Journal publications

Making efforts to establish Chinese natural gas prices, China has built up two gas exchanges while opening its gas markets step by step. In view of this, this paper first studies and summarises the successful experiences of developing European gas trading hubs in the following aspects: 1. necessary conditions like market liberalization, competitive market, non-discriminatory third-party access to pipeline, regulations and reforms on the dominant market players, etc.; 2. natural conditions like domestic production, trade traditions, diversified supply, market surplus, etc.; and 3.

Subsidising energy has been widely used but is economically unfavourable. The Malaysian government has shown strong intention to reduce energy subsidies recently, but faces challenges to prepare policy instruments to manage the impact. This study develops a Computable General Equilibrium (CGE) model with breakdown of households by income level to evaluate the potential impacts of removing energy subsidies on the Malaysian economy. It is shown that removing petroleum and gas subsidy would improve economic efficiency and increase GDP up to 0.65%.

The oil indexed pricing mechanisms for natural gas and LNG in Asian markets, although successful until the 1990s, are general considered to be no longer appropriate, with a weak relationship between oil and gas market fundamentals. Since the current oil-indexed pricing system fails to reflect the natural gas market fundamentals, several East Asian countries including China are considering formulating their own natural gas benchmark prices.

Public calls for a more aggressive regional response to China’s pressing of its territorial claims in the South China Sea are typically couched in terms of the threat posed to freedom of navigation. Yet this invites an obvious question: If freedom of navigation, a vital interest for nearly every country in the region, is at risk, why has the regional response to China’s actions to date been so limited? This article argues that one compelling explanation lies in the economics of freedom of navigation in East Asia.

This paper proposes that the gas economics in East Asia (including Southeast Asia and Northeast Asia) is different from standard economics due to its exogenous oil-indexed pricing and certain region-specific and industry-specific factors. Based on a hypothesis of distinctive economics, this paper proposes an analytical framework that studies East Asian gas markets. This paper demonstrates this framework through a case study of the effects of a low oil prices.

Energy prices are often distorted by government control, which is justified on the grounds that such control will help mitigate the negative impact of price volatility from oil imports, and thus positively affect the domestic economy. This paper shows in a two-sector growth model that regulatory price distortion can negatively affect the economy, and then, based on the model, empirically estimates the impact of the price distortion on output growth in China, using monthly, time series data from 2005M1 to 2012M12.

This paper examines the uncertainties in Chinese gas markets, analyses the reasons and quantifies their impact on the world gas market. A literature review found significant variability among the outlooks on China's gas sector. Further assessment found that uncertainties in economic growth, structural change in markets, environmental regulations, price and institutional changes contribute to the uncertainties.

This paper summarises the four papers in the special issue on ‘Gas and LNG pricing and trading hub in East Asia’ in Natural Gas Industry B.

ACRI’s Professor James Laurenceson discusses issues surrounding new estimates of productivity change in China calculated by Professor Harry X. Wu. He makes two points of reflection on a well-constructed and thought-provoking paper that presents a sombre view of China’s productivity performance. First, living standards are ultimately reflected in labour productivity and China’s labour productivity has continued to increase at a rapid rate.

This journal article was published in the Australian Journal of International Affairs, 70:1, 1-5.

Introduction