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From SARS to COVID-19: The evolving role of China-ASEAN production network

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  • George, Ammu
  • Li, Changtai
  • Lim, Jing Zhi
  • Xie, Taojun

Abstract

Two decades after the severe acute respiratory syndrome (SARS) outbreak, Asia is confronted with the coronavirus disease 2019 (COVID-19) that has significantly affected the region's economy. In a novel general equilibrium model, we introduce epidemiological dynamics to the production network between China and the Association of Southeast Asian Nations (ASEAN). In this model, agents' risk-averse behavior during pandemics leads to shifting demands across economic sectors. We calibrate the model with the Organisation for Economic Co-operation and Development (OECD) inter-country input-output tables for pre-SARS and pre-COVID-19 periods and control for disease dynamics across years. Findings show that in the absence of policy interventions, China's greater significance in global value chains is associated with substantial economic impacts, within China and the ASEAN region. Our sensitivity analyses further show that China's containment efforts reduce the spillover effects on ASEAN.

Suggested Citation

  • George, Ammu & Li, Changtai & Lim, Jing Zhi & Xie, Taojun, 2021. "From SARS to COVID-19: The evolving role of China-ASEAN production network," Economic Modelling, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:ecmode:v:101:y:2021:i:c:s0264999321000997
    DOI: 10.1016/j.econmod.2021.105510
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    Cited by:

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    2. Taojun Xie & Jiao Wang & Shiqi Liu, 2021. "Impact of Travel Bubbles: Cooperative Travel Arrangements in a Pandemic," Melbourne Institute Working Paper Series wp2021n10, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    3. Dogah, Kingsley E., 2021. "Effect of trade and economic policy uncertainties on regional systemic risk: Evidence from ASEAN," Economic Modelling, Elsevier, vol. 104(C).
    4. Lazebnik, Teddy & Shami, Labib & Bunimovich-Mendrazitsky, Svetlana, 2023. "Intervention policy influence on the effect of epidemiological crisis on industry-level production through input–output networks," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    5. Haoyu Wang & Yishan Zhang & Yingying Qin & Chao Chen & Beason Richard, 2022. "The Economic Impact of the SARS Epidemic with Related Interventions in China," IJERPH, MDPI, vol. 19(20), pages 1-17, October.
    6. Cottafava, Dario & Gastaldo, Michele & Quatraro, Francesco & Santhiá, Cristina, 2022. "Modeling economic losses and greenhouse gas emissions reduction during the COVID-19 pandemic: Past, present, and future scenarios for Italy," Economic Modelling, Elsevier, vol. 110(C).
    7. Yang, Yiwen & Lin, Chinho, 2021. "Impact of the “Belt and Road Initiative” on machinery production networks," Economic Modelling, Elsevier, vol. 104(C).
    8. Naeem, Muhammad Abubakr & Yousaf, Imran & Karim, Sitara & Tiwari, Aviral Kumar & Farid, Saqib, 2023. "Comparing asymmetric price efficiency in regional ESG markets before and during COVID-19," Economic Modelling, Elsevier, vol. 118(C).

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    More about this item

    Keywords

    COVID-19; Production network; China; Susceptible-infected-recovered model;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • F1 - International Economics - - Trade
    • I1 - Health, Education, and Welfare - - Health

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