How Effective is Manufacturing Transformation and Upgrading? A Case Study of China

Abstract

Owing to internal worries and external challenges, the manufacturing transformation and upgrading (MTU) has become the top priority for China to achieve sustainable economic development. Many policies have been issued to promote the MTU. To evaluate the effectiveness of China's MTU, this study defines the MTU’s connotation and constructs a five-dimensional evaluation system, including power conversion, structure optimization, industrial benefit, ecological benefit, and social contribution. With the compound correlation entropy matter element model and data of eight representative manufacturing countries and thirty-one provinces of China from 2001 to 2015, the effectiveness of China's MTU is analyzed from aspects of development stages, international comparison, and provincial comparison. Results show that China's MTU has experienced three stages - inhibition period, slow development period, and rapid development period. Although its effectiveness has been greatly improved, it is far from success. There is still a large gap in MTU between China and other representative manufacturing countries. Shortcomings of China's MTU can be divided into three types. Among them, defects of slow green manufacturing transformation and low added value of products are particularly serious. Besides, thirty-one provinces of China can be divided into five echelons according to the effectiveness of MTU.