication equipment， computer and other electronic equipment industry are even lower than that of textiles and garments.5
Second is increasing trade frictions and worsening trade environment. Chinese products occupy the overseas market with “all profits， but quick returns” tactics， for which many countries initiate anti-dumping and anti-subsidy petitions against China. The number of overseas trade remedy investigations against China has been the world’s biggest for 16 consecutive years. Trade frictions with China he further increased， especially with the strengthening of foreign trade protectioni following the outbreak of the global financial crisis. Once an affirmative determination is made on antidumping and anti-subsidy petitions， Chinese enterprises will withdraw from the country concerned without exception.
Third， energy， resource and environmental constraints impose great pressure on sustainable development. General processing and production consumes more energy and resources and causes more environmental pollution than high-end parts of the industrial chain. A fossilized role as a processer or producer further aggrates China’s energy， resource and environmental pressure and burdens China’s industrialization with expensive energy and raw materials. Energy sing and emission reduction is in the national spotlight and environmental pressure remains a prominent issue.
Finally， China is faced with the pressure of industrial traner and tranormation due to rapidly rising costs. The price of energy and raw materials and labor costs are rising rapidly，论文导读：mando摘自：本科毕业论文评语www.7ctime.compening-up，Chinahaullybenefitedfromits“demographicdividend.”However，startingfromtheendoftheTwelfthFiveYearplan（2011-2015），China’slaborsupplywillcometoaninflectionpointandthedemographicdividendwillwearoff.Aorecast
and the Renminbi is constantly appreciating. Concurrently， the industrialization level of other developing countries such as 源于：大学毕业论文格式www.7ctime.com
Vietnam， Indonesia and India is improving rapidly. They are becoming strong rivals to China’s export market. Meanwhile， social conflicts triggered by low labor remuneration are increasing， showing the production model featuring cheap labor and price competition has come to an end.[3][4][5][6]In addition， fossilizing comparative advantages and reinforcing the price competition model discourage differentiation and servicisation. As a result， high value-added， service-oriented parts including R&D， design marketing and brands are missing. This in turn restricts development of producer services and throws the economy into the “middle-income trap.”
3. Trend of China’s Dynamic Comparative Advantages
3.1 China’s Factors with Comparative Advantages Change Significantly
As China industrializes， its comparative advantages vary at different stages. Specifically， as the advantage of the population size diminishes， advantages in the population quality， human capital， capital accumulation capabilities， technological capabilities， business and investment management capabilities as well as infrastructures are improving.
（1）The advantage in the population size is diminishing， but the labor quality and human capitals are growing into advantages. Since the reform and o摘自：本科毕业论文评语www.7ctime.com
pening-up， China has fully benefited from its “demographic dividend.” However， starting from the end of the Twelfth Five Year plan （2011-2015）， China’s labor supply will come to an inflection point and the demographic dividend will wear off. As forecast by the United Nations， the absolute size of China’s working-age population （from the age of 15 to 64） which is on the rise now will start to decline each year from 2015. Additionally， the population’s changing value is another factor6. The “shortage of labor” occurring in the Pearl River Delta and Yangtze River Delta shows that the structure of labor supply and demand is changing. Meanwhile， China’s labor quality has improved significantly. For instance， the number of undergraduates for every 100，000 people increased from 439 in 2000 to 2，145 in 2009.
（2）The capital accumulation capability and enterprises’ business management capability he improved significantly and the advantage in the market scale has become prominent. In the past， China had meager funds， but now it possesses relatively surplus funds. It is no论文导读：（3）Technologicalcapabilitiesimprovesignifica
w the world’s second largest creditor country and the biggest net capital exporter. Also， equipment per worker has increased substantially. The per capita net fixed-assets of enterprises above the designated size increased from RMB8，000 in 1980 to RMB 221，300 in 2010. Finally， the ratio of capital-intensive industries increases rapidly and the capital-output ratio has risen substantially. Thanks to growing capital accumulation capabilities and the labor income， China’s market scale expands significantly with its economic aggregate and import scale being second only to the US. Meanwhile， Chinese enterprises’ business and investment management capabilities and the capability of developing supporting industries are growing rapidly. For instance， the Pearl River Delta and Yangtze River Delta he gathered together the world’s biggest electronic information industrial clusters with the most complete set of supporting industries.[3][4][5][6][7]（3）Technological capabilities improve significantly， displaying apparent advantages among developing countries despite a gap with developed countries. China has made significant progress. It has engaged in rapid industrialization and large-scale capital input and accumulation of human capital. China has implemented a national innovation strategy and increased input in education， training and R&D. At the same time， China’s technological and innovation capabilities he improved rapidly. Apart from afore-mentioned higher population quality， the percentage of R&D expense in GDP increased from 0.9% in 2000 to 1.76% in 2010. The number of China’s patents has also rapidly increased. Technical innovation in Chinese industries has met the conditions of market demands and supply. From the demand perspective， as the cost of factors rises， it becomes imperative for enterprises to increase technical contents and the added value through innovation. From the supply perspective， growing funds accumulation capabilities， mass production capabilities as well as the capability of developing supporting industries are conducive to technical breakthroughs and industrialization of products that are sophisticated in components and technologies.
