Manufacture Upgrading and Factor Reliance in Yangtze River Delta

Abstract

This paper constructs a spot competition model illustrating manufacture upgrade in Yangtze River Delta, using Michael Porter's Diamond model from competitive advantage of nation for reference, and reveals that the manufacture upgrade in Yangtze River Delta, especially for the development and the evolution of both labor-intensive and capital-intensive industries, actually is this outcome that various main bodies of economic development, namely enterprises and regional governments, considering their own competition power, make the choices of strategies of competition and development and implement them, the performance of which could be measured by the degree of factor dependence and the technological change. On the basis of the above, this paper makes relative econometric analysis concerning manufacture upgrade and factor dependence, and the outcome turns out that the manufacture in Yangtze River Delta is experiencing a transition from resource-oriented stage to investment-oriented stage, and capital is becoming the most important production factor in place of labor. The level of heavy industrialization and deep processing in Yangtze River Delta is increasing. Since 1990, the rise of income level promoted the demand, and the simple production and investment could bring higher profits to enterprises, consequently which has been a weak incentive to improve technology. For these regional enterprises in Yangtze River Delta, there is still a long way to go.