tailieunhanh - WORKING PAPER NO. 45CHINESE MERCANTILISM: CURRENCY WARS AND HOW THE EAST WAS LOSTSURJIT

Tham khảo sách 'working paper no. 45chinese mercantilism: currency wars and how the east was lostsurjit', kinh doanh - tiếp thị, quản trị kinh doanh phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | WORKING PAPER NO. 45 CHINESE MERCANTILISM CURRENCY WARS AND HOW THE EAST WAS LOST SURJIT S. BHALLA JULY 1998 INDIAN COUNCIL FOR RESEARCH ON INTERNATIONAL ECONOMIC RELATIONS CORE-6A 4th floor INDIA HABITAT CENTRE LODI ROAD NEW DLEHI-110 003 Foreword The Asian financial crisis has generated a lot of research analysis and debate. The exact causes of the crisis are not firmly established although various hypotheses have been offered. This paper presents one view of the genesis of the East Asian crisis. Several explanations are examined managed exchange rates over and undervalued currencies crony capitalism asset bubbles Japanese devaluation or too much capital account liberalization. A large part of the analysis centers around the proposition that the regime of managed exchange rates was at the core of the problem. In addition the paper offers an additional contributory cause of the crisis - China s mercantilist policy. The role of the international system in allowing China to devalue its currency by over 50 percent despite burgeoning trade surpluses is also addressed. The paper also explores the question of whether the Chinese economy needed any devaluation in the early nineties. I have no doubt that this paper will provoke debate and contribute to a better understanding of an issue which is occupying the minds of most policy makers around the world. Isher Judge Ahluwalia Director Chief Executive ICRIER New Delhi 2 Table Of Contents Table Of CHINESE MERCANTILISM .4 CURRENCY WARS AND HOW THE EAST WAS 1. INTRODUCTION. 4 2. CHINA DEVALUATION AND MERCANTILISM - SEEDS OF A a. The b. The c. Genesis of the Crisis - Did China need to devalue the yuan in 1991-93 .8 d. The Importance of Chinese i China vs. Greater China ii Export and Import iii The e. Summarizing the Macro f. The Micro g. Did Devaluation Hurt Chinese Imports and Asian Exports .14 h. .