Upgrading of China's Manufacturing Industry: Two-sector Analysis Based on the Facilitation of Producer Services

In this paper, the related researches on the relationship between producer services and manufacturing industry were reviewed, and two-sector model of producer service sector and manufacturing industry sector was built with producer service serving as the endogenous variable of sustainable growth of the growth rate of manufacturing industry based on endogenous growth theory and Feder's two-sector model, in order to analyze the influence of producer service on the upgrading of manufacturing industry. It is also suggested that it is necessary for China to use producer service to enhance competitiveness of manufacturing industry in light of the causes of the low level of China's manufacturing industry.