Quanrun Chen, Kunfu Zhu, Peng Liu, Xiangyin Chen, Kailan Tian, Lianling Yang, Cuihong Yang · 2018
Economic Systems Research · Informa UK Limited

Distinguishing China's processing trade in the world input-output table and quantifying its effects

Distinguishing processing trade is crucial to national input-output table-based research on China's international trade. This paper further investigates the importance of distinguishing China's processing trade in multicountry input-output table-based studies. We focus on the bias in China's bilateral trade in value added caused by China's undistinguished processing trade. We construct a product-by-product world input-output table capturing China's processing trade based on the World Input-Output Database. Empirical studies show that, if China's processing trade is undistinguished, the profile of China's bilateral trade in value added would be seriously distorted; China's bilateral net trade in value added with some economies, such as Japan, Korea and Taiwan, would be significantly underestimated, while it would be significantly overestimated for some other economies, such as the United States. Distinguishing processing trade in multicountry input-output tables is also crucial when China's bilateral trade in value added is considered.

Full publication is available on: DOI 10.1080/09535314.2018.1534225

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Cuihong Yang

Cuihong Yang
Chinese Academy of Sciences

Cuihong Yang is professor at the Chinese Academy of Sciences, where she also obtained her PhD. Her main research areas are input-output analysis, economic forecasting and global value chains. She was vice president of the International Input-Output Association(2013-2018) and is the executive vice president of the Chinese Input-Output Society (2016 onwards). Besides, she is member of the editorial board of the Journal of Systems Science and Complexity and of Economic Systems Research.

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