This research aims to clearly illustrate the economic growth and changes in the industrial structures of both China and Japan, as well as the dependence relationship between the two countries and the impact that their trade and foreign direct investment (FDI) have on their respective economies. It also intends to develop a multisectoral econometric model of China-Japan economic relations designed to work out policy simulations and future prospects. In traditional multi-sectoral econometric models, approaches have been adopted in such a manner that makes the macro-econometric model of each country multi-sectoral under the framework of inputoutput
analysis, making such a multi-sectoral econometric model duly linked by means of the international trade model. This research is based on the understanding that an international input-output table can describe the dependence relationship of each country most commensurately, and therefore attempts the method from the start where the macro-econometric model of each country should be made multi-sectoral under the framework of
international input-output analysis. In addition, many earlier studies have estimated time-series information such as input coefficients or
expenditure coefficients of final demand by implementing various measures based on the information from a nation's input-output table as of a specific point in time or as of the bench mark year. In this research, we intend
to establish time-series China-Japan international input-output tables by means of Economate I-O and later utilize the original database. Furthermore, in this research that aims to develop a China-Japan multi-sectoral econometric model, because the accumulation of research achievements on China lags far behind when compared to Japan, we are going to examine, on a priority basis, the theoretical framework and equation of the models, primarily focusing on China’s multi-sectoral model.