Industrial Basic Capacity Research: Theory and Measurement

This paper establishes a theoretical framework for understanding the connotations of industrial basic capacity. It employs models from economic growth theory to derive indices for assessing industrial basic capacity and exploring the economic correlations among its influencing factors. Additionally, it measures the industrial basic capacity indices of 17 subsectors across 9 major industrial countries from 2000 to 2020 using OECD data. The findings reveal that from 2000 to 2020, the Chinese manufacturing industry has surpassed the United States, becoming the global leader. Specifically, within the 17 subsectors, 9 are globally ranked first, with 7 nearing advanced levels, and only 1 facing relative backwardness. Chinese manufacturing industry’s enhanced basic capacity is attributed to advantages in cost competitiveness and scale. However, significant disparities persist in technological input and industrial linkages with advanced nations. The decline in basic capacity among developed countries stems primarily from diminished value chain profitability due to inadequate investment. Sustainable improvement in industry basic capacity necessitates concurrent advancements in value chain profitability, fixed asset investment, technological levels, industrial linkages, and market scale. Overreliance on cost advantages or advanced technology poses substitution risks. Moreover, this paper underscores the limitations of exclusively relying on current data to assess global industrial basic capacity, advocating for a greater historical perspective. To strengthen the Chinese manufacturing industrial basic capacity within the global value chain, the Chinese manufacturing industry must enhance technological inputs, reduce the operational costs of enterprises, and elevate the degree of openness.