Abstract: Faced with the increasingly fierce international market competition, it is urgently needed for domestic manufacturing industries with low factor cost comparative advantages to carry out industrial chain integration and structural upgrading, since the domestic industrial chain is locked at the lower end by the strategic isolating mechanisms of the transnational corporations. Aiming at the value chain upgrading and industrial structure upgrading of the manufacturing industries, this paper tries to discuss the connotation, influencing factors and mechanism of the upgrading of the manufacturing industries in terms of value chains and innovation chains. Meanwhile, it constructs an evaluation model to conduct an empirical analysis of the upgrading capacity and upgrading performance of the manufacturing industry in the mid-eastern China. The research result shows that there are three ways for manufacturing enterprises to promote the changing and upgrading of the domestic manufacturing industry in the embedding link of the global value chain, namely, deep embedding in the original value chain, up or down stream embedding in the value chain, and the new value chain embedding. The upgrading capacity of manufacturing industry at a certain area is closely related to its industrial resources input, while the upgrading performance is mainly affected by industrial structure and resource use efficiency.

Key words: global value chain; manufacturing industry upgrading; embedded mode; mid-eastern China