Distinguished economists from universities and research institutions inBeijinggathered together at Shunde Building of SEM onJan 15, 2007for the symposium on the Rate of Return to Capital inChina, engaging themselves in a heated discussion over the subject which has raised much debate across the country.

The Symposium on the Rate of Return inChinawas jointly hosted by the Department of Economics (TsinghuaUniversity), Center forChinain the World Economy and the “Comparative Studies”.Prof. Li Daokui, director of the Center forChinain the World Economy, presided over the conference.

The symposium was opened with a report delivered by Prof.Bai Chongen, based on his latest paper “Rate of Return to Capital inChina”, co-published with Prof.Chang-Tai Hsieh and Prof. Qian Yingyi. After careful and strict analysis on the data over Chinese economy, the paper concludes that “between 1979 and 1992, the aggregate rate of return inChinawas 25 per cent; it has since declined modestly to a still respectable level of 20 per cent. It has remained there since 1998.” It says, “the rates of return inChinaare above rates of return for most advanced economies calculated on similar basis," and all in all, their findings on the returns to capital “provide no evidence to believe thatChinainvests too much at the aggregate level."

Economists attending the symposium including Prof. Ren Ruoen fromBeijingUniversityof aeronautics and astronautics, and Xu Chenggang, a special-term professor of Tsinghua SEM made comments on the paper. “The paper-Rate of Return to Capital in China has both high theoretical value and practical significance especially during the time when there have been many notions in China saying ‘the rate of return to capital in low in China’, ‘China invests to much’”, said Prof. Xu Chenggang at the meeting.

Fierce debate and discussion followed the report at the symposium targeted at the paper and the question of “rate of return to capital inChina”.

The paper “Rate of Return to Capital inChina” was the latest output of research jointly conducted by Prof. Bai Chongen, Prof. Chang-Tai Hsieh and Prof. Qian Yingyi. It was initially published onBrookings Papers on Economics Activity(Issue 2, 20006) in theUnited States. And the Chinese version was published onComparative Studies, vol.28.