Thursday 19 Jul 2018 | 10:40 | SYDNEY
Thursday 19 Jul 2018 | 10:40 | SYDNEY

The real Asian crisis


Malcolm Cook

5 February 2009 15:21

I lived through the Asian financial crisis in 1997-1998 and watched my Philippine peso salary halve in dollar terms while I gazed at a row of unfinished buildings on the main drag in Makati financial centre. Yet 'Asian financial crisis' always struck me as a misnomer, as it was more a Southeast Asian/South Korean crisis with Japan, China, Taiwan and even Singapore only suffering collateral damage. The Japanese economy by itself is three times larger than the four economies at the centre of that crisis. Moreover, East Asia’s export-oriented growth model was not under challenge. Rather, it helped guarantee the V-shaped recovery from 1999.

The present global crisis, despite its origins in the far-off Atlantic, is posing the whole of Asia, and its continued reliance on export-led growth, a more significant challenge. The growth rates of China, Taiwan, Japan, Singapore and India are falling faster, with Japan facing its worst recession since World War II. China, Japan, Singapore and Taiwan may suffer larger crisis-aided falls in growth, in absolute terms, than the US, the epicentre of the crisis.

For more of my views on how the crisis may play out in China, please see the opinion piece I wrote last weekend for the Sydney Morning Herald.