January 12–13, 1999
Co-hosted by the World Bank and
The Institute of Southeast Asian Studies
Abstracts of Papers Presented
The Greater China Growth Triangle in the Asian Financial Crisis
Y.Y. Kueh, Lingnam College
This paper analyzes the process and pattern of economic interaction within Greater China (consisting of China, the Hong Kong SAR and Taiwan (China)), noting that the magnitude of trade and financial flows between the three economies suggest a high level of interdependence. Capital and trade flows within Greater China have as yet been little effected by the Asian financial crisis, but all three governments responded to the crisis with strong interventions to protect exchange rates. The paper focuses on the major monetary and fiscal policy measures that were used to protect the economies from financial contagion. It goes on to argue that the Asia crisis will have little long-term impact on capital and trade flows within the Greater China economic growth triangle. The paper concludes by studying methods for the three economic entities to cooperate with each other, formally or informally, with a view to enhancing economic stability both within Greater China and from a regional and global perspective. It notes that the extent of such cooperation is likely to remain largely a political question, but it will be given a boost by the early accession of China to the WTO.