China_Staves_Off_Devaluation

China Staves Off Devaluation China Staves Off Devaluation Introduction China has come to the forefront of the international finance scene following the East Asian financial crisis for two reasons. First, the post reform Chinese economy closely resembles the other East Asian countries. China experienced significant levels of growth led by exports, with a rapid expansion in labor-intensive exports in its early stage of development. Rapid growth was accompanied by a rapid increase in domestic savings and massive inflows of foreign capital (Perkins, 1986). The banking sector dominated financial intermediation and the ratio of non-performing loans was high. Estimates put non-performing loans at China's four leading banks at 25 per cent -- far higher than in South Korea or Thailand before they fell prey to the Asian contagion. Would China be the next victim of the crisis' (Dornbusch, 1997). The second reason why China came to the forefront of the international finance scene following the East Asian financial crisis is China’s economic performance became the key to the current economic stability of East Asia. During 1997 - 1998, China was the only country in the region to sustain significant growth. In particular, maintaining the stability of the renminbi, china, currency, foreign, exchange, trade, chinese, exports, rate, china’s, system, economy, renminbi, percent, economic, capital, government, export, international, crisis, controls, asian, growth, devaluation, countries, under, billion, bank, 1998, financial, rates, policy, market, imports, conditions, china's, balance, world, transactions, through, import, enterprises, dollar, devalue, been, banks, usd, state, stability, significant, reform