Service outsourcing:A new way to shrink regional gaps

International outsourcing is an important way to realize intra-product division of labor. China’s industrial upgrade and policy efforts directed at outsourcing are not entirely endogenous but have a dependent path prone to be captured and locked at the low end of the global value chain by developed countries at the chain’s high end. In light of the stage and reality of China’s economic development, we should not only upgrade manufacturing outsourcing but also grasp service outsourcing opportunities. We should implement a strategy of coordinated development of manufacturing and service outsourcing rather than hastily transforming China from a "factory of the world" into an "office of the world." Balancing services with manufacturing and linking the global value chain with the domestic value chain is the best tool to address the problem of China’s uneven regional development and establish a multi-tiered modern industrial system.