Discussion Paper No.1504

Abstract :
The aim of this paper is to clarify economic impacts on the Japanese economy from the trade between China and Japan. One is the production expansion and employment creation inside Japan that is caused by export expansion from Japan to China. It can be considered a positive impact on the Japanese economy. On the other hand, it is possible that the production and the employments in Japan are decreased because of the expansion of import from China to Japan. This is considered a negative impact on the Japanese economy. Here, we estimate these economic impacts, the expansion or contraction of production and employment, using the Input-Output model. Considering the regional difference in the magnitude of the impacts in China, we developed the International and Regional Input-Output Model by linking the 2007 Regional Input-Output table for 8 regions with the 2007 Japan-China International Input-Output table. Using this table, we conduct an analysis of the impacts of trade between each region and Japan on the Japanese economy in terms of production and employment.

Keywords : Input-output; Regional economy; Chinese economy; International trade
JEL classification: R15, F14