（4） Improved infrastructure is now a comparative advantage. China’s transportation infrastructure has improved rapidly both in terms of the scale and quality. Between 1990 and 2010， China’s lengths of railway， highway and civil iation capacity he increased by 2.1%， 7.2% and 8.4论文导读：firstcategoryincludesindustriespossessingsteadycomparativeadvantages，mainlylabor-intensiveindustries.Forexample，clothingandotherfiberproducts，featherandleatherproducts，textiles，stationeryandsportinggoods，woodcraftsandbamboo，rattan，palm，andstrawproducts，furniture，
%， respectively， and the length of pipeline transportation has increased by 8.0% annually on erage. Meanwhile， the quality of transportation infrastructure has improved. The percentage of double-track railway in national railways in operation increased from 24.4% in 1990 to 44.8% in 2010， and the percentage of the length of high-grade highways increased from 72.1% to 82.4%. The informationization level has improved even faster， with the telephone penetration rate rising from 0.4% in 1978 to 86.4% in 2010 and the Internet penetration rate reaching 34.3% in 2010. Although China’s infrastructures still lag behind developed countries， they are far superior to those in India and Brazil.
3.2 Evolution of Chinese Industries Possessing Comparative Advantages
As factors with comparative advantage change， Chinese industries possessing comparative advantages he also changed to some extent. Depending on comparative advantages possessed， Chinese industries can be classified into the following categories：[3][4][5][6][7][8]源于：科研方法与论文写作www.7ctime.com
The first category includes industries possessing steady comparative advantages， mainly labor-intensive industries. For example， clothing and other fiber products， feather and leather products， textiles， stationery and sporting goods， woodcrafts and bamboo， rattan， palm， and straw products， furniture， plastic products and metal products. These industries remain China’s advantageous industries， but their factors with comparative advantages are changing remarkably. Take the textiles industry for instance， due to the rising cost of labor and raw materials， its cost price advantage has declined； however， thanks to accumulation of technologies， improved R&D and innovation， improved capability of supplying medium- and high-grade fabrics and growing manufacturing capacity of equipment， more value-added products featuring diversified functions， personalization and fashionable design are produced， enabling textiles to maintain strong comparative advantages for now. In 2010， the output value of new products in textiles and gar源于：职称论文www.7ctime.com
ment enterprises above the designated size was 1.5 times that of 2005. A considerable part of medium- and high-grade fiber materials and fabrics which were imported in the past are now supplied domestically or even exported.
Second are industries whose comparative disadvantages he already turned into论文导读：ds，productdiversityandservicesinordertobuildadifferentiatedcompetitiveedge.Enterprisesshouldestablishoverseaarketingnetworksandthegovernmentshouldgrantsupportinfinancingandcustomormalities.Second，forindustriespossessingdynamiccomparativeadvantagesthatare
or are on the verge of turning into comparative advantages. These industries he a medium level of factor intensity. Those whose comparative disadvantages he already turned into comparative advantages he a medium level of technology and labor intensity. These industries include manufacturers of electronic and telecommunication equipment， instrument and culture & office equipment， electrical machinery and equipment， and rubber products. For industries whose comparative disadvantages are on the verge of turning into comparative advantages， some he a medium level of technology and labor intensity and some he a medium level of capital intensity. The former type includes industries such as standard machinery， special-purpose equipment and transportation equipment. They he possessed strong advantages in management， supporting industries， industrial cluster and production networks and enjoy a growing export status. The latter type includes industries such as chemical fiber and ferrous metal elting and rolling processing， which through “learning by doing” he accumulated experience in processing craft， process， investment and business management and he made rapid progress in R&D and manufacturing of related equipment.[3][4][5][6][7][8][9]摘自：毕业论文格式范文www.7ctime.com
（3） Classify and diversify industrial policies in accordance with industries’ changing comparative advantages. Cultivating industries’ dynamic comparative advantages is not simply to shift supportive policies from one industry to anther. Instead， it requires the government to cultivate industries possessing dynamic comparative advantages and to develop factors with comparative advantage based on the growth cycle of different industries and their changing comparative advantages.
First， for industries with established comparative advantages such as textiles and garments and other labor-intensive industries， the priority is to improve their R&D， design， brands， product diversity and services in order to build a differentiated competitive edge. Enterprises should establish overseas marketing networks and the government should grant support in financing and customs formalities.
Second， for industries possessing dynamic comparative advantages that are becoming China’s key export industries， supportive policies should focus on improving their productivity， red论文导读：（4）Strengthenbrandbuildingandestablishasystemsupportingproprietarybrands.First，thegovernmentshouldencourageenterprisestocreatetop源于：论文封
ucing their export trade cost and developing overseas markets. Communication equipment， electronics， and electrical and mechanical industry he become major export industries， so priority is to support their R&D， design and domestic production of critical equipment and components so that their status in the global labor division system is upgraded. For standard machinery， special-purpose machinery， iron&steel and fiber industry whose international competitiveness has potential for f摘自：毕业论文结论怎么写www.7ctime.com
urther improvement， supportive policies should be unveiled to upgrade their products and encourage them to develop overseas markets on the precondition of improving environmental standards and reinforcing energy sing and emission reduction.
Third， for strategically important industries which he always been at comparative disadvantages such as medical and pharmaceutical products， high-end equipment and critical components， critical equipment and materials， there should be moderate market protection and funds support. Enterprises should improve their R&D， design and supply chain management. In addition， strategic entry into oversea markets should be encouraged to establish a market structure that caters to the welfare of Chinese people. For petroleum refining， paper-making and paper products as well as ferrous metal elting and rolling processing， enterprises should strengthen technical innovation， develop new products， improve product quality and reinforce energy sing and emission reduction to improve their international competitiveness.[3][4][5][6][7][8][9][10][11]（4） Strengthen brand building and establish a system supporting proprietary brands. First， the government should encourage enterprises to create top源于：论文封面格式www.7ctime.com
brands through technological progress and improved quality， perfect the quality control system， standardization system and the metrology testing system and implement a strategy of revitalizing enterprises through famous brands. Second， the government should initiate the “national branding project” and improve its mechani of evaluating famous brands. Third， the government should increase society’s consciousness of protecting brands through increased publicity so as to论文导读：utdatedequipment.（6）DevelopamarketstructureofworkablecompetitiontoimproveChina’arketposition.Chinashouldembracedifferentstrategiesinternallyandexternallytopromoteworkablecompetition.Externally，Chinashouldbreakthemonopolyofmultinationalcompanies，encouragestr
create a forable environment for development of proprietary brands. The government can also support enterprises possessing proprietary brands through government procurement， interest subsidies and credit support. Fourth， hostile takeover by foreign enterprises should be prevented during joint-venture partnerships and merger and acquisition of domestic enterprises and brands. Finally， enterprises should be encouraged to establish logistics and distribution centers and other marketing networks abroad.
