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COVID-19 and Global Supply Chain Configuration: Economic and Emissions Impacts of Australia-China Trade Disruptions

Economic shocks from COVID-19, coupled with ongoing US-China tensions, have raised debates around supply chain (or global value chain) organisation, with China at the centre of the storm. However, quantitative studies that consider the global and economy-wide impacts of rerouting supply chains are l...

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Autores principales: Shi, Xunpeng, Cheong, Tsun Se, Zhou, Michael
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Frontiers Media S.A. 2021
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8488164/
https://www.ncbi.nlm.nih.gov/pubmed/34616710
http://dx.doi.org/10.3389/fpubh.2021.752481
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author Shi, Xunpeng
Cheong, Tsun Se
Zhou, Michael
author_facet Shi, Xunpeng
Cheong, Tsun Se
Zhou, Michael
author_sort Shi, Xunpeng
collection PubMed
description Economic shocks from COVID-19, coupled with ongoing US-China tensions, have raised debates around supply chain (or global value chain) organisation, with China at the centre of the storm. However, quantitative studies that consider the global and economy-wide impacts of rerouting supply chains are limited. This study examines the economic and emissions impacts of reorganising supply chains, using Australia-China trade as an example. It augments the Hypothetical Extraction Method by replacing traditional Input-Output analysis with a Computable General Equilibrium analysis. The estimation results demonstrate that in both exports and imports, a trade embargo between Australia and China – despite being compensated for by alternative supply chains—will cause gross domestic production losses and emissions increases for both countries and the world overall. Moreover, even though all other economies gain from the markets left by China, many of them incur overall gross domestic production losses and emission increases. The finding that the Association of Southeast Asian Nations and India may also suffer from an Australia-China trade embargo, despite a gain in trade volume, suggests that no country should add fuel to the fire. The results suggest that countries need to defend a rules-based trading regime and jointly address supply chain challenges.
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spelling pubmed-84881642021-10-05 COVID-19 and Global Supply Chain Configuration: Economic and Emissions Impacts of Australia-China Trade Disruptions Shi, Xunpeng Cheong, Tsun Se Zhou, Michael Front Public Health Public Health Economic shocks from COVID-19, coupled with ongoing US-China tensions, have raised debates around supply chain (or global value chain) organisation, with China at the centre of the storm. However, quantitative studies that consider the global and economy-wide impacts of rerouting supply chains are limited. This study examines the economic and emissions impacts of reorganising supply chains, using Australia-China trade as an example. It augments the Hypothetical Extraction Method by replacing traditional Input-Output analysis with a Computable General Equilibrium analysis. The estimation results demonstrate that in both exports and imports, a trade embargo between Australia and China – despite being compensated for by alternative supply chains—will cause gross domestic production losses and emissions increases for both countries and the world overall. Moreover, even though all other economies gain from the markets left by China, many of them incur overall gross domestic production losses and emission increases. The finding that the Association of Southeast Asian Nations and India may also suffer from an Australia-China trade embargo, despite a gain in trade volume, suggests that no country should add fuel to the fire. The results suggest that countries need to defend a rules-based trading regime and jointly address supply chain challenges. Frontiers Media S.A. 2021-09-20 /pmc/articles/PMC8488164/ /pubmed/34616710 http://dx.doi.org/10.3389/fpubh.2021.752481 Text en Copyright © 2021 Shi, Cheong and Zhou. https://creativecommons.org/licenses/by/4.0/This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
spellingShingle Public Health
Shi, Xunpeng
Cheong, Tsun Se
Zhou, Michael
COVID-19 and Global Supply Chain Configuration: Economic and Emissions Impacts of Australia-China Trade Disruptions
title COVID-19 and Global Supply Chain Configuration: Economic and Emissions Impacts of Australia-China Trade Disruptions
title_full COVID-19 and Global Supply Chain Configuration: Economic and Emissions Impacts of Australia-China Trade Disruptions
title_fullStr COVID-19 and Global Supply Chain Configuration: Economic and Emissions Impacts of Australia-China Trade Disruptions
title_full_unstemmed COVID-19 and Global Supply Chain Configuration: Economic and Emissions Impacts of Australia-China Trade Disruptions
title_short COVID-19 and Global Supply Chain Configuration: Economic and Emissions Impacts of Australia-China Trade Disruptions
title_sort covid-19 and global supply chain configuration: economic and emissions impacts of australia-china trade disruptions
topic Public Health
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8488164/
https://www.ncbi.nlm.nih.gov/pubmed/34616710
http://dx.doi.org/10.3389/fpubh.2021.752481
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