Based on the perspective of international vertical specialization,this paper creates a set of new approach to estimating the domestic technological sophistication(DTS)of export goods.Deducting the values of imported intermediate inputs contained in export goods,this paper conducts an estimation and analysis of the DTS of China’s industrial finished goods for export between 2002 and 2007 at the national,industrial and regional levels.Results of our study indicate that:(1) the DTS of China’s export goods demonstrates an overall tendency of steady increase and its evolving pattern demonstrates distinctive differences across sectors;(2) the DTS is on the increase for natural resources sectors,low-technology sectors,medium-technology sectors and certain high-technology sectors including transportation equipment manufacturing,general and dedicated equipment manufacturing,and electrical machinery and apparatus manufacturing while the DTS is on the significant decrease for electronic and communication equipment manufacturing and instruments,meters and other metering devices manufacturing;and(3) provinces with relatively high average values of DTS of export goods are primarily located in China’s eastern region while provinces with significant DTS growth rates are mainly located in China’s central and western regions and the gaps of DTS of export goods among China’s eastern,central and western regions have a tendency of convergence. Based on the perspective of international vertical specialization, this paper creates a set of new approach to estimating the domestic technological sophistication (DTS) of export goods. Deducting the values ​​of imported intermediate inputs contained in export goods, this paper conducts an estimation and analysis of the DTS of China’s industrial finished goods for export between 2002 and 2007 at the national, industrial and regional levels. Results of our study that that: (1) the DTS of China’s export goods demonstrates an overall tendency of steady increase and its evolving pattern demonstrates distinctive differences across sectors; (2) the DTS is on the increase for natural resources sectors, low-technology sectors, medium-technology sectors and certain high-technology sectors including transportation equipment manufacturing, general and dedicated equipment manufacturing, and electrical machinery and apparatus manufacturing while the DTS is on the significant decrease for electronic and commu nication equipment manufacturing and instruments, meters and other metering devices manufacturing; and (3) provinces with relatively high average values ​​of DTS of export goods are primarily located in China’s eastern region while provinces with significant DTS growth rates are mainly located in China’s central and western regions and the gaps of DTS of export goods among China’s eastern, central and western regions have a tendency of convergence.