（5） Improve industrial tranormation ability and reduce tranormation cost. Given the high cost of tranorming industrial structure caused by factors such as asset specificity， time and expertise needed to cultivate laborers’ skills， the government should unveil forable policies aimed at reducing this cost. On one hand， the government should improve the environmental and technological admission standards and accelerate elimination of backward production. On the other hand， for industries of overcapacities commonly agreed by the government and enterprises， the government can lend support in promoting restructuring， debt relief， reemployment training， and subsidizing enterprises for elimination of outdated equipment.
（6） Develop a market structure of workable competition to improve China’s market position. China should embrace different strategies internally and externally to promote workable competition. Externally， China should break the monopoly of multinational companies， encourage strategic entry and increase industrial concentration to build capabilities of contending with multinational companies. Internally， China should develop an economy of scale and promote moderate competition. First， China should advance the reform in service industries including banking， insurance， railway， civil iation， postal and telecommunication， and loosen the control over market access and equity ratio for private enterprises. Second， annexation and reorganization should be advanced to achieve centralization and conglomeration， which will serve to improve China’s market position. For industries with a remarkable economy of scale such as iron & steel， petrifaction， automobiles and shipping， the government should encourage large leading enterprises to carry forward transregional annexation and reorganization. For emerging industries such as new energy， electronic information and biomedicine， the focus should be to build strategic alliances among enterprises of different sizes for R&D， production， market and talent cultivation. For equipment manufacturing， some large conglomerates capable of designing and providing a complete set of products and systematic services should be fostered. Third， an innovative milieu should be created， and specialized markets and platforms serving technical innovation should be developed to promote expansion of all and medium-sized enterprises. Finally， examination of mergers and acquisitions by foreign enterprises should be str论文导读：ialtranertoprolongthelifecycleofindustries.Thisrequiresthegovernmenttoincreaseinputininfrastructureconstructionsoastoreducelogisticscostsincentralandwesternregionsandbuildastrongerbasisofundertakingindustriestobetranerredfromeasternregions.Again，theg
ict and the quality of utilizing foreign funds should be improved to prevent multinational companies from controlling China’s leading manufacturing enterprises and key service industries.[3][4][5][6][7][8][9][10][11][12]（7） Emphasize coordination among industrial policies， trade policies and regional policies. The focus of foreign trade policies should shift from promoting export growth to tranorming foreign trade development model. Export rebates and policies delaying normalization of the factor price aiming at alleviating problems like export slump and declining profitability of some enterprises should not go against tranormation of the development model. Second， differentiated competition strategies should be embraced according to the development level of trade partners. For developing countries， China should expand labor-intensive exports with proprietary brands and exports with a medium level of factor intensity. In addition， overseas economic and trade cooperation zones can be established through state-level cooperation so as to traner Chinese industries whose comparative advantages are declining. As for trade with developed countries， the product structure should be tranormed， exports should be diversified and the price competition model should be changed. Third， following the life cycle of products and leveraging regional development disparities， the government should push ahead with industrial traner to prolong the life cycle of industries. This requires the government to increase input in infrastructure construction so as to reduce logistics costs in central and western regions and build a stronger basis of undertaking industries to be tranerred from eastern regions. Again， the government should encourage enterprises to be moved out to less developed regions to apply leading technologies to improve comprehensive competitiveness and sustainability of economic growth there， and prevent traner of backward production capacities.
（8） Pay attention to methodologies to reduce trade frictions. Developing strategic emerging industries and cultivating dynamic advantages should be supported by policies complying with rules of the World Trade Or论文导读：talloworexpandedreproduction.References：KomiyaRyūtarō.，etal.1988.JapaneseIndustrialPolicy.Beijing：InternationalCulturePublishingCorporation（inChinese）：279.
ganization. Functional policies supporting vocational education and training， R&D， platform construction， R&D of generic technologies， network construction and subsidies on patent application should be prioritized. Before further appreciation of Renminbi， the government should first improve the price formation mechani in the factor market to rationalize the domestic price of various factors and allow it to reflect their real value. Again， the government should improve the policy of attracting investment to ensure that the cost of factors such as land， energy and the environment is rationalized. In particular， wages and welfare of workers should be kept at a level that allows for expanded reproduction.
References：
Komiya Ryūtarō.， et al.1988. Japanese Industrial Policy. Beijing： International Culture Publishing Corporation （in Chinese）： 279.[3][4][5][6][7][8][9][10][11][12][13]
Abstract： This paper theoretically analyzes the lock-in mechani of labor division for developing countries when they stick to static comparative advantages and the internal mechani of cultivating dynamic comparative advantages. Through empirical analysis， this paper finds that China， while sharing the benefits of globalization， showcases the lock-in effect regarding its status in the international labor division chain. The analysis finds that in its participation in globalization， the net barter terms of trade （NBTT） and factorial terms of trade for China are deteriorating， and the income terms of trade are seriously overvalued， resulting in a series of contradictions， such as scanty returns for enterprises， slow income growth， increasing trade frictions， and intensified environmental and resource pressures. The paper analyzes rapidly changing factors in China’s comparative advantages and characteristics of the changes in industries where China possesses comparative advantages. According to changes in different types of industries at different stages， this paper puts forward suggestions on direction and policies for cultivating dynamic comparative advantages.
