The CEP continued its strong partnership with Peking University in China throughout 2012. The CEP hosted Bijun Wang, a PhD student at Peking who spent nine months in Australia completing her research. Ms Wang works under the guidance of Professor Yiping Huang at Peking and whilst at ANU she was able to continue her research under Professor Ligang Song. Ms Wang looked into the growing importance of foreign direct investment from China. Ms Wang’s PhD seeks to find the pattern and characteristics of China's OFDI and try to discover a developing-country-specific FDI theory.
The CEP has recently welcomed Professor Jiang Wu from the Ecomonics School at the Central University of Finance and Economics in Beijing. Professor Wu will be a visiting research fellow with the CEP for 12 months. While at ANU, Professor Wu will work in collaboration with Professors Song and Yongsheng Zhang from the Development Research Centre of the State Council in Beijing. In association the three will examine the impact of climate change on agriculture under different adaptive conditions. The research develops a general equilibrium framework incorporating changes in agricultural prices in studying farmers' adaptive behaviour. The framework identifies the conditions under which both the extent and direction of climate change impacts on farmers and how this can be captured. The empirical tests using the data from China show three important results. First, in responding to the climate change, ‘smart farmers’ will make the decision on production not only driven by changes in output but also by net profits. Second, a fall in output resulting from climate change may not necessarily lead to a fall in farmers' net profits because of the price adjustment. Finally, the impact of climate change on agriculture is indeterminate in that it could reduce farmers' net profits in case of flood and drought and increase their net profits in the case of rising temperature.
Research assistant Dr Luke Deer has been working with the China Economy Program for all of 2011. Dr Deer has work with Professor Song on a paper analysing China's approach towards the ‘Global Imbalances’. The paper which will be published soon seeks to develop a conceptual and policy framework for understanding and dealing with China's approaches in addressing the 'global imbalances'. The paper analyses the ‘imbalances’ problem in relation to major structural challenges that have arisen within China's current industrialisation path. It is hoped that Dr Deer will remain an active member of the CEP team as he progresses in his career.
Two important books have been completed in 2011 and will be formally published in 2012.
The first is titled ‘China's Test of Limits to Growth’ and is a joint project between CEP Director Professor Ligang Song and CEP Chair Professor Ross Garnaut. The book addresses issues surrounding China's demand for minerals and energy resulting from its rapid industrialisation and its deepened integration with the world economy.
The book examines the experience of growth in resources demand and the associated pressure on global markets from North America, Japan, Taiwan and Korea during their periods of sustained, rapid economic growth for periods in the second half of the twentieth century. It seeks to draw lessons from this experience for what we can expect from Chinese growth in the first half of the twenty first century. The book approaches these issues from both demand and supply sides in order to answer the question of whether and how the world economy will cope with the completion of the industrialisation in China.
A second book which has recently been completed is titled ‘The Chinese Steel Industry Transformation: Structural Change, Performance and Demand on Resources
’. Edited by CEP Director, Professor Ligang Song; international economist at Westpac, Huw McKay; and Senior Fellow and Vice President of the China Steel Industry Development Research Institute, Haimin Liu, the book is due for publication in 2012. The book provides a central reference work on the Chinese steel industry. Included are both macroeconomic studies of developments in Chinese resource demand with particular reference to the ferrous metals complex and microeconomic studies that utilize the comprehensive firm-level data to evince new knowledge of both firm and industry performance with respect to their productivity, the technical efficiency, and industrial linkages. The book also discusses trade in steel products and the impact of the restructuring of the industry on the environment.