Industrial structure upgrading and technological capability in China – based on the perspective of industrial structure depth

Abstract

This paper focuses on measuring the status of industrial structure upgrading in China using a scientific and reasonable approach. We introduce a novel metric called industrial structure depth (ISD), which incorporates inter-industry proportional relationships and intra-industry technological capability, surpassing traditional indicators. Through ISD, we comprehensively assessed industrial structure upgrading across thirty provinces, sub-industries, and the national level in China from 2002 to 2022. The findings reveal a general rise in ISD at the provincial and national levels, followed by a subsequent decline. The shift in the gradient distribution of ISD among provinces is notable, with rapid development observed in certain central provinces. From the perspective of industry categories, manufacturing emerges as a significant influencer of China's overall ISD fluctuations. Furthermore, we dissect the ISD into the domestic intermediate goods technology-driven aspect and the production process technology-driven aspect, which allows for a detailed analysis of the factors driving changes in China's industrial structure upgrading. Overall, this paper sheds light on the crucial role of technological capability in promoting China's industrial structure upgrading and provides insights into the dynamics of industrial structure upgrading fluctuations across different stages.