Keywords： comparative advantage， industry， terms of trade
JEL Classifications： L50， O20
A country’s economic development is a process of constant change in its comparative advantages and upgrades of the industrial structure. Therefore， bringing comparative advantages into play is absolutely not to adhere to established advantages， but to cultivate future-oriented dynamic comparative advantages in order to upgrade the industrial and trade structures. Otherwise a country will be locked in the low end of the international labor division chain. China well leveraged its comparative advantages and achieved rapid economic growth for a time. However， it also exhibited a strong fossilization of established comparative advantages， which can hardly sustain the current development model. To achieve sustainable growth， China needs to cultivate new dynamic comparative advantages.
1. Analysis of the Lock-in Mechani of Labor Division and the Mechani for Developing Dynamic Comparative Advantages
Many underdeveloped countries are locked in the low end of international division of labor with a widening gap compared to other countries. Meanwhile， some countries he taken off and upgraded their status in the international labor division system by casting off their original comparative advantages. There are conditions and underlying mechanis in both cases.1.1 The Lock-in Mechani of Labor Division under Fossilized Comparative Advantages
There are several reasons why a fossilizing comparative advantage leads to lock-in effects. First， sticking to static comparative advantages locks technological progress into a necessary upgrade of processes and products. Second， rel论文导读：andthepricecompetitionleadstoiciouscycleandresortingtopolicysupport，hencepathdependence.Thirdisthehighcostoftranormingtheindustrialstructure.Finally，theunequalmarketcompetitionstatusandvariancesintheelasticityofsupplyanddemand，etc.areadditionalreasons
iance on the low cost and the price competition leads to a vicious cycle and resorting to policy support， hence path dependence. Third is the high cost of tranorming the industrial structure. Finally， the unequal market competition status and variances in the elasticity of supply and demand， etc. are additional reasons.
（1） The global labor division model leads to developing countries’ path dependence regarding technological progress. Technical innovation falls into product innovation and process （course） innovation. Product innovat摘自：毕业论文格式字体www.7ctime.com
ion is mostly achieved in developed countries. In developing countries， process innovation happens during application of production technologies imported from advanced countries， or to put it simply， through “learning by doing.” Industrial upgrade in the globalization context follows this trajectory： process upgrade → product upgrade → function upgrade → chain upgrade. However， for either the buyer-driven or technology-driven value chains， global big buyers or technological leaders will both encourage downstream suppliers and sub-contractors to accelerate processes and product upgrades but impede their function upgrade so as to protect their own competitive edge and interests. Thus， they always bring developing countries under control， both in terms of technology and the market.
（2） Reliance on the low cost and the price competition also leads to path dependence， such as resorting to preferential policies on energy， resources and land， export rebates or even leniency with labor security and environmental protection. Meanwhile， intermediary input （some enterprises even cheat on workmanship and materials or downgrade the product quality） is reduced in order to improve competitiveness， or equipment is improved for less demand on labor.
（3） The high cost of tranorming the industrial structure tends to lock in the status in the international labor division system. Traditional theories overlook the cost of tranorming industrial structure. In actuality， due to asset specificity， time and expertise are needed to cultivate laborers’ skills and protracted development of market channels， and tranorming the industrial structure entails a high cost. As a result， many enterprises choose not to suspend production even in the case of scanty returns or short-term losses， because they would otherwise be forced to pay more sunk costs for entry into a new industry. Moreover， it requires more efforts to open up new markets. Eventually， if enterprises are not spurred to accelerate tranormation and upgrade， but are sustained by export-supportive policies1， it is more likely that they will be trapped in the original low end of the global labor division chain.（4） An unequal market competition status and variances in the论文导读：headecliningmarginalcostorincreasingreturnstoscale.Second，industrieustunderstandthedifferencebetweenthelifecycleofproductsandtechnologiesandtherelativetechnicalprogressrate，andstrivetoacceleratetechnicalprogress.Thelifecycleofproductinnovationandcour
elasticity of supply and demand lead to a disadvantageous market position. General processing undertaken by developing countries is characterized by limitless supply and excessive competition due to a low entry threshold； while higher-end parts of the value chain governed by developed countries often monopolize markets. Therefore， although developing countries he succesully tranormed from exporting primary products to finished products， they cannot reverse the deteriorating net barter terms of trade （NBTT）， specifically， the deteriorating NBTT of finished products. Due to the unequal market competition status and weak bargaining power， profitability of Chinese enterprises is very all despite the low cost and competitive price of their products. Such a market structure， plus vicious competition among domestic enterprises， results in great losses and throws most enterprises to the edge of survival. Surplus value is almost all seized by multinational companies sitting on the upstream of the industrial chain.2
1.2 Underlying Mechani of Cultivating Dynamic Comparative Advantage and Upgrading the Status in the Labor Division System
To oid lock-in effects and achieve economic take-off， the key is to cultivate new comparative advantages， diversify exports， develop more sophisticated production technologies and upgrade the industrial and trade structure.
First， industries must cast off constraints of the rising marginal cost of resource endowments and strive to reduce the marginal cost of acquired advantages. Comparative advantages fall into resource endowments and acquired advantages. The former includes natural resources such as minerals， land and population， and the latter includes capabilities and network relations such as technologies， design， management and organization as well as infrastructure and institutional factors. As for their differences， resource endowments generally he the attributes of depletion and a rising marginal cost （unless new mineral deposits are discovered）， while acquired advantages he positive， dynamic accumulative effects， and possibly he a declining marginal cost or increasing returns to scale.
