A Dynamic Computable General Equilibrium Analysis On The Trade Liberalization Of Services Trade Between China And Australia

Into the 21st century, services trade has become the engine of a new round of economic growth, it's also the focus of international competition. Recently because of the international financial crisis, all countries face major challenges in the development of services trade, and accelerate the negotiations of the free trade agreement. There are also an increasing number of bilateral agreements in services trade being negotiated by members of many organizations. So far from the first round of negotiations on free trade agreement in 2005 with Australia, China and Australia have conducted a total of 13 times of negotiations on tariffs, services, investment and text of the agreement. The negotiations have made significant progress, but still have big difference in the service sector. With the growing importance of the status of services trade, when negotiate with Australia which is a developed country of large scale of economy, and face its well-developed service sector and the perfect market mechanism, China is misgiving about the open choice of key services sectors.Against this background,, the paper first analyses the status and characteristics of the Sino-Australia trade in services sectors with some trade-related index based on the Sino-Australia services trade data from 2000 to 2006. After the introduction and expansion of China's dynamic computable general equilibrium model - MCHUGE Model, including Considering the characteristics of services trade, pulling in the commercial presence mode of services trade,split the Sino-Australian trade data in services and incorporating the quantify barriers of services trade, the paper builds a module of Sino-Australian in services trade, simulates the impact on China's service industry output and employment, as well as the overall macroeconomic under the liberalization of Sino-Australian trade in services sector and give the policy recommendations.The results show that: Removing all barriers to trade in telecommunications and financial services is projected to increase China's GDP by 0.147% and 0.013% respectively, and almost all the increase in the gross national product is derived from the remove of market access barriers, which means the elimination of market access barriers are more important in these two sectors. Comparing the two department results, the telecommunications services gains from removing the telecommunications services barriers are bigger than financial services .GDP growth was mainly driven by investment, the increase in national welfare reflected the raise of the national wage; the total employment has little change and labor adjusted between industries; the output services increased much among national economy, while the employment rate of telecommunications declined largest among the industries; other sectors output increased because of the decline in prices of intermediate inputs, cost reduction, as well as the increase of national income; telecommunications liberalization led to the largest growth in service sectors output, and financial liberalization resulting from the service and manufacturing output grew more rapid.