From SARS to COVID-19: The Evolving Role of China-ASEAN Production Network

37 Pages Posted: 2 Jul 2020 Last revised: 21 Apr 2021

See all articles by Ammu George

Ammu George

National University of Singapore (NUS) - Asia Competitiveness Institute

Changtai Li

Nanyang Technological University (NTU) - Division of Economics

Jing Zhi Lim

National University of Singapore (NUS) - Lee Kuan Yew School of Public Policy

Taojun Xie

National University of Singapore (NUS) - Asia Competitiveness Institute

Date Written: April 21, 2021

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.

Keywords: COVID-19, Production Network, China, SIR Model

JEL Classification: E2, F1, I1

Suggested Citation

George, Ammu and Li, Changtai and Lim, Jing Zhi and Xie, Taojun, From SARS to COVID-19: The Evolving Role of China-ASEAN Production Network (April 21, 2021). Economic Modelling, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3641263 or http://dx.doi.org/10.2139/ssrn.3641263

Ammu George

National University of Singapore (NUS) - Asia Competitiveness Institute ( email )

469C Bukit Timah Road
Level 3, Wing A
259772
Singapore

Changtai Li

Nanyang Technological University (NTU) - Division of Economics ( email )

HSS 04-53, 14 Nanyang Drive
Singapore, 639798
Singapore

Jing Zhi Lim

National University of Singapore (NUS) - Lee Kuan Yew School of Public Policy ( email )

Singapore 117591
Singapore

Taojun Xie (Contact Author)

National University of Singapore (NUS) - Asia Competitiveness Institute ( email )

469C Bukit Timah Road
Level 3, Wing A
259772
Singapore

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