Anybody have an opinion of the impact of this news on ASND (and the rest of the market) next week? China has so far been excluded from the Asian contagion.
Saturday March 7, 2:38 am Eastern Time
Asian financial crisis looms over China
By Benjamin Kang Lim
BEIJING, March 7 (Reuters) - Chinese President Jiang Zemin has warned that the negative impact of the Asian financial crisis on China's economy should not be
underestimated, the China Daily said on Saturday.
China has remained largely unscathed from the crisis, but the regional financial turmoil was expected to take its toll on the world's most populous nation this year.
Central bank governor Dai Xianglong told a news conference on Saturday the crisis would slow the growth of China's foreign exchange reserves, exports and use of
foreign capital.
Jiang, who also holds the top jobs in China's Communist Party and the military, told a parliamentary group discussion on Friday that the Asian financial crisis has
''lasted longer than expected,'' the newspaper said.
''China has not been seriously affected,'' Jiang said. ''But we should have a correct understanding of the situation. We should not underestimate its negative impact
on our economy.''
''We should see both its challenges for our economic development and opportunities it may bring us,'' the newspaper quoted Jiang as saying. He did not elaborate.
''