Abstract: This paper distinguishes the sourcing and function channels of international knowledge spillovers, and puts forward corresponding measurement methods. To verify the impact of international knowledge spillovers on China′s industrial upgrading, this paper introduces three kinds of spatial weighting matrices, and uses 2003-2014 dynamic panel space Durbin model. The research shows that, on the whole, the spillover effect of FDI channel is greater than that of the import trade channel; the inter-industry knowledge spillover has a promoting effect, however, the knowledge spillover within industry has the extrude effect; and the backward correlation effect of vertical spillover is greater than the forward correlation effect. According to the types of sub-industry, knowledge spillovers from international trade channels have a positive effect on China′s existing comparative advantage industries; knowledge spillovers from both international trade and international investment channels have played a role in the process of industrial upgrading during the study period; the backward correlation effect of international investment channel knowledge spillovers has a significant promoting role to potential advantages industries in China. In conclusion, except FDI channel, the effects of international knowledge spillovers on the industrial upgrading in China are not ideal. Some industries in China are trapped in the “demand-lock” of FDI. Therefore, facing a new round of international protectionism, China still needs to explore the inter-industry knowledge spillover effect through the channel of foreign direct investment. The spillover effect of FDI conduces to the accumulation of industrial knowledge capital in China, and makes up for the insufficient of inter-industry spillover effect of China′s R&D capital.

Key words: international knowledge spillovers, industrial upgrading, spatial panel