ABSTRACT
This chapter aims to construct the theoretical foundation and analytical framework for how GVC digitalization influences the high-quality development of China's manufacturing industry. First, it reviews three supporting theories: The theory of the digital economy reveals data as a new factor of production and the paradigm shift in economic theory driven by digital technology; the theory of international division of labor traces its evolution from classical comparative advantage to GVCs, providing a basis for understanding the restructuring of division of labor patterns induced by digital technology; and the theory of international trade costs provides the theoretical basis for analyzing how digitalization reduces transaction costs. Building on this, the chapter focuses on constructing the theoretical mechanisms through which GVC digitalization promotes high-quality manufacturing development via three channels: (1) optimizing manufacturing operational efficiency by reducing transaction costs such as information search, contract execution, and internal management; (2) promoting technological innovation by alleviating information asymmetry and financing constraints, and enhancing industry-university-research collaboration and human capital; and (3) improving the efficiency of resource allocation for factors such as labor, capital, R&D, and producer services. This theoretical mechanism provides a clear logical pathway and analytical dimensions for the subsequent empirical testing.
