Interdependence of Production and Income in Asia-Pacific Economies: An International Input-Output Approach

In this paper, we investigate interdependencies between Asia-Pacific economies by using the Asian International Input-Output Table. The results of production inducement analysis show that the production inducement coefficients of many Asia-Pacific countries have recently increased, and in particular production inducements to East Asian countries, especially China, have increased. Thus, interdependencies between Asia-Pacific economies in terms of global production networks deepened further from 2000 onwards through increases in trade in intermediate products. In particular, China plays a more important role than ever as the main production center in the Asia-Pacific region. Moreover, the degrees of income dependence between these countries are examined. It is found that East Asian economies have not necessarily become more autonomous than before in terms of their income dependence. Rather, their economic structure still tends to be affected by economic developments outside the region.