Acting effectively for economic security requires understanding how global production networks are organised and evolving. Geopolitical tensions, supply-chain disruptions and technological change have increased the need for evidence on economic dependencies. Bilateral trade statistics alone do not fully reveal indirect dependencies across global value chains.
Manufacturing production and value creation have become increasingly concentrated. In 2024, the People’s Republic of China (hereafter, ‘China’) was the largest producer of value-added in 14 of the 18 manufacturing industries, and. the largest producer in gross output in 17 industries, compared with none in 2000. In five industries; China accounted for 37–49% of world value-added in 2024, up from 8–13% in 2000, compared with 6–12% for the next-largest economy in 2024.
Chinese value-added is markedly embedded in other countries’ production and consumption. China's share of foreign value-added in world exports more than tripled, from 3% to 11% between 2000 and 2024.In 2024 it was the largest source of value-added in foreign final demand in many manufacturing industries.
Leading supplier relationships have also changed sharply. China was the largest foreign supplier in around 40% of the country-industry relationships examined in 2024, compared with about 4% in 2000. In half of these relationships, its contribution was at least twice that of the next-largest supplier.
Manufacturing dependencies on China are asymmetric. In 2024, all 79 partner economies examined depended more on Chinese value-added than China depended on theirs.
Better evidence is essential for strengthening economic security while preserving openness. Mapping dependencies and their transmission through global value chains can help governments target resilience measures where they are most needed.
Economic security in global production
As geopolitical tensions, supply-chain disruptions and rapid technological change expose potential vulnerabilities in critical inputs, technologies and strategic sectors, policymakers increasingly need detailed evidence on economic dependencies, exposure to external shocks and the relationship between domestic production capacity and market demand. These concerns extend from emerging technologies and critical inputs to established and capital-intensive industries such as steel or shipbuilding.
Changes in where goods are produced and value is created are reshaping economic dependencies. Global value chains allow countries to specialise, combine inputs from different sources and gain access to international markets, technologies and knowledge. However, the concentration of production and reliance on foreign suppliers raise questions about exposure to disruption. Concentration and foreign dependency do not necessarily constitute vulnerability. Instead, the policy challenge is to identify where concentrated or asymmetric relationships could create material exposure while preserving the openness and international co-operation that support innovation and economic prosperity.
China’s expanding role in manufacturing provides a central case for examining these changing patterns of globalisation. Between 2000 and 2024, China became the largest producer of value-added in 14 of the 18 manufacturing industries covered by the OECD Inter-Country Input-Output (ICIO) tables, compared with none in 2000.
Understanding these relationships requires looking beyond direct bilateral trade. Products can cross several borders during production, while value created in one economy may become embedded in another economy’s exports and ultimately serve demand elsewhere. The OECD Inter-Country Input-Output (ICIO) tables trace value-added, meaning the value created at each stage of production, through these connections. The data can help identify the original sources of supply and reveal concentrated or asymmetric relationships that conventional trade statistics alone can miss. The same approach can be applied across the economies, sectors and years covered by the data.
Mapping these changes needs to be distinguished from explaining their causes. This note provides a high-level view of changes in global manufacturing value-added, including the routes through which value-added travels and asymmetric dependencies, with steel in Latin America as an illustrative case. The OECD’s steel work illustrates how government support can contribute to excess capacity, influence firms’ market shares and transmit competitive pressures through direct exports, downstream goods and third-country supply chains. OECD work on subsidies can provide complementary firm-level evidence on subsidies and their relationship with market-share developments (OECD, 2026[1]).
Production and value creation are becoming more concentrated
The geographical distribution of manufacturing value-added has changed markedly between 2000 and 2024. By 2024, China's share of world value-added had risen from 13% to 47% in textiles and apparel, from 10% to 47% in other non-metallic minerals, from 9% to 37% in electrical equipment, from 8% to 45% in non-ferrous metals, and from 12% to 42% in basic iron and steel. Its share of gross output rose from 44–57% in 2024 among the same five industries, up from 12–17% in 2000. In 2000, no individual economy accounted for more than 29% of world value-added in these manufacturing industries.
Source: OECD calculations based on the OECD ICIO tables Inter-Country Input-Output tables | OECD
These changes have widened the gaps between leading producers. In 2024, the next-largest individual producing economy accounted for only 6–12% of world value-added across these five industries, while the European Union’s 27 Member States together accounted for 7–19%. China’s growing role extends beyond these industries. In 2024, it was the largest producer of value-added in 14 of the 18 manufacturing sectors covered by the OECD's ICIO tables, compared with none in 2000. It was the largest by gross output in 17, the exception being coke and refined petroleum products.
The same shift is visible in trade and final demand. Measured by forward linkages, meaning the value-added that an economy creates and that is embodied in other economies' exports or final demand, China's share of the world total of value-added embodied in economies’ exports rose more than threefold, from 3% in 2000 to 11% in 2024, overtaking Germany, Japan and the United Kingdom. China is also the largest source of the value-added embodied in other economies' final demand (their consumption and investment) in many manufacturing industries, including 46% in textiles and apparel, 34% in non-metal minerals, 33% in non-ferrous metals, and 31% in electrical equipment.
