This paper examines the impact of welfare reforms on the sustainability of public pension schemes. The paper reviewed past and current literature and practices of various countries to evaluate the effectiveness of reforms used from the aspect of structural and systemic parameters focusing on sustainability and distributive impartiality. This review concludes that there are no ideal pension scheme but there are reforms that have shown to be beneficial to the sustainability and distributive impartiality of pension systems and such reforms should be applied in combination to suit the economic dynamism of each individual country.

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The bilateral trade between Asia and United States (US) was diluted since the 1997 Asian Financial Crisis. On the other hand, trade ties between Asia and China has been strengthened as China has emerged as the regional and global manufacturing powerhouse attributable to her abundance of labor and aggressiveness of open door policies. In light of the rapid development of regional production networks, vertical intra-industry trade (VIIT) has become increasingly important in Asia. The dynamic changes of Asia’s trade networking have reinforced ASEAN-5’s (Indonesia, Malaysia, Philippines, Singapore and Thailand) desire to boost the development of VIIT with China in manufactured products. This study seeks to identify the determinants for VIIT between ASEAN-5 and China in the miscellaneous manufacturing sector (SITC 8). The VIIT indices, computed using the decomposition type threshold method, were subjected to panel data analysis using spatial panel model. The explanatory variables consists of ASEAN-5’s FDI in China (FDI), differences in GDP between each ASEAN-5 country and China (DGDP), trade openness (TO) and spatial interaction effect of VIIT (SVIIT). Spatial panel model is adopted in this study as it is strongly believed that spillover effects among ASEAN-5 countries are present. The data used comprise annual statistics from 1993 to 2009. The econometric results show that trade openness is the significant determinant of VIIT as it reduces trading costs and service costs and provides greater opportunity for production fragmentation and results in greater intensity of VIIT between ASEAN-5 and China. The econometric results also confirm the presence of spatial interaction effects among ASEAN-5 as SVIIT is significant. The negative coefficient of SVIIT signifies intense competition among ASEAN-5 countries on VIIT with China in SITC 8. To transform the competition into complementation, ASEAN Economic Community can play a pivotal role as it is a good channel for each ASEAN-5 country to leverage their comparative advantage respectively, and sustain the bilateral trade with China in SITC 8.

China is currently the major foreign direct investment (FDI) destination arising from her open door policies since 1978. FDI has become a large impetus to China’s economic growth. However, the geographical distribution of FDI in China is severely biased with 83% concentrated in the eastern region. This is a result of not only differences in locational advantages but also the result of the initiating policies and temporal differences of FDI inflows among the regions. This study aims to examine the determinants of FDI and examine empirically the possible coherent policies for the three regions of China (Eastern, Central and Western) using the spatial panel analysis for the data within the period of 1994 to 2008. The empirical results show that the determinants of FDI vary among the three regions, depending on the motives of the investor and the results of policy bias. The entrepreneurial nature of competition of FDI among the provinces revealed by the spatial FDI factor is a conclusion that cannot be ignored. A more coherent policy on FDI inflows into China is an urgent necessity, though the policies for each region must be, of necessity, different for each of the three regions.   Keywords: Foreign Direct Investment, China, Spatial panel model, spatial variables JEL: F14, C33