School of Statistics
An International Conference about ACFTA held in the School of StatisticsThe conference "Australia-China Free Trade Agreement (ACFTA): Econometric Modeling and Policy in Trade, Investment and Economic Integration" is sponsored by Center for Applied Statistics (CAS) of Renmin University of China (RUC), School of Statistics of RUC, Center for Strategic Studies of Victoria University of Australia and Department of Statistics of Capital University of Economics and Business, and was held in Beijing on April 17th ~ 18th , 2006. Scholars and experts from Australia, Thailand, Vietnam and China were present at the conference. The conference was held in English.  Conference Backgrounds and AimsAustralia and China are actively engaging in high-level official discussion and consultation in both countries to set up an Australia-China Free Trade Agreement (ACFTA) to promote further trade (worth about $29 billion in 2004 – DFAT), investment, services and growth for mutual benefits. The seminar aims to get together a select group of senior economic and trade experts, business people, and university scholars (the participants) from Australia, China and major ASEAN countries (that may be affected by ACFTA) to study and discuss these FTA issues to provide significant inputs to more informed debates on the benefits and costs of an ACFTA and its potential impact on major ASEAN members who also have strong economic and trade relations with Australia.  Main Topics of the Conference
Lectures of the Participants1. Modeling Gains and Losses from an Australia-China Free Trade AgreementSpeaker: Professor Tran Van Hoa, Centre for Strategic Economic Studies (CSES), Victoria University, Melbourne City, MC 8001, Australia Abstract: In pursuing policies of trade liberalisation and growth promotion within the framework of regional economic integration, WTO membership and globalisation, major Asian developing economies and China in particular had achieved economic 'miracles' in the past decades. Recently, however, they face many challenges, economically and politically (Tran Van Hoa, 2002), compounded by a global (especially the US) economic slowdown (IMF, 2005), terrorist attacks, the SARS and avian flu outbreaks, currently unprecedented Indian Ocean tsunami devastation affecting millions in Asia, and other domestic or international (eg, the current China-Japan and China-Taiwan tension) uncertainty ahead. What are the development and growth prospects then for these economies or especially China in the medium and long term? The paper introduces the generalised gravity theory (Tran Van Hoa, 2004) to construct a simple flexible simultaneous-equation econometric model of growth and trade of China and its five major trading countries or blocs (Japan, ASEAN-6, the European Union, the US, and Australia). The model incorporates explicitly major temporary and persistent structural changes. Using latest ICSEAD, OECD and WBWT data, the paper reports efficient empirical results on trade-growth causality, trade determination and effects of shocks and policy reform on trade and growth between these economies and China over the past two decades. Based on these findings and current trade policies and economic relations negotiations, economic policy challenges are then targeted for discussion and for resolution development.  2. Dragon by the Tail, Dragon by the Head, Bilateralism and Globalism in East AsiaSpeaker: Professor Pham Lan Huong, Central Institute for Economic Management (CIEM), Ministry of Planning and Investment, 68 Phan Dinh Phung, Hanoi, Vietnam Abstract: In this paper, we examine the bilateral implications of regional and global trade arrangements in the East Asian context. Using a dynamic global CGE model, we examine a variety of trade scenarios, in terms of bilateral relations between China and two of its most populace regional partners, Vietnam and Japan. Given the differences between the latter two economies, it might be reasonable to expect divergence in the bilateral outcomes. Our findings indicate that differences in initial conditions can indeed have a significant impact on bilateral adjustments, and that these can be adverse for some partners in the absence of policies that promote trade complementarity. By the latter we mean bilateral import and export patterns where the aggregate grows faster for each country than their total trade, but which help sustain bilateral balance of payments equilibrium.  3. ACFTA and the Implications for ThailandSpeaker: Professor Euamporn Tasarika, Faculty of Economics, Thammasat University, Bangkok 10200, Thailand Abstract:
 4. Australia-China Free Trade Agreement: prospects and opportunitiesSpeaker: Professor Charles Harvie, Economics Discipline, School of Economics and Info. Systems, Faculty of Commerce, University of Wollongong, Wollongong, NSW 2522, Australia Abstract: Australia is the only major developed economy currently negotiating an FTA with China, presenting a unique opportunity for the two countries to forge stronger economic and trade links. From an Australian perspective this presents considerable economic opportunities to engage with a country that contributed more than a quarter of the world's economic growth in the past two years. The Australian government sees this as a major opportunity of gaining not only new market access for its resource sector, farmers, manufacturers and service providers, but also consolidating Australia's existing position in this vital market. Market access negotiations with China are due to begin in the second half of 2006. From a Chinese perspective it presents the opportunity of establishing a secure source of supply of minerals and energy upon which the future growth of its rapidly developing manufacturing sector will depend, as well as expanding its export markets for such products. To date, four