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Lessons learned from Asian Financial Crisis


03-22-2017 13:54 BJT

(Source: CGTN)

It's been almost 20 years since the Asian financial crisis. As bad as it was for the region, what positive changes did it bring about, and what did the various Asian economies learn from it?

Starting in Thailand with the collapse of the country’s currency, before spreading throughout the continent, the 1997 financial crisis shocked investors around the globe and triggered extensive economic unrest.

The impact was devastating, but it did force substantial changes in how the financial markets were run.

Asian countries are now able to withstand stronger turbulences -- this has largely been attributed to adjusting exchange rates from fixed to floating, the build-up of foreign-exchange reserves, and other structural reforms.

The crisis also helped Asian countries to become more integrated through regional cooperation. But some experts believe the ongoing cooperation mechanisms aren't enough...

"The progress of Asian economic cooperation in the aspects of trade, production, finance, and synchronization of fluctuation are falling back, its importance for Asian leaders to increase the sense of community and to intensify their efforts to cooperation for group," Lin Guijun, vice president of University of Int'l Busines & Economics, said.

So to help the region’s economy become more defensive, sound and dynamic, Asian countries reached a consensus to further enhance their integration. Some experts believe, that in this process, China should play multiple roles.

"China has been acting as an initiative organizer by founding the One belt-One road initiative and the Asian Infrastructure Investment Bank. China can also share its extensive experience in infrastructure construction. Plus the country’s foreign exchange reserves also enable it to provide financial support to other countries," Wan Zhao, chief analyst with Global Markets Department, China Merchant Bank, said.

The economic environment for Asian countries after the crisis has not eased, but their economic performance has strengthened greatly. This is because their economic fundamentals have improved, their financial stability has been enhanced, with policies becoming more flexible ... But also playing a key role is the strengthening communication and coordination among Asian countries to ensure that no country is fighting alone, the nations are working as a united community to tackle challenges, risks, ups and downs.

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