1、The Centre of Policy StudiesCentre of Policy StudiesBuilding 11EMonash UniversityClayton, Victoria 3800AustraliaWeb address: http:/www.monash.edu.au/policy/ABN No 12 377 614 012Contact persons at the Centre of Policy Studies: Dr Yinhua MAI Professor Philip ADAMSSenior Research Fellow DirectorTel: 61
2、-3-99055482 Tel: 61-3-99055094Fax: 61-3-99052426 Fax: 61-3-9952426yinhua.maibuseco.monash.edu.au philip.adamsbuseco.monash.edu.auContacts in China Dr Mingtai FAN Professor Ronglin LI Institute of Quan. & Tech. Economics Institute of international Economics Chinese Academy of Social Sciences Nankai U
3、niversity5 Jianguomennei Street Beijing 100732 China 94 Weijin Road, Tianjin, 300071, China Tel: 86-10-65125895 Tel: 86-22-23505235 Fax: 86-10-65137561 Fax: 86-22-23502437 mtfan lronglin Acronyms and InitialsCGE Computable General EquilibriumCoPS Centre of Policy StudiesDFAT Department of Foreign Af
4、fairs and Trade, AustraliaFTA Free Trade AgreementGDP Gross Domestic ProductGNE Gross National ExpenditureGNP Gross National ProductGTAP Global Trade Analysis ProjectMMC Monash Multi-CountryMOFCOM Ministry of Commerce, Peoples Republic of Chinanec not elsewhere classifiedROW Rest Of the WorldWTO Wor
5、ld Trade OrganisationTable of ContentsExecutive summary iii1. Introduction 12. Growing economic partnership between Australia and China 32.1 Chinas demand for Australian agricultural and mineral products 32.2 Two-way trade in manufacturing products 42.3 Cooperation in the services sector 42.4 Deepen
6、ing partnership in the future 53. Trade and investment barriers between Australia and China 63.1 Border protection on merchandise trade 73.2 Restrictions on investment flows 103.2.1 Australias foreign investment regime 103.2.2 Chinas foreign investment regime 103.3 Restrictions on trade in services
7、114. Removing border protection on merchandise imports 134.1 GDP and Volumes of Trade 134.2 Real wages and Employment in the Long-run 144.3 Welfare effects and the Terms of Trade 154.4 Industry output 164.5 Industry employment 175. Facilitating bilateral investment flows 186. Service trade liberalis
8、ation 217. Aggregate effects of Australia-China FTA 237.1 Macroeconomic impacts 237.2 Industry impacts 247.3 Labour market adjustment 257.3.1 Australia Wearing apparel 257.3.2 Australia motor vehicles and parts 267.3.3 China Agriculture 267.3.4 China - mining 267.3.5 China - services 278. Faster ver
9、sus slower liberalisation 279. Impact on Rest of the World 2810. Concluding remarks 28References 30Appendix A. The modelling framework MMC 32Overview: Economic agents and the nature of the markets 33CGE Core: Demands for inputs to be used in the production of commodities 33 Household demands 34 Inpu
10、ts to investment 34 Governments demands for commodities 34 International trade 34 Factor markets 35 Physical capital accumulation 35Model closure 35Solution software 36Executive summary1. In 2002 Australia and China established a Trade and Economic Framework to enhance bilateral trade and investment
11、. Under the framework, a joint feasibility study of a possible Australia-China Free Trade Agreement （FTA） is being conducted. 2. The Centre of Policy Studies was commissioned by the Australian Department of Foreign Affairs and Trade to conduct modelling analysis on the potential benefits of an Austr
12、alia-China FTA. The study was undertaken jointly with experts from the Chinese Academy of Social Sciences and Nankai University.3. In this study we simulate three aspects of an FTA: removal of border protection on merchandise trade, investment liberalisation, and removal of barriers to services trad
13、e. The analytical framework is a multi-country, multi-sector computable general equilibrium model, the Monash-Multi-Country model. In our simulation we assume that the implementation of policy changes under the FTA commences in 2006.4. In simulating the impacts of policy changes under an FTA, we fir
14、st simulate a business-as-usual scenario （or baseline）. The baseline describes the evolution of the Australian and Chinese economies in the absence of an Australia-China FTA. The effects of the policy changes under the FTA are reported as changes relative to baseline levels. 5. From our modelling we
15、 conclude that for both Australia and China the FTA yields increased output and is welfare enhancing. The FTA is estimated to boost the present value （see Figure 7.1 on page 42） of real Gross Domestic Product （GDP） and real Gross National Product （GNP） between 2006 and 2015 as follows: Australia rea
