The traditional manufacturing industry of China has begun to transform and upgrade against the backdrop of China's dual-circulation development pattern. Based on relevant data from 2015 to 2021, an evaluation index system to assess the impact of outward foreign direct investment (OFDI) on the transformation and upgrading of China's manufacturing industry was conducted. The result show that OFDI positively promotes high-quality manufacturing development, with a mediating effect of reverse technology spillover. Particularly, OFDI significantly enhances innovation in manufacturing. Across manufacturing classifications, OFDI's positive effects are notable in technology-intensive industries and medium-low-technology industries. Tailored recommendations for government and industry are proposed to contribute to the goal of "intelligent manufacturing in China 2025".