Abstract: This paper uses four-digit export value data of 350 manufacturing products from 94 countries between 2001 and 2023, to empirically investigate the impacts and interactions of production capability endowment and product complexity on the transformation and upgrading of China's manufacturing industry. The results show that: The transformation and upgrading of China's manufacturing industry follow the path of comparative advantage. The increase in product complexity significantly inhibits the transformation and upgrading of disadvantaged products and cannot effectively prevent the decline of existing advantageous products. Production capability endowment and product complexity interact to influence the transformation and upgrading of China's manufacturing industry. The former has positive effects in both promoting the successful transformation of disadvantaged products and preventing the decline of advantageous products, whereas the effects of the latter are not significant. As a result, efforts should focus not only on upgrading towards high-end manufacturing and high-complexity products but also on abandoning the mistaken notion of categorizing industries as “high” or “low” and products as “noble” or “inferior”, thus ensuring its integrity, advancement, security.