16、l GDP, US$18 billion; China real GDP, US$64 billion; Australia real GNP, US$22 billion; and China real GNP, US$52 billion.6. In terms of average annual growth rates between 2005 and 2015, the FTA is estimated to increase Australias real-GDP growth by 0.039 percentage points; and increase Chinas real
17、-GDP growth by 0.042 percentage points.7. Real GDP increases in both countries due to increased capital, improved productivity and better utilisation of resources. A key factor underlying the increase in Australias real GNP is an improved terms of trade.8. The FTA enhances the economic partnership b
18、etween Australia and China by increasing bilateral trade and investment flows. It is also trade creating for the world as a whole. The volume of world imports increases from its baseline level as a result of the Australia-China FTA.9. In achieving a better utilisation of resources, adjustment of lab
19、our between sectors does occur, largely due to the removal of border protection on merchandise trade. However, due to the complementarities of the two countries, such reallocation of labour between sectors tends to facilitate the natural course of adjustment already occurring in the two countries. F
20、urthermore, such adjustment is small in scale compared with what is occurring in the two countries amid globalisation without an FTA. 10. The Australian industries that benefit most from the FTA are cereal grains, wool, wool tops, minerals, and non-ferrous metals. The Chinese industries that benefit
21、 most from the FTA are manufacturing industries, especially textiles, wearing apparel, and miscellaneous manufactures （toys and sporting goods etc）. Services sector in both countries benefit from the FTA.11. If the policy changes are implemented gradually between 2006 and 2010, the long-run effects
22、of the FTA in 2015 are similar to those from full implementation in 2006. However, faster implementation leads to earlier delivery of the gains for both countries. As a result, the present values of gains in real GDP and real GNP are smaller with slower implementation.1. IntroductionThe Centre of Po
23、licy Studies （CoPS） was commissioned by the Department of Foreign Affairs and Trade （DFAT） to conduct a model-based study into the economic impacts of a Free Trade Agreement （FTA） between Australia and China. The study was undertaken jointly with experts from Chinese Academy of Social Sciences and N
24、ankai University.The study is based on simulations undertaken with the MONASH Multi-Country Model （MMC） of Australia, China and the Rest Of the World （ROW） developed at CoPS. MMC features: Dynamic mechanisms that allow the time-path of effects of a shock, such as the implementation of an FTA, to be
25、analysed over a number of years; An industry structure （see Table 1.1） that allows the industrial impacts of an FTA to be analysed in considerable detail; A realistic baseline consistent with the views of expert forecasters such as the World Bank and the International Monetary Fund. Specific account
26、ing for trade flows between countries that allows for the simulation of removing border protection on bilateral imports; Specific accounting for bilateral investment flows that allows for the simulation of investment liberalisation, as well as the liberalisation of services trade of the commercial-p
27、resence type （defined in Box 1.1 below）.Box 1.1 Four modes of trade in services According to the World Trade Organisation （WTO）, trade in services has four modes: cross-border supply services supplied from one country to another （e.g. international telephone calls）; consumption abroad consumers from
28、 one country making use of a service in another country （e.g. tourism）; commercial presence a company from one country setting up subsidiaries or branches to provide services in another country （e.g. a bank from one country setting up operations in another country）; and movement of natural persons i
29、ndividuals travelling from their own country to supply services in another （e.g. an actress or construction worker）.In this report the explanation of results are presented in a non-technical manner so as to be readily comprehensible to readers unfamiliar with the MMC model. A brief technical descrip
30、tion of the model is given in Appendix A.The modelling covers simulations of the following three aspects of trade liberalisation under an FTA: the removal of existing barriers （tariff and non-tariff） to trade in goods between Australia and China; the liberalisation of investment flows between Australia and China; trade liberalization in serv