Leading supplier relationships have changed significantly
The growing concentration of production has changed the sources of value-added on which economies and industries depend. In 2000, China was the largest foreign supplier in around 4% of the 4 606 country-industry relationships in the database.1 By 2024, this share had increased to around 40%.and in over half of those relationships, its contribution was at least twice that of the next-largest foreign supplier.
Source: OECD calculations based on the OECD ICIO tables Inter-Country Input-Output tables | OECD
These changes in supplier rankings extend across several major producing economies. Among supplier-buyer relationships in which China ranked first as supplier in 2024 but had not done so in 2000, the United States had previously ranked first in 450 relationships, Japan in 289 and Germany in 198.
Dependencies can be indirect and highly asymmetric
Value-added created in one country can be embodied in inputs that pass through successive stages of production before reaching their final destination. Chinese value-added represented 15.6% of Viet Nam’s exports and 14.5% of Cambodia’s exports in 2024, up from 2.8% and 1.5% respectively in 2000. Thailand sourced 9.5% of the value embodied in its exports from China, while the corresponding shares for several other economies, including Korea, Malaysia, Mexico and Singapore, were between 6% and 7%.
Range and minimum and maximum asymmetry across partner economies
Note: An economy's dependence on a partner is the share of the partner’s foreign value-added in the economy’s final demand for manufacturing. Asymmetry is the partner's dependence on the economy minus the economy's dependence on the partner, in percentage points. Positive: the partner depends more on the economy; negative: the economy depends more on the partner. Lines show the range across partners; circles mark the largest positive asymmetry for 2024.
Source: OECD calculations based on the OECD ICIO tables Inter-Country Input-Output tables | OECD
Dependence is asymmetric when one economy relies more on a partner’s value-added than the partner relies on its value-added. In manufacturing in 2024, all 79 of China’s partner economies depended on Chinese value-added more than China depended on theirs, by 21 percentage points on average. The change over time is clear across the major economies and ASEAN. In 2000, the relationship was close to balance for most of them, and for six (the United States, Japan, Germany, Korea, France and ASEAN) China depended more on them than they did on China. By 2024, the balance had shifted towards China for every economy. The shift is smaller for France, Germany, the United Kingdom and the United States (up to about 18 points) and larger for Japan, Korea, ASEAN, Australia and Indonesia (between 25 and 34 points by 2024).
Exposure can spread through downstream products and third economies
Like other regions, Latin America is being affected significantly by surging steel imports sourced from countries with significant excess steelmaking capacity. Excess capacity, which results mainly from pervasive non-market policies and practices such as market-distorting subsidies, has been the main driver of this import surge and remains a major challenge for the global steel industry (OECD, 2026[2]).
Steel illustrates how concentrated exposure can extend across industries and through third economies. Steel originating in China accounted for around 32% of the steel embodied in Latin America’s final demand, up from around 17% in 2015. By 2024, it represented about half of the region’s foreign steel supply embodied in final demand.
Source: OECD (2026[3]), Inter-Country Input-Output tables (ICIO), authors’ calculations, see also (OECD, forthcoming[4]) Latin America absorption of global steel excess capacity.
This exposure is not limited to direct steel trade. Steel is a key input into downstream manufacturing (e.g. fabricated metals, machinery and motor vehicles): 86% of Chinese steel embedded in these products reaches LAC6 directly from China, while 14% is exported indirectly through third economies, mainly ASEAN (7%).
These initial findings show why assessments based only on direct imports provide an incomplete picture of economic security exposure. Following value-added through global production networks can reveal the original sources of supply, the industries through which exposure travels and relationships that are more concentrated or asymmetric than bilateral trade data suggest. Deeper sector-, firm- and product-level analysis is needed to identify the underlying causes and specific chokepoints. This evidence can help governments distinguish international interdependence from concentrations that may warrant closer attention, while preserving the openness on which global production depends.
Map direct and indirect dependencies. Complement conventional trade statistics with evidence on where value-added originates, how it moves through intermediate economies and where it is ultimately absorbed.
Monitor changes in concentration and dependence. Track leading supplier relationships, differences in dependence between partners and exposure transmitted through downstream products and third economies.
Distinguish dependency from vulnerability. Assess alternative suppliers, the strategic importance of affected inputs and the potential consequences of disruption before intervening.
Use vulnerability assessments to inform economic security decision making. Bring evidence on dependencies and the consequences of disruption into the design of industrial, trade and resilience policies.
Keep policy responses proportionate and work with trusted partners. Target material vulnerabilities while preserving the openness, specialisation and international co-operation that support innovation, economic growth and prosperity.
References
[3] OECD (2026), Inter-Country Input-Output tables (ICIO), https://www.oecd.org/en/data/datasets/inter-country-input-output-tables.html.
[1] OECD (2026), OECD MAGIC Database of Industrial Subsidies, OECD Publishing, Paris, https://doi.org/10.1787/ce94f33b-en.
[2] OECD (2026), OECD Steel Outlook 2026, OECD Publishing, Paris, https://doi.org/10.1787/99ab9b0c-en.
[4] OECD (forthcoming), Latin America absorption of global steel excess capacity.
Contact
Directorate for Science, Technology and Innovation (OECD) sti.contact@oecd.org.
← 1. each of the 94 economies excluding RoW and China, with each of the 49 sectors excluding D97T98 household as employers.