What network analysis can teach us about chinese economic structure

The reforms undertaken or expected by Chinese policymakers are likely to cause significant stress on the economy. In order to understand the implications for the economic system and its capacity to resist these shocks successfully (resilience), we carried out a spatial network analysis that helped to identify intersectoral interdependencies which could affect the behavior of the Chinese economy in reaction to exogenous (policy) shocks. The analysis starts from estimating the sectoral specialization of 287 municipalities across 14 industries using occupational employment shares. Secondly, the analysis identifies sectoral interdependencies across these sectors using a network based approach.