|
Southeast Asia Financial Turmoil: Impacts on
and Lessons to China
FAN Gang
Prof. Of Economics, Chinese Academy of Social
Sciences
Director, National Economic Research Institute,
China Reform Foundaion
I. China is not going to be the next domino
Since the Southeast Asia financial turmoil
broke up, people have kept asking if China would
be the next “domino” when they observe that
China shares some similar structural problems
with its neighboring smaller “tigers” such as
amounted non-performing assets of state banks,
government intervention in financial market,
the bubbles in real estate market, and seemingly
over-lasted high growth.
It is true that China’s economic system is
full of problems, some of which may be even
more serious than those in other economies.
But there are following two major differences
between China and some of its Southeast Asian
neighbors:
First, unlike the others, China is yet to fully
open its financial market. Investment by foreigners
in the security market is still limited to B
shares; Chinese currency is not convertible
on capital account; only a few foreign banks
are allowed to operate RMB business in China
in certain regions, and there is no foreign
off-shore banks operating in China. As the results,
China has only a very small proportion of portfolio
investment in its US$320 billions total accumulated
foreign capital inflow which are mostly put
into manufacturing industries, and only less
than 10% short-term borrowings in its US$116
billion foreign debt. This of course excluded
China from being benefited from the free flow
of international capital, but also makes China
less vulnerable to the international market
speculation for the moment.
Second, maybe more important, China started
its macroeconomic retrenchment and market correction
process since late 1993 by itself, rather than
being forced to do so by some foreign forces.
As the results, the “soft-landing” has been
achieved with most of internal and external
balances restored. Bubbles in most regional
real estate market (Hanan, Beihai, for instance)
burst out dramatically. Inflation has been falling
down from 24% in 1994 to -0.4% yoy in October,
1997; trade surplus and current account surplus
have been increasing since 1993, and foreign
reserve continues to grow and is estimated up
to US$140 billion by the end of 1997. In some
sense, it might be “excessively good”.
II. Likely Impacts on China: Medium- and long-Terms
Inflow of Foreign Capital
The second possible negative impact is on the
foreign direct investment. In short- and medium
terms, while the currently stable Chinese economy
seems to stand as a more attractive center for
Western capital, the investment from the region,
such as Korea and Hong Kong, seems to be decreasing
due to the market adjustment.
On the other hand, international investors’
confidence in Asian economic growth needs some
time to recover. The uncertainty raised from
the recent financial turmoil is already pushing
some investors away from Asia. Some of them
would at least wait and watch for a while. For
a country like China which received FDI as about
20% of its total fixed assets investment in
the past would suffer if the capital inflow
drops in substantial way. To construct and develop
sound-operated domestic capital markets and
to enhance the domestic saving rate should become
more urgent agenda for Chinese policy makers.
要参阅论文全文，请 email 至 coolbee@online.sh.cn
|
