Abstract: This paper links the dynamic comparative advantage in china's manufacturing industry sector with capital-labor factor substitution and technical progress to explain the transmission mechanism of factor substitution growth effect. In view of this, we take 29 manufacturing industry sectors in China from 2001 to 2014 as an example and get the following conclusions after theoretical derivation and empirical survey. Firstly, the improvement of factor elasticity of substitution can realize dynamic comparative advantage changes by accelerating capital accumulation. Secondly, both innovation and imitation technology progress can make the transformation of dynamic comparative advantages. Thirdly, the above two kinds of technological progress are replace each other for the marginal effect of dynamic comparative advantage. The conclusion are still reliable after considering endogenous and robustness. Therefore, we should focus on the capital accumulation effect of factor substitution and improve the change of technological progress to productivity in the future. On this basis we should optimize the resources distribution of factors and select appropriate technology progress path to realize dynamic comparative advantage changes.

Key words: capital-Labor factor substitution, technical progress, dynamic comparative sdvantage, china's manufacturing industry