negotiating meetings have already taken place to exchange information about each country's trade and investment regimes, and to examine how best to deal with areas of interest in an FTA. The huge market potential in China is seen as a crucial reason why Australia cannot stand still while its competitors negotiate FTAs with China. In a key sector of the economy Australia has experienced a trebling of agricultural exports to China over the past decade, now worth more than $3 billion to Australian farmers. This comes on the back of Australia's record export high $176.7 billion exports to China in 2005 fuelled by resource exports. In fact, more than most economies, Australia stands to make significant economic gains from the establishment of an FTA because of the obvious complementary nature of both economies. While Australia's trading strategy places emphasis on successful outcomes under the Doha Round of trade negotiations in the World Trade Organization, slow progress has stimulated interest and greater activity in the establishment of FTAs. The Australian government has successfully negotiated free trade agreements with the United States (2004), Thailand, Singapore as well as the long established CER with New Zealand dating back to the 1970s. The paper reviews the current trading and investment relationship between China and Australia, identifies trade complementarities and sectoral revealed comparative advantages, and identifies key trade and investment opportunities for Australian and Chinese businesses. The paper concludes that there are numerous such opportunities of mutual benefit for both these countries.  5. Research on the Protectionism Trade Policy using Cluster AnalysisSpeaker: Zhuo Jun, School of Management, Zhejiang University Abstract: This paper analyzes the foreign trade policies of different countries using cluster analysis, the data are from 2001 to 2005. We classify the protectionism policy in three different forms – the high protectionism, the median protectionism and the low protectionism. Finally we analyze the relationship between these forms in the structure.  6. An Empirical Study on Export's Contribution to China's Economic GrowthSpeaker: Professor Kang Zengkui, Yan Hengyin, Fang Lei, Capital University of Economics and Business Abstract: In this paper, we find that previous studies underestimate China's export's contribution to GDP growth due to their neglect of export's indirect impacts on domestic consumption, investment, government expenditures and imports. With a new estimation method we find that a ten percent increase in exports will result a one percent increase in GDP during the past 20-odd years, if both the direct and indirect contributions are taken into consideration.  7. The Estimates of Potential GDP of China in 2006 and 2007Speaker: Liu Yang, Jiao Peng, Central University of Finance and Economics Abstract: It is an attracting problem of measuring of potential GDP because government can make out correct economic decision based on this figure. The paper decomposes business cycle of China, gets fluctuations, which we call it "cycles", and trends, judges the phase of China economic situations, and estimates potential GDP of China in 2006 and 2007 and rate of potential economic growth.  8. Research on the Influence of Interprovincial Migration of Human Capital on Regional Economy DevelopmentSpeaker: Associate Professor Liu Juan, Capital University of Economics and Business Abstract: It has been known that human capital has an important influence on the economy growth, on which researches are not very much by now. On the basis of the C-D production function, this article introduces the concept of effective human capital and the mobility of effective human capital and makes improvement to the model, carries on the quite comprehensive analysis of the relation of the interprovincial human capital migrations and the development of regional economy in china using the model of PANAL DATA, and obtains a series of significant conclusion. 9. Positive Analysis on the Factors of Influencing Farmers' Investment -- Xinjiang as an ExampleSpeaker: Cui Yuxue, School of Labor Relations and Human Resources, Renmin University of China, Beijing, 100872, China Abstract: Farmers should be the main body of agricultural production investment on the condition of market economy. This article is based on the analysis of the farmers' investment in Xinjiang, taking the forming process and use of farmers' disposable income as clue, by positive analysis method, analyzing the quantitative relation between farmers' investment and main influencing factors. The key point to develop agriculture in Xinjiang is to encourage farmers to invest much more in farming work. The difficulty is how to raise farmers' consuming level and how to make them willing to spend their savings on investment. The center to solve the problem on widening the sources of their consumption and savings is to increase farmers' income.  10. A New Approach to Solving Mean-VaR Model: Saddle-Point Approximation and Genetic AlgorithmSpeaker: Zhang Jianlong & Lin Qingquan, School of Finance, Renmin University of China Abstract: Mean-variance model has a wide application in optimizing asset portfolio. As VaR becomes more and more popular measure of risk in financial organization, mean-VaR model was built to optimize the asset portfolio on the basis of the same idea with mean-variance model and it is a nonlinear program. On the premise of convexity and differentiability of VaR, the solution meeting Kuhn-Tucker condition is the globally optimal for nonlinear program. In this paper a new approach is provided to solve mean-VaR model, and it needn't meet the premises for VaR. At first, compute VaR taking advantage of saddle-point approximation and build connection between VaR and the asset positions in CreditRisk+. Secondly, find the optimal solution for the model by genetic algorithm. At last, a portfolio of bonds as an example is used to demonstrate the validity of the approach. 