Abstract:The embedding of productive services has an important impact on the competitiveness of manufacturing. This paper discusses the internal relationship between producer services and manufacturing, and the ways in which producer services are embedded in manufacturing—structural embedding, relational embedding and virtual embedding. Based on the panel data of 31 provinces and cities in China from 2008 to 2017, combined with the spatial weight matrix of geographical adjacency distance constructed, this paper applies the spatial panel econometric model to empirically analyze the influence of three ways of embedding producer services into manufacturing industry on manufacturing industry. Researches show that: The different ways in which productive services are embedded in manufacturing have different effects on the competitiveness of manufacturing. Among them, the virtual embedding represented by information transmission and computer service plays an important role in driving the development of manufacturing industry. Scientific research and technology services, which represent structural embedding, do not have a significant impact on manufacturing in the short term. The relational embedding represented by business services, financial services, wholesale and retail, transportation and warehousing services has a significant positive impact on the development of manufacturing industry.