Abstract: The industrial upgrading in the context of the new era will transform from the“hyper materialism”to“balanced materialism”, paying more attention to the weighing and balancing of comprehensive costs. The so-called comprehensive costs refer to the total costs of all the factors used in the process of industrial development, mainly including production costs, transaction costs, environmental costs and inter-generational costs at present. The upgrading of factor structure, the total comprehensive cost and its structural changes will determine the industrial comparative advantages of a country or a region, and the industrial comparative advantages will determine the basic direction of industrial upgrading of a country or a region. Therefore, China should make efforts to promote its industrial structure gradually transforming to the emerging industries, such as contract intensive industries, environment-friendly industries and resource-saving industries under the synergistic effect between the market and the government, and complete the replacement, transformation or upgrading of the traditional industries by the emerging industries, so as to realize the organic unity of economic development, industrial upgrading, institutional innovation, environmental protection and sustainable development.

Key words: industrial upgrading, comprehensive costs, comparative advantages