Abstract: Changes in domestic and international economic environment have slowed down China's exports sharply and the long-term low-end manufacturing exports have increased the export pressure, so the export upgrading becomes imminent. This paper attempts to analyze the intermediate goods and capital goods imports on China's exports upgrading from the perspective of the structure of imports. Through the establishment of theoretical models, it also proposes a theoretical hypothesis that the intermediate goods and capital goods imports have an impact on China's exports, and makes an empirical test to the hypothesis proposed by use of the import and export data for 1995-2010. The empirical results show that the imports of the capital goods and intermediate goods have a significant positive effect on the upgrading of China's exports.

Key words: intermediate goods, capital goods, export upgrading, theoretical hypothesis