Discussion Paper No.1206
Title:INPUT-OUTPUT ANALYSIS OF THE INTERDEPENDENCE BETWEEN
JAPAN AND CHINA THROUGH JAPANESE OVERSEAS PRODUCTION
Authors:MITSUO YAMADA
Abstract:
As is well known, China has been expanding for 30 years after opening up her economy
and introducing market mechanisms to it. In that process, foreign direct investment
has played an important role, and many foreign firms, including Japan, have located
their plants and branches in China. These overseas productions alter the pattern of
international trade between Japan and China. METI, Japan and the National Bureau
of Statistics of China have cooperatively compiled a 2007 Japan-China International
Input-Output table, with 77 sectors for each country. That table captures the latest
interdependent structure between them. Using a METI Statistics “Survey of Overseas
Business Activities,” we reconstructed the table as one that extracts Japanese
production activities from China. Here we used the micro data of about 3,600
establishments in these Survey Statistics. The table consists of Japan, China (minus
Japanese subsidiaries), and Japanese subsidiary activities in China with 30 sectors for
each. Using this recompiled input-output table, we discuss two topics. One is the
regional contribution of value-added and imports against a one unit increase of final
demand in the Japanese subsidiary sector. The other is a simulation analysis of the
production shift from Japan to China.
Keywords: Overseas production; Production shift; Micro data; Input-output analysis