Second， industries must understand the difference between the life cycle of products and technologies and the relative technical progress rate， and strive to accelerate technical progress. The life cycle of product innovation and course innovation is different， and the characteristics and rate of technical innovation vary at different stages. Develop源于：论文www.7ctime.com
ing countries mainly undertake production at the product standardization and maturity stage， and technical innovation is mostly the course innovation. Namely， innovations are achieved through “learning by doing，” and the innovation rate and productivity improve quickly. This determines that industries whose technologies he matured and whose comparative advantages are declining at the maturity stage in developed countries are industries of c论文导读：Third，industrieustunderstandthedirectionaldifferenceofindustrialupgradeandtechnicalprogressandtheymustshiftfrompr
omparative advantages through cultivation in developing countries.Third， industries must understand the directional difference of industrial upgrade and technical progress and they must shift from process upgrade to function upgrade. Studies by Motoshige Itoh indicate that technical development in industries possessing comparative advantages will improve the productivity， but it will not change the comparative advantage structure and the relative income ratio. When marginal industries whose technological gap is reduced are chosen to expand the scope of exporting industries， the comparative advantage structure and the relative income ratio will change greatly （Komiya Ryūtarō， 1988）. The globalization process dominated by multinational companies further highlights the directional difference of technical progress and determines the huge difference between the effect of function upgrade and process upgrade. Technical progress focusing on process upgrade can improve productivity and product quality， which benefits both suppliers of developing countries and multinational companies. Technical progress focusing on function upgrade， however， is impeded by multinational companies by all means because it improves developing countries’ terms of trade and constitutes a direct competition threat against them.
The fourth mechani is to improve the market position and strive to improve the terms of trade. Improving the market position requires an increase in industrial concentration and an improvement in technology， marketing networks， brands and the supply chain. Labor-intensive industries are mostly highly decentralized， while more centralized industries are those which possess an obvious economy of scale and a high level of technological intensity. Chinese enterprises lag behind in terms of high-end parts of the global value chain， such as R&D， design， marketing， supply chain management and brands. Excessive concentration in processing and production and hey reliance on the processing trade lead to excessive competition to their disadvantage during the global division of labor. Conversely， enterprises which possess strong technological capabilities he greater bargaining power.
2. Sticking to Static Comparative Advantage Might Lock in the Status in the Labor Division System， Which Can Hardly Sustain National Economic Growth
Although leveraging comparative advantages can improve the productivity （the labor division efficiency） and promote economic growth， it does not share the benefits of labor division， or the trade benefits. Sticking to static comparative advantages will unoidably cause a lock-in effect. China’s reinforcement of labor-intensive sectors slows down residential income growth， imposes heier pres论文导读：ialTermsofTradeAreSubstantiallyOvervaluedMoststudiesarguethatalthoughChina’sNBTThasdeteriorated，theincometermsoftradeandfactorialtermsoftradeheimprovedgreatly.Ourstudieindthatimprovementintheincometermsoftradeisseriouslyovervalued，andimprovementin
sure on energy， resources and the environment and aggrates trade frictions with other countries. Obviously， a reinforcement of labor-intensive sectors can hardly sustain the whole economy.[3]2.1 Analysis of Characteristics of China’s Participation into Global Labor Division by Leveraging its Comparative Advantages
By leveraging comparative advantages， China has participated in the global labor division and achieved rapid foreign trade and economic growth since the reform and opening-up. However， such growth is basically based on quantity expansion； the export structure is to a considerable extent fossiled in labor-intensive and resource-cosuming processing and production. Upgrade of the industrial and export structure is mostly nominal， without reaching the height as being measured by traditional standards. China’s major exports he been tranormed from textiles and garments to electrical and mechanical products3. However， as the global labor division has been shifted from being inter-industry and inter-sector to being intra-industry and intra-product， China is still sitting at the low end of the global value chain. China still engages in processing and production. It lags behind， or lacks entirely， high value-added parts including key equipment， key technologies， brands， marketing and supply chain management. Its so-called technology-intensive products and high-tech products are merely the outcome of undertaking labor-intensive assembling. Therefore， upgrade of the industrial structure is only nominal or partial. Looking from the real technical content， real returns and the cost， there is a great deviation between the real and nominal upgrade. China’s economic growth， especially foreign trade growth， pays a huge cost. Benefits shared from rapid trade growth under nominal ugrade of the industrial structure are limited.
2.2 NBTT Continues to Deteriorate， and Income Terms of Trade and Factorial Terms of Trade Are Substantially Overvalued
Most studies argue that although China’s NBTT has deteriorated， the income terms of trade and factorial terms of trade he improved greatly. Our studies find that improvement in the income terms of trade is seriously overvalued， and improvement in the factorial terms of trade is an erroneous judgment. China’s export income growth is completely attributed to quantity expansion， and decline of the export price is not compensated by the rising productivity.
