Evolution of Production Networks in the Asia-Pacific Region: A Vision in Value-Added and Employment Dimensions
Chapter 6 from "Asian Economic Integration in an Era of Global Uncertainty" edited by Shiro Armstrong and Tom Westland, by ANU Press, The Australian National University, Canberra, Australia dx.doi.org/10.22459/AEIEGU.01.2018.06
30 Pages Posted: 28 Jan 2018
Date Written: January 10, 2018
This chapter provides stylized facts about the nature and evolution of Global Value Chains in the Asia–Pacific region, with particular attention to cross-national transfers of value added. The re-organization of production systems based on cross-country comparative advantages had a significant impact on the relative demand for labor by skill levels. Building on progress made in statistics and on advancements in input-output and graph analyses, we map and visualise regional production networks by tracing supply–use relations of goods and services between industries and across borders. This network moved from a simple hub and spokes cluster, centred on Japan, to a much more complex structure following the emergence of China that involved various countries as secondary pivots. We also identified the relative position of countries, which revealed the role and specialisation of each economy in the region’s vertical production system. The paper illustrates the development of value-added flows across countries in relation to major trade agreement schemes. It considers also the effects on employment, which has been a central subject of political debates over time. The demand for low-skilled jobs went down, while the demand for high-skilled tasks increased, across all developed and developing Asia-Pacific economies. The demand for medium-skilled workers, however, presents considerable variations among countries depending on the country’s status of economic development.
Keywords: global value chains, input-output analysis, employment
JEL Classification: C67, F14, F15, F16
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