11. The Language Strategy in Transnational InvestmentSpeaker: Cao Xiaowei, Renmin University of China Abstract: The provision of appropriate English education as a second language has been hot education debates in China since 2003. Given the persistence of online public, policy and theoretical debates, the role of foreign language education in schools and universities is a fundamental issue and must be addressed in practice, policy and theory for the benefit of young people, business and society. Those who launched the debates in China opposed the provision of educational authorities because they pointed out that the predominance of foreign languages (particular English) led to an issue of curriculum equity in schools and universities and study rights of citizens. The underlying issue of equivalence is lodged in what is deemed to be appropriate, reasonable and equitable when students and work force are faced with a forced choice to adopt English and to pass various examinations of it set by different authorities whereas other studies of youth, sometimes middle-aged Chinese, reveal that people manage to weave themselves bright future without the same reluctance. Similar debates occurred in the United States when the National Council of Organizations of Less Commonly Taught Languages (NCOLCTL), in collaboration with the Chinese Language Teachers Association (CLTA) and the Chinese Language Association of Secondary-Elementary Schools (CLASS), undertook a collaborative project entitled The Chinese Language Field Initiative (CLFI) between 2001 and 2004. The purpose of CLFI was to strengthen the architecture of the Chinese language field at all levels in the United States. The disputes of the same kind in other countries such as UK, Korea, pointed to crucial problems: Does the cost of learning a foreign language pay off? Should a country take a language strategy as one of the important strategies in its international economic activities? This paper puts forward affirmative answers to the questions and emphasizes on the economic significance through analyzing some data of the international investments in China.  12. Venture Capital in Australia and in ChinaSpeaker: Li Zhaohui, Renmin University of China, Beijing 100872, China Abstract: This paper compared the venture capital (VC) activities between in China and in Australia. Results showed that there existed great differences in sources of funds, industry preference and exit channels between two countries' venture capital industry. These differences mainly came from their operating backgrounds especially financial background. Australia had a developed financial market to provide stable funds sources and flexible exit channels. But Australia's VC firms favored traditional industry more than high technology industry. China had a defective stock market and a confined insurance market that obstructed the development of China's VC industry greatly. So, to further VC industry to support the development of high technology industry, China's government and Australia's government should take different measures.  13. Analysis and Forecast on Real Estate Market of Hangzhou CitySpeaker: Zhang Yuan, Associate Professor, Dept. of Management Engineering, Beijing Institute of Civil Engineering and Architecture, PHD Student of Business College, Renmin University of China. Abstract: This thesis analyzes supply and demand of real estate market, investment, prices, exchanging quantity and leasing of real estate of Hangzhou City, and also forecasts the development trend of the real estate market of Hangzhou. The research shows that supply and demand of land resources is in imbalance, the demand of real estate is strong but the prices of real estate are too high, the second-hand residence market is active in Hangzhou City.  14. Monetary Policy in Western ChinaSpeaker: Zhao Haiyun, Renmin University of China, Beijing 100872, China Abstract: This article discusses the necessity of formulating the monetary policy for the western China and, it also explores the goals and policy instruments and intermediate targets of the monetary policy for the western China. The monetary policy of China plays a positive role in strengthening and improving macro adjustment and control, as well as in maintaining a steady and fast economic growth. But, a gap exists, in terms of economic status and the social development, between the western part and the rest part of China, an integrated national monetary policy cannot satisfy the actual need of the western part of the country. There is a need to formulate a special monetary policy, which is appropriate and able to accommodate their actual economic conditions.  15. Analysis of State-Owned and State-Controlled Industrial Enterprises' Development and CompetitivenessSpeaker: Zhang Lei, Dai Yifan, School of Statistics, Renmin University of China Abstract: State-owned and state-controlled enterprises, especially industrial enterprises, have long been holding the pivotal status in our national economy, thus whose reform and development has exerted a profound influence on the social development. Focusing on the data of recent years that related to the state-owned industrial enterprises, learning from the predecessors' work and through our further analysis, in this article we made every effort to provide the readers current situation and actual competitiveness of state-owned and state-controlled industrial enterprise in China.  16. The Industrial Structure and Foreign Investment Introduction Policy in Shanghai and Its AdjacencySpeaker: Xie Yihui, School of Statistics, Renmin University of China Abstract:
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