Abstract: With the continuous deepening of the global value chain division system, the global value chain embedding has exerted great impact on the rationalization of China's industrial structure. The theoretical analysis indicates that the global value chain embedding has a human resource reallocation effect and a technology diffusion effect on the rationalization of industrial structure. On this basis, by combining China Customs database and China Industrial Firms database from 2006 to 2013, this paper calculates the embedding degree in global value chains of 70 large and medium-sized cities. The results of the empirical test show that the global value chain embedding has significantly promoted the rationalization of China's industrial structure, and this conclusion is also tenable in the sub-samples of different regions and different cities. The findings of further testing on the mechanism show that the global value chain embedding has improved the rationalization of industrial structure through promotion of human capital reallocation and technology diffusion. Hence, to promote the embedding degree in global value chain is of great importance in the promotion of the rationalization of China's industrial structure.

Key words: industrial structure rationalization, global value chain embedding, human capital, technology progress