Laurence Lau, recognising a funding crunch, says layoffs will be studied The council of the Chinese University yesterday appointed Stanford University economist Lawrence Lau as vice-chancellor. He will begin his six-year term in July. The incumbent, Ambrose King Yeo-chee, who took over from Arthur Li Kwok-cheung last year, will stay on until Professor Lau takes up his appointment. Council chairman Lee Hon-chiu said Professor Lau could not take up his post earlier due to his work at Stanford, where he is the Kwoh-Ting Li Professor of Economic Development. Professor Lau, 59, said his new position would present challenges given that the government was expected to cut funding for higher education. He said careful study would be needed before decisions were made about pay cuts or layoffs. 'We will try to minimise the blow to staff,' he said. 'We also need to adapt to the reality that public funding for the sector is more likely to decrease rather than increase.' Keeping staff morale high so the university could attain its goal of becoming a world-class institution was another challenge, he said. To achieve that status, the campus would need to become more international and attract more foreign students, Professor Lau added. On the issue of the institution's possible merger with the University of Science and Technology, he said he would support it 'if it results in a win-win situation for the parties involved'. Professor Lau is an expert in the Chinese and other East Asian economies and developed one of the first econometric models of China. It is known he was consulted by former president Jiang Zemin, but he was tight-lipped yesterday about his relationship with mainland officials. He would not even say whether he personally knew President Hu Jintao and Premier Wen Jiabao. A special committee has been formed under the university's council to determine the terms of employment for Professor Lau. Mr Lee said the professor would be taking a big pay cut. The Student Union, which had demanded the appointment be delayed, said it was not surprised by the council's decision.