First， NBTT continues to deteriorate， and the relative purchasing power of unit exports versus imports declines substantially. Due to restrictions of the international population flow as well as the different market status between developing and developed countr论文导读：exception.Third，energy，resourceandenvironmentalconstraintsimposegreatpressureonsustainabledevelopment.Generalprocessingandproductionconsumeoreenergyandresourcesandcauseoreenvironmentalpollutionthanhigh-endpartsoftheindustrialchain.Afossilizedroleasaproce
ies， the deterioration of developing countries’ NBTT extends from previous primary products to finished products now despite their wider participation into global labor division. The same is true of China. Although finished products account for 95% of China’s exports， its NBTT index of 2009 fell by 32.1% compared to 1980， showing China’s relative purchasing power of unit exports in 2009 only equal to 67.9% of that in 1980.[3][4]摘自：本科毕业论文模板www.7ctime.com
First， workers’ wages grow slowly. Cheap factors-driven economic growth and price competition lead countries to a path dependence regarding technological progress， which is always oriented at reducing the cost. This determines that exporting industries that stick to established comparative advantages he limited income growth space4 and scanty returns. Data indicate the higher the export rate in Chinese industries， the lower their profit rate. In industries whose export rate is above 40%， the profit rate is less than 5%. The rate of return on total assets and sales profit rate of communication equipment， computer and other electronic equipment industry are even lower than that of textiles and garments.5
Second is increasing trade frictions and worsening trade environment. Chinese products occupy the overseas market with “all profits， but quick returns” tactics， for which many countries initiate anti-dumping and anti-subsidy petitions against China. The number of overseas trade remedy investigations against China has been the world’s biggest for 16 consecutive years. Trade frictions with China he further increased， especially with the strengthening of foreign trade protectioni following the outbreak of the global financial crisis. Once an affirmative determination is made on antidumping and anti-subsidy petitions， Chinese enterprises will withdraw from the country concerned without exception.
Third， energy， resource and environmental constraints impose great pressure on sustainable development. General processing and production consumes more energy and resources and causes more environmental pollution than high-end parts of the industrial chain. A fossilized role as a processer or producer further aggrates China’s energy， resource and environmental pressure and burdens China’s industrialization with expensive energy and raw materials. Energy sing and emission reduction is in the national spotlight and environmental pressure remains a prominent issue.
Finally， China is faced with the pressure of industrial traner and tranormation due to rapidly rising costs. The price of energy and raw materials and labor costs are rising rapidly，论文导读：mando摘自：本科毕业论文评语www.7ctime.compening-up，Chinahaullybenefitedfromits“demographicdividend.”However，startingfromtheendoftheTwelfthFiveYearplan（2011-2015），China’slaborsupplywillcometoaninflectionpointandthedemographicdividendwillwearoff.Aorecast
and the Renminbi is constantly appreciating. Concurrently， the industrialization level of other developing countries such as 源于：大学毕业论文格式www.7ctime.com
Vietnam， Indonesia and India is improving rapidly. They are becoming strong rivals to China’s export market. Meanwhile， social conflicts triggered by low labor remuneration are increasing， showing the production model featuring cheap labor and price competition has come to an end.[3][4][5][6]In addition， fossilizing comparative advantages and reinforcing the price competition model discourage differentiation and servicisation. As a result， high value-added， service-oriented parts including R&D， design marketing and brands are missing. This in turn restricts development of producer services and throws the economy into the “middle-income trap.”
3. Trend of China’s Dynamic Comparative Advantages
3.1 China’s Factors with Comparative Advantages Change Significantly
As China industrializes， its comparative advantages vary at different stages. Specifically， as the advantage of the population size diminishes， advantages in the population quality， human capital， capital accumulation capabilities， technological capabilities， business and investment management capabilities as well as infrastructures are improving.
（1）The advantage in the population size is diminishing， but the labor quality and human capitals are growing into advantages. Since the reform and o摘自：本科毕业论文评语www.7ctime.com
pening-up， China has fully benefited from its “demographic dividend.” However， starting from the end of the Twelfth Five Year plan （2011-2015）， China’s labor supply will come to an inflection point and the demographic dividend will wear off. As forecast by the United Nations， the absolute size of China’s working-age population （from the age of 15 to 64） which is on the rise now will start to decline each year from 2015. Additionally， the population’s changing value is another factor6. The “shortage of labor” occurring in the Pearl River Delta and Yangtze River Delta shows that the structure of labor supply and demand is changing. Meanwhile， China’s labor quality has improved significantly. For instance， the number of undergraduates for every 100，000 people increased from 439 in 2000 to 2，145 in 2009.
（2）The capital accumulation capability and enterprises’ business management capability he improved significantly and the advantage in the market scale has become prominent. In the past， China had meager funds， but now it possesses relatively surplus funds. It is no论文导读：（3）Technologicalcapabilitiesimprovesignifica
w the world’s second largest creditor country and the biggest net capital exporter. Also， equipment per worker has increased substantially. The per capita net fixed-assets of enterprises above the designated size increased from RMB8，000 in 1980 to RMB 221，300 in 2010. Finally， the ratio of capital-intensive industries increases rapidly and the capital-output ratio has risen substantially. Thanks to growing capital accumulation capabilities and the labor income， China’s market scale expands significantly with its economic aggregate and import scale being second only to the US. Meanwhile， Chinese enterprises’ business and investment management capabilities and the capability of developing supporting industries are growing rapidly. For instance， the Pearl River Delta and Yangtze River Delta he gathered together the world’s biggest electronic information industrial clusters with the most complete set of supporting industries.[3][4][5][6][7]（3）Technological capabilities improve significantly， displaying apparent advantages among developing countries despite a gap with developed countries. China has made significant progress. It has engaged in rapid industrialization and large-scale capital input and accumulation of human capital. China has implemented a national innovation strategy and increased input in education， training and R&D. At the same time， China’s technological and innovation capabilities he improved rapidly. Apart from afore-mentioned higher population quality， the percentage of R&D expense in GDP increased from 0.9% in 2000 to 1.76% in 2010. The number of China’s patents has also rapidly increased. Technical innovation in Chinese industries has met the conditions of market demands and supply. From the demand perspective， as the cost of factors rises， it becomes imperative for enterprises to increase technical contents and the added value through innovation. From the supply perspective， growing funds accumulation capabilities， mass production capabilities as well as the capability of developing supporting industries are conducive to technical breakthroughs and industrialization of products that are sophisticated in components and technologies.
