<p>China’s active participation in the global value chains (GVCs) has significantly impacted the spatial distribution of its domestic industries. To examine the impacts of China’s GVC participation on industrial spatial agglomeration, we construct a new economic geography model that employs two countries, two factors, and three industries with an international vertical division for theoretical analysis. Using manufacturing industries data from 2000 to 2013 for empirical analysis, our findings indicate that industries with higher participation in GVCs show higher levels of industrial agglomeration compared to those with low GVC participation. Furthermore, heterogeneous effects reveal that GVC participation can enhance industrial agglomeration in both capital and technology-intensive industries, with more significant effects on capital-intensive industries, and minimal impacts on labor-intensive industries. The impact of GVC participation on industrial agglomeration is greater in high-tech industries, those industries with high levels of robot application and coastal regions, as compared to medium and low-tech industries, industries with low levels of robot application and inland regions. Moreover, both forward and backward participation modes in GVCs can foster industrial agglomeration, while GVC forward participation has a greater promoting effect, indicating that occupying a higher position in the value chain is more favorable to local industrial agglomeration.</p>