China’s industries have changed form rapid development stage to competition stage in present time The study on industrial competitiveness is of great theoretical and practical importance This paper analyzes the connotation of industrial competitiveness, which is defined as the industries’ capability to exploit and hold the market compared with their counterparts under free trade market situation Industrial competitiveness is the ligament between national competitiveness and enterprise competitiveness Comparative advantage (which emphasizes the resourses endowment, capital and labor force) and competitive advantage (which emphasizes the industries’ market performance) are the analysis bases for industrial competitiveness research Comparative advantage is the foundation for competitive advantages while competitive advantage can enhance comparative advantage in return The factors affecting the industrial competitiveness, which include resources endowment, location factors, science and technology, industrial organization,and policy environments, are briefly analyzed This paper also makes exploration on industrial competitiveness evaluation system There are many comprehensive evaluation systems for industrial competitiveness Locational quotient is an effective way to assess industrial competitiveness by reflecting the industry’s specialization,although it is brevity in calculation By adding the industry’s different locational quotients together according to their weight, a new comprehensive industrial competitiveness evaluation system is constructed Then the industrial competitiveness of manufactures in eastern coastal provinces and municipalities in China is evaluated according to the locational quotient based evaluation system.