ABSTRACT
The Chinese economy has been reasonably stable during the Asian financial crisis. However, there is widespread speculation about the stability of the yuan, the Chinese currency. Will the renminbi (RMB), the Chinese currency, depreciate in the near future? The subject is still receiving attention across the world, even in the post–Asian-financial-crisis period. The crisis was characterized by currency depreciation followed by an economic recession (Table 3.1). During the crisis period (1997–1999) China and Hong Kong were the only two regions that maintained currency stability (Figure 3.1). Since China is the tenth largest trader in the world, and as the size of the Chinese economy is estimated as the second largest in the world by the purchasing power parity standard, 1 if the yuan depreciates, it will inevitably cause a confidence crisis and trigger a new round of currency devaluation in Asia. Consequently, the global economy will be greatly affected. Basic Indicators of Economic Performance of the Concerned Asian Countries in the Crisis Period (1997–1998)
|
GDP growth rate% |
Inflation rate (cpi)% |
Unemployment rate% |
Trade balance $bn |
Current account balance $bn |
Foreign reserves $bn |
Exchange rate change% |
Stock price change, Dec. 31, 1997–Dec. 31, 1998% |
|
|---|---|---|---|---|---|---|---|---|
|
China |
7.8 |
−0.8 |
3.1–20.0? |
43.6 |
24.6 |
145.0 |
+0.09 |
−4.8 |
|
Taiwan |
5.2 |
0.9 |
2.37 |
5.1 |
5.7 |
84.0 |
−18.00 |
−16.8 |
|
Philippines |
1.7 |
10.6 |
13.30 |
−6.8 |
−3.5 |
9.3 |
−29.00 |
−31.0 |
|
Singapore |
1.6 |
−0.4 |
2.20 |
−0.5 |
13.5 |
72.0 |
−15.00 |
−39.5 |
|
Thailand |
−0.4 |
10.0 |
3.70 |
4.8 |
2.9 |
27.0 |
−19.00 |
−39.0 |
|
Malaysia |
−1.8 |
5.8 |
2.90 |
6.4 |
−4.8 |
19.7 |
−33.00 |
−45.4 |
|
Japan |
−3.7 |
0.4 |
4.10 |
113.2 |
106.4 |
222.0 |
−24.00 |
−3.6 |
|
Hong Kong |
−5.0 |
3.2 |
4.20 |
−16.8 |
−6.1 |
96.0 |
0.00 |
−26.9 |
|
Indonesia |
−6.2 |
52.0 |
20.0? |
17.7 |
−5.8 |
18.0 |
−74.00 |
−10.2 |
|
South Korea |
−6.6 |
7.3 |
6.90 |
24.7 |
23.4 |
40.8 |
−31.00 |
−15.6 |
