Asymmetric Game Analysis of China's Equipment Manufacturing Industry Hollowing-Out

With the rapid development of global economic integration, industrial hollowing-out problem has been paid much attention by foreign and domestic scholars. Based on the current situation of China's equipment manufacturing industry, the asymmetric game model is created in this paper which integrates the strong multinational companies and the weak Chinese local companies into a united system. Considering the influence of two main factors affecting unit production cost, technology and production factor cost, importance is attached on analyzing equilibrium solutions of the asymmetric game between multinational company and Chinese local company in R&D stage and processing stage of global value chain, so as to explain the formation mechanism of China's equipment manufacturing industry hollowing-out. Suggestions for breaking through the hollowing-out obstacle are put forward accordingly.