（4） Improved infrastructure is now a comparative advantage. China’s transportation infrastructure has improved rapidly both in terms of the scale and quality. Between 1990 and 2010， China’s lengths of railway， highway and civil iation capacity he increased by 2.1%， 7.2% and 8.4论文导读：firstcategoryincludesindustriespossessingsteadycomparativeadvantages，mainlylabor-intensiveindustries.Forexample，clothingandotherfiberproducts，featherandleatherproducts，textiles，stationeryandsportinggoods，woodcraftsandbamboo，rattan，palm，andstrawproducts，furniture，
%， respectively， and the length of pipeline transportation has increased by 8.0% annually on erage. Meanwhile， the quality of transportation infrastructure has improved. The percentage of double-track railway in national railways in operation increased from 24.4% in 1990 to 44.8% in 2010， and the percentage of the length of high-grade highways increased from 72.1% to 82.4%. The informationization level has improved even faster， with the telephone penetration rate rising from 0.4% in 1978 to 86.4% in 2010 and the Internet penetration rate reaching 34.3% in 2010. Although China’s infrastructures still lag behind developed countries， they are far superior to those in India and Brazil.
3.2 Evolution of Chinese Industries Possessing Comparative Advantages
As factors with comparative advantage change， Chinese industries possessing comparative advantages he also changed to some extent. Depending on comparative advantages possessed， Chinese industries can be classified into the following categories：[3][4][5][6][7][8]源于：科研方法与论文写作www.7ctime.com
The first category includes industries possessing steady comparative advantages， mainly labor-intensive industries. For example， clothing and other fiber products， feather and leather products， textiles， stationery and sporting goods， woodcrafts and bamboo， rattan， palm， and straw products， furniture， plastic products and metal products. These industries remain China’s advantageous industries， but their factors with comparative advantages are changing remarkably. Take the textiles industry for instance， due to the rising cost of labor and raw materials， its cost price advantage has declined； however， thanks to accumulation of technologies， improved R&D and innovation， improved capability of supplying medium- and high-grade fabrics and growing manufacturing capacity of equipment， more value-added products featuring diversified functions， personalization and fashionable design are produced， enabling textiles to maintain strong comparative advantages for now. In 2010， the output value of new products in textiles and gar源于：职称论文www.7ctime.com
ment enterprises above the designated size was 1.5 times that of 2005. A considerable part of medium- and high-grade fiber materials and fabrics which were imported in the past are now supplied domestically or even exported.
Second are industries whose comparative disadvantages he already turned into论文导读：ds，productdiversityandservicesinordertobuildadifferentiatedcompetitiveedge.Enterprisesshouldestablishoverseaarketingnetworksandthegovernmentshouldgrantsupportinfinancingandcustomormalities.Second，forindustriespossessingdynamiccomparativeadvantagesthatare
or are on the verge of turning into comparative advantages. These industries he a medium level of factor intensity. Those whose comparative disadvantages he already turned into comparative advantages he a medium level of technology and labor intensity. These industries include manufacturers of electronic and telecommunication equipment， instrument and culture & office equipment， electrical machinery and equipment， and rubber products. For industries whose comparative disadvantages are on the verge of turning into comparative advantages， some he a medium level of technology and labor intensity and some he a medium level of capital intensity. The former type includes industries such as standard machinery， special-purpose equipment and transportation equipment. They he possessed strong advantages in management， supporting industries， industrial cluster and production networks and enjoy a growing export status. The latter type includes industries such as chemical fiber and ferrous metal elting and rolling processing， which through “learning by doing” he accumulated experience in processing craft， process， investment and business management and he made rapid progress in R&D and manufacturing of related equipment.[3][4][5][6][7][8][9]摘自：毕业论文格式范文www.7ctime.com
（3） Classify and diversify industrial policies in accordance with industries’ changing comparative advantages. Cultivating industries’ dynamic comparative advantages is not simply to shift supportive policies from one industry to anther. Instead， it requires the government to cultivate industries possessing dynamic comparative advantages and to develop factors with comparative advantage based on the growth cycle of different industries and their changing comparative advantages.
First， for industries with established comparative advantages such as textiles and garments and other labor-intensive industries， the priority is to improve their R&D， design， brands， product diversity and services in order to build a differentiated competitive edge. Enterprises should establish overseas marketing networks and the government should grant support in financing and customs formalities.
Second， for industries possessing dynamic comparative advantages that are becoming China’s key export industries， supportive policies should focus on improving their productivity， red论文导读：（4）Strengthenbrandbuildingandestablishasystemsupportingproprietarybrands.First，thegovernmentshouldencourageenterprisestocreatetop源于：论文封
ucing their export trade cost and developing overseas markets. Communication equipment， electronics， and electrical and mechanical industry he become major export industries， so priority is to support their R&D， design and domestic production of critical equipment and components so that their status in the global labor division system is upgraded. For standard machinery， special-purpose machinery， iron&steel and fiber industry whose international competitiveness has potential for f摘自：毕业论文结论怎么写www.7ctime.com
urther improvement， supportive policies should be unveiled to upgrade their products and encourage them to develop overseas markets on the precondition of improving environmental standards and reinforcing energy sing and emission reduction.
Third， for strategically important industries which he always been at comparative disadvantages such as medical and pharmaceutical products， high-end equipment and critical components， critical equipment and materials， there should be moderate market protection and funds support. Enterprises should improve their R&D， design and supply chain management. In addition， strategic entry into oversea markets should be encouraged to establish a market structure that caters to the welfare of Chinese people. For petroleum refining， paper-making and paper products as well as ferrous metal elting and rolling processing， enterprises should strengthen technical innovation， develop new products， improve product quality and reinforce energy sing and emission reduction to improve their international competitiveness.[3][4][5][6][7][8][9][10][11]（4） Strengthen brand building and establish a system supporting proprietary brands. First， the government should encourage enterprises to create top源于：论文封面格式www.7ctime.com
brands through technological progress and improved quality， perfect the quality control system， standardization system and the metrology testing system and implement a strategy of revitalizing enterprises through famous brands. Second， the government should initiate the “national branding project” and improve its mechani of evaluating famous brands. Third， the government should increase society’s consciousness of protecting brands through increased publicity so as to论文导读：utdatedequipment.（6）DevelopamarketstructureofworkablecompetitiontoimproveChina’arketposition.Chinashouldembracedifferentstrategiesinternallyandexternallytopromoteworkablecompetition.Externally，Chinashouldbreakthemonopolyofmultinationalcompanies，encouragestr
create a forable environment for development of proprietary brands. The government can also support enterprises possessing proprietary brands through government procurement， interest subsidies and credit support. Fourth， hostile takeover by foreign enterprises should be prevented during joint-venture partnerships and merger and acquisition of domestic enterprises and brands. Finally， enterprises should be encouraged to establish logistics and distribution centers and other marketing networks abroad.
（5） Improve industrial tranormation ability and reduce tranormation cost. Given the high cost of tranorming industrial structure caused by factors such as asset specificity， time and expertise needed to cultivate laborers’ skills， the government should unveil forable policies aimed at reducing this cost. On one hand， the government should improve the environmental and technological admission standards and accelerate elimination of backward production. On the other hand， for industries of overcapacities commonly agreed by the government and enterprises， the government can lend support in promoting restructuring， debt relief， reemployment training， and subsidizing enterprises for elimination of outdated equipment.
（6） Develop a market structure of workable competition to improve China’s market position. China should embrace different strategies internally and externally to promote workable competition. Externally， China should break the monopoly of multinational companies， encourage strategic entry and increase industrial concentration to build capabilities of contending with multinational companies. Internally， China should develop an economy of scale and promote moderate competition. First， China should advance the reform in service industries including banking， insurance， railway， civil iation， postal and telecommunication， and loosen the control over market access and equity ratio for private enterprises. Second， annexation and reorganization should be advanced to achieve centralization and conglomeration， which will serve to improve China’s market position. For industries with a remarkable economy of scale such as iron & steel， petrifaction， automobiles and shipping， the government should encourage large leading enterprises to carry forward transregional annexation and reorganization. For emerging industries such as new energy， electronic information and biomedicine， the focus should be to build strategic alliances among enterprises of different sizes for R&D， production， market and talent cultivation. For equipment manufacturing， some large conglomerates capable of designing and providing a complete set of products and systematic services should be fostered. Third， an innovative milieu should be created， and specialized markets and platforms serving technical innovation should be developed to promote expansion of all and medium-sized enterprises. Finally， examination of mergers and acquisitions by foreign enterprises should be str论文导读：ialtranertoprolongthelifecycleofindustries.Thisrequiresthegovernmenttoincreaseinputininfrastructureconstructionsoastoreducelogisticscostsincentralandwesternregionsandbuildastrongerbasisofundertakingindustriestobetranerredfromeasternregions.Again，theg
ict and the quality of utilizing foreign funds should be improved to prevent multinational companies from controlling China’s leading manufacturing enterprises and key service industries.[3][4][5][6][7][8][9][10][11][12]（7） Emphasize coordination among industrial policies， trade policies and regional policies. The focus of foreign trade policies should shift from promoting export growth to tranorming foreign trade development model. Export rebates and policies delaying normalization of the factor price aiming at alleviating problems like export slump and declining profitability of some enterprises should not go against tranormation of the development model. Second， differentiated competition strategies should be embraced according to the development level of trade partners. For developing countries， China should expand labor-intensive exports with proprietary brands and exports with a medium level of factor intensity. In addition， overseas economic and trade cooperation zones can be established through state-level cooperation so as to traner Chinese industries whose comparative advantages are declining. As for trade with developed countries， the product structure should be tranormed， exports should be diversified and the price competition model should be changed. Third， following the life cycle of products and leveraging regional development disparities， the government should push ahead with industrial traner to prolong the life cycle of industries. This requires the government to increase input in infrastructure construction so as to reduce logistics costs in central and western regions and build a stronger basis of undertaking industries to be tranerred from eastern regions. Again， the government should encourage enterprises to be moved out to less developed regions to apply leading technologies to improve comprehensive competitiveness and sustainability of economic growth there， and prevent traner of backward production capacities.
（8） Pay attention to methodologies to reduce trade frictions. Developing strategic emerging industries and cultivating dynamic advantages should be supported by policies complying with rules of the World Trade Or论文导读：talloworexpandedreproduction.References：KomiyaRyūtarō.，etal.1988.JapaneseIndustrialPolicy.Beijing：InternationalCulturePublishingCorporation（inChinese）：279.
ganization. Functional policies supporting vocational education and training， R&D， platform construction， R&D of generic technologies， network construction and subsidies on patent application should be prioritized. Before further appreciation of Renminbi， the government should first improve the price formation mechani in the factor market to rationalize the domestic price of various factors and allow it to reflect their real value. Again， the government should improve the policy of attracting investment to ensure that the cost of factors such as land， energy and the environment is rationalized. In particular， wages and welfare of workers should be kept at a level that allows for expanded reproduction.
References：
Komiya Ryūtarō.， et al.1988. Japanese Industrial Policy. Beijing： International Culture Publishing Corporation （in Chinese）： 279.[3][4][5][6][7][8][9][10][11][12][13]