Special Interview 1Interview with Meijun Qian, Associate Professor at the Research School of Finance, Actuarial Studies
and Statistics at the College of Business and Economics of the Australian National University

By Japan SPOTLIGHT
In Asia now there are many bright and active young economists, whose intelligence and vitality will be
key to achieving Asian economic prosperity, as well as enhancing Asia’s contribution to the global
economy. Japan SPOTLIGHT had an interview with one such economist, Prof. Meijun Qian.

Self-introduction
JS: Could you please introduce

yourself briefly?

Qian: I am an associate professor at theResearch School of Finance, Actuarial
Studies and Statistics at the College ofBusiness and Economics of the Australian
National University. My main researchinterest is in emerging markets,particularly financial systems related toeconomic growth, and also genderequality and women’s leadership incorporations. I am currently working on
topics such as productivity, resources
reallocation and market liquidity.

growth perspectives andovercome the middle-income
trap?
Qian: This is a big question in my opinion
and the answer depends on each country’s
different setting. However, overall, I viewfinancial structure and institutional
infrastructure as two very important
things that need to be fixed to address themiddle-income trap: improvements toencourage competition, support
technology advancement, and allocate
resources efficiently. Government policy isalways a very important component aswell.
JS: What is your view on how weshould address thedemographic challenges ofMeijun Qian, Associate Professor of the Australianaging societies in Asia today?
National University
JS: How do you assess theDo you think raising thegrowth potential of the Asian economy?
participation of women in the labor force would be agood solution?

Assessment of Asian
Economy’s Growth Potential

Qian: Overall, positively. The recent slowdown is not surprising. On
the one hand, it is a natural transition for emerging economies toenter a relatively slow but stable growth stage after a booming
period; on the other, they are affected by the monetary issues in theUnited States and Europe. Growth comes from technology
advancement and production efficiency, and in both areas there isroom for Asian countries to improve. There is in particular a lot ofearly-stage technology that could further mature and be applied toindustry in ways which have yet to happen in Asia. On production
efficiency, in China for example, there are many institutional settings
and arrangements that do not allow resources to be allocatedefficiently.
JS: What kind of structural reform would benecessary to improve Asian countries’ long-term

40 Japan SPOTLIGHT • September / October 2016

Qian: Aging society is a reality now faced by many countries:
medical advancement allows for longevity while financial pressure or
liberal culture reduces birth rates. This situation inevitably affects
labor supply and increases social welfare burdens. Again, Asia is avery diverse place. In certain countries, a social welfare system wasnever established, so they need to start work on that; in othercountries retirement and social welfare systems are in place, so theissue is whether they can be sustainable. There are a couple ofapproaches to alleviate the problem. First, to extend the retirementage. Singapore for example has recently implemented such a policy.
Second, as you mentioned, to introduce more women into the laborforce. Finally to sustain overall economic growth is also very
important.
Raising women’s participation, however, has to be accompanied

by many institutional changes to help women outsource domestic
tasks that have traditionally been absorbed by women without
payment. For example we could introduce more affordable childcare,or introduce some kind of tax incentive for women to stay in thelabor force. When women are incentivized to work, and do not haveto worry about childcare, we would see more and more women
working in the labor force and then slowly cultural views on women’srole in the economy will change too.

Some Emerging Policy Issues in Asia
JS: Because of the increasing financial burden,

Japan is now faced with the big question ofincreasing the consumption tax rate. Do you thinksuch kinds of tax hikes would be necessary forother Asian countries as well in the near future?

Qian: I would not say necessary, but it can work in some aspects,
and it also depends on where the tax is levied. If the consumption tax
is added on all goods, it might actually reduce consumption, which
would not be a good idea for the economy. A progressive tax would
be better, because people who are able to afford more luxury goods
will be less concerned about this marginal tax increase than thepeople whose major consumptions are for basic needs and would
become even more burdened because of the increase in tax. If theeconomy is growing, even without adding to the tax rate, people
make more income, more contribution to the retirement pool, andmore tax as well. I think that enlarging the pie is a much better way
to fix the problem.
JS: What do you think about trade liberalization inAsia, such as the TPP and RCEP? And what are
your observations about the rise of inward-looking
protectionism around the world, which often seems
to be based on political rather than economic
motivations?

Qian: At the aggregate level, introducing competition across borders
improves production and allocation efficiency and is a positive thingfor growth. But whether and how much a country or industry
benefits really depends on its comparative advantages. If the country
does not have outstanding advantages compared to its trade
partners, confined by its limitations, the country will have difficulty inchanging its industry in the short term, when free trade is introduced
and allows goods to move around. Therefore, the country might
suffer in some aspects, and this will add to the pressure on
politicians. People may turn to protectionism in the short term as it
seems an easy way for them to stop this painful transition.
Politicians may even use this sentiment to gain votes.
I do think that nationalism and protectionism are backward.
Donald Trump in the US, for example, argues that they are not to go
backward but to protect jobs. But Americans are losing
manufacturing jobs exactly because their country does not have acomparative advantage in these areas. On the other hand, the US
does have advantages in many other areas, for example in newtechnology development. However, the education system supports
only a small group to succeed on that path. Therefore, for a large
group, moving forward is a very painful process, which involves not
only economic policy but also education and politicalinterdependence across countries, as well as other things. That is
why people tend to go back. The recent Brexit event is anotherperfect example. The TPP and RCEP similarly may face too muchpolitical interference, leaving their results in doubt.
JS: Do you think regional integration of Asian
economies has positive implications?
Qian: I really believe so, and it could set an example of where theglobal trade economy should go. We have large populations that are
geographically and culturally close, so it is easy to see how thisintegration can form a new economic structure concerning not only
trade in goods but also in talent and resources. Another thing iscurrency, on which bilateral agreements on its arrangements would
be a big help in the integration process.
JS: Are you optimistic about entrepreneurship inAsia, and women’s role in it?
Qian: In capitalism, entrepreneurship is the fuel for growth. What isdifferent for the new generation I think is that they see a much more
dynamic world than the older generation. So the way they run
entrepreneurship might be very different, also because the financial
platform or information technology allows them to be. On women’srole, I see a lot of potential: currently, because most entrepreneurs
are men and not enough women are working, not enough women aregetting enough financial help to start a business. I do think if we canunlock women’s talent, it can greatly add to economic growth.

Political Impediments to Asian EconomicIntegration
JS: How do you assess the political impediments toAsian regional integration? And do you thinkinternational fora like APEC or the East Asian
Summit could be useful to mitigate this Asian
Paradox?

Qian: International politics have caused many impediments in Asian
regional integration, from an economic development point of view.
Whether it will be mitigated or aggravated in the future depends on
many countries’ systematic factors such as culture, history, value
systems, and idiosyncratic factors such as who will be elected asleaders. APEC is always important, and certain agreements can bereached there, but conflicts are also always there. You can see theseconflicts causing problems for mutual trust among countries, which
in turn affect their efforts to integrate trade and economic policies.
Japan SPOTLIGHT • September / October 201641Special Interview 1
JS: So do you think we should maybe stimulate orrevitalize those political processes, such as byadding new members? Or perhaps by adding further
issues for political cooperation such as disastermitigation, human security or environmental
concerns to the agenda?

Qian: Those issues are very important, and I think there should be
more creative ways of addressing them at the same time when we
promote economic collaboration. Anyone with passion and talents inthese areas can make big contributions, including women who form
half the population and often have their talents locked up due tocultural or institutional factors. But I do not think adding moremembers or introducing new fora would change anything on
economic integration. Rather there should be less politics, if
countries could put down a lot of their historical problems andidealism issues, including difficult topics like human rights anddemocracy. I am an economist, I believe there are ways to allow
economic collaboration without bringing up those political issues.
Politicians somehow seem to use these issues as bargaining power,
and when agreement cannot be reached, it affects the economic
parts of the agenda.

Addressing Social Issues
JS: Moving to social perspectives, do you thinkincome inequality is also a very important issue forAsia?

Qian: I do think it is a very urgent issue. And a lot of its
consequences are starting to show up as the tip of the iceberg. Asia
has very dense populations. Big income gaps and conflicts between
the very rich and very poor can become really detrimental simply
because of this population base. It will cause very serious social
problems. Asian countries, some in particular more than others,
should address this issue as a top priority. From simple statistics
and the Gini ratio, we can see this gap getting wider. For example, inChina it is a question of whether the gap has gone beyond the safe
boundary. Where the gap comes from and how it can be fixed aredifferent in each country. However, I agree that this will be a very
interesting topic and international institutions, aside from eachcountries’ own policy research, like the Asian Development Bank,
could take on issues like this.
JS: Would these questions of income inequality andpoverty have a big impact upon the tradeliberalization discussion too?
Qian: Yes. We have talked a little bit about how trade liberalization tosome extent might alleviate domestic income inequality — forexample, if a country has a large population who are poor and canprovide cheap labor, that country can improve exports and fix to acertain degree the income issue. The deep roots of income
42 Japan SPOTLIGHT • September / October 2016

inequality, however, are in domestic policies — because income
inequality is not just about creating income, but more about theallocation of income. When an economy grows, there is value added
into the economy, but how the pie is distributed among people is theactual key to addressing income inequality.
JS: How do you think women can play a key role inthis dialogue on social issues?
Qian: I do think women can play a bigger role. On one hand, women
have gender-neutral human talents, knowledge in areas likeeconomics, management or communication that are useful foraddressing social issues. But their gender traits also often makethem on average more caring about younger, older and vulnerable
people. Many women have struggled through underprivileged
experiences that would also help them to see what issues exist andbetter understand what kind of mechanisms can work to get people
out of poverty, or what social or psychological support may beneeded for people in underprivileged situations.

Education, the Key to Resolving Questions
JS: In order to achieve many of the things we havediscussed, such as income equality, economic
vitality, innovation and promoting the role ofwomen, and perhaps for politics as well, education
is surely the key. Perhaps things like exchanges ofstudents among Asian countries would lead tobetter mutual understanding? How do you think this
could be promoted?
Qian: Yes: the young generation study overseas, understand theculture, and are better able to understand the other side of the tablein business negotiations. In terms of income inequality, providing
education opportunities to poor people helps social mobility. It would
help lift the poor families out of poverty.
Back to international exchange, such exchanges have been
happening. With information technology and relatively easy travelingacross borders, large numbers of international students areappearing in many areas. The economic and social issues would also
inspire the new generation: for their own careers, the young
generation is incentivized to go abroad and have broad exposuresand experiences.
What governments need to do is to not stand in the way, to allow
the free flow of those ideas and those educational and humanexperiences. As long as governments can let it naturally happen, orto a certain degree encourage it by providing scholarships or otherforms of support, I think it would be a very positive effort.

Written with the cooperation of Chaobang Ai, a Tokyo-based editor andblogger.