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