Industrial interdependence: China 1995-2010

The present article focuses on inter-industrial activity via a useful decomposition of the input-output model and deals with the changes of domestic industrial/sectoral backward and forward linkages (i.e. the pull and push of the economy) as well as the changes in their domestic and imported components (i.e. via import substitution/penetration) over the 1995-2010 period. There are three distinctive periods of import substitution/import penetration, which seem to correspond to the East-Asian crisis of 1997 and the global crisis of 2008 as well as the main reform and policies of the periods. The secondary and tertiary sectors show a positive increase in both the pull of backward linkages and the push of forward linkages, showing important levels of absolute import substitution. This is especially true for the pull of light and heavy industry on the economy and secondarily for domestic trade, heavy industry becoming the main engine of the economy by far.