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FEC Articles Express:FEC 2020 March Issue


Frontiers of Economics in China

Volume 15, Issue 1 (March 2020)

Kevin X.D. Huang, Zixi Liu, Guoqiang Tian
Promote Competitive Neutrality to Facilitate China’s Economic Development: Outlook, Policy Simulations, and Reform Implementation—A Summary of the Annual SUFE Macroeconomic Report (2019–2020) 

Fang Wang, Hongzhong Yan, Duo ZhangThe Transition of Thoughts on Grain Control in the Qing Dynasty: A Survey of the Great Debate on the Ever-Normal Granary and Grain Prices in 1748

Dicle Ozdemir
Interest Rate Volatility Regimes in Selected Asian Countries: A Univariate Markov Switching Analysis

Guangying Xie
How Firms’ Ownership Structure Impacts Online Peer-to-Peer Lending 
Performance in China

Xiaoheng Zhang, Xu Tian
Firm-Level TFP Growth in the Chinese Automobile Industry

Yifan Liu, Shi-Dong Liang
A Global-Optimal Portfolio Theory beyond the R-σ Model



Promote Competitive Neutrality to Facilitate China’s Economic Development: Outlook, Policy Simulations, and Reform Implementation—A Summary of the Annual SUFE Macroeconomic Report (2019–2020)

Kevin X.D. Huang

Zixi Liu

Guoqiang Tian


Abstract: Twenty nineteen (2019) marked another year of lethargic growth in the Chinese economy amidst escalated internal and external complexities. Internally, the country’s macroeconomic landscape was overcast continuously by fallen consumption growth, plunged growth in manufacturing investment, rapid accumulation of household debt, risen income inequality, and the overhang of local government debt. The nation’s external conditions did not fare any better, with drastically declined growth in imports and exports, continued trade tensions with the US, and weakened external demand. Based on the IAR-CMM model, which takes account of both cyclical and secular factors, the baseline real GDP growth rate is projected to be 6.0% in 2020 (5.9% using more reliable rather than the official data), with a downside risk. Alternative scenario analyses and policy simulations are conducted, in addition to the benchmark forecast, to reflect the influences of various internal and external uncertainties. The findings emanated from these analyses lead us to stress the importance and urgency of deepening reform to achieve competitive neutrality for China’s transformation into a phase with sustainable and high-quality development.


Postscript: These analyses were completed before the recent COVID-19 outbreak -- the unprecedented pandemic has dramatically aggravated the outlook, especially in the short to medium term. From a longer term perspective, the analyses already released in our annual report and the severe adverse effects of the recent pandemic lead us to stress persistently the importance and urgency of deepening reform to achieve competitive neutrality for China’s transformation into a phase with sustainable and high-quality development.



Interest Rate Volatility Regimes in Selected Asian Countries: 

A Univariate Markov Switching Analysis 

Dicle Ozdemir

Mugla Sitki Kocman University

Abstract: Business cycle dynamics are determined by relatively large volatilities in output, consumption, and investment, which leads to cyclical fluctuations in interest rates. Using the Markov switching model, we model the nominal interest rate movements to explain the volatility regime shifts in a set of selected emerging Asian economies. The estimated results provide significant evidence of regime-dependent means, variances, and probabilities in both stable and volatile regimes in selected countries, confirming the existence of two distinct regimes in nominal interest rate movements. In addition, the smoothed probability results of switching autoregressive model show that the model is capable of capturing the two regimes for the corresponding nominal interest rate behaviors. Besides, the results reveal that the stables regimes have higher durations than the volatile regimes. This study also shows the advantage of Markov switching models over conventional regression models, allowing the identification of different regimes for the cyclical behavior of interest rates.


Journal Profile

Frontiers of Economics in China (FEC) is a quarterly peer-reviewed journal edited by Institute for Advanced Research, Shanghai University of Finance and Economics, and published by Higher Education Press.  Established in 2006 and with Guoqiang Tian as the Editor, the journal has a strong Editorial Advisory Board (with several Nobel Prize winners as board members), as well as a dedicated Co-Editors’ team and an Editorial Board comprised of leading overseas and domestic Chinese economists.

Issued quarterly and distributed worldwide, the FEC is available both online and in hard-copy.  With more than 600 institutional subscribers worldwide and indexed in more than 10 databases including EBSCO-BSU, EconLit, ESCI, Gale, ProQuest, RePEc and SCOPUS, the journal was ranked as one of “The Highest International Impact Academic Journals of China” in 2016 and 2019.

The FEC welcomes submissions of theoretical and empirical papers from all fields of economics, particularly those with an emphasis on the Chinese economy and other emerging, developing or transition economies.  While the journal is primarily interested in original research papers, it also welcomes submissions of opinion articles, literature surveys, and book reviews. 

Based on data from the WOS website, scholars from about 500 institutions (2/3 of which are outside China), including NBER, WHO, Harvard University, MIT, UC-Berkeley, Oxford University, National University of Singapore, Seoul National University, University of Bonn, University of Tokyo, Peking University and Tsinghua University, have cited articles published in FEC.  Among the journals that have cited FEC articles are American Economic Review, Science, International Economic Review, China Economic Review, Journal of Comparative Economics, Journal of Economic History, Journal of Economics & Management Strategy, and Journal of Population Economics.


Editor: Guoqiang Tian

Executive Editor: Zhiqi Chen

Co-Editors: Chunrong Ai, Kevin X.D. Huang, Neng Wang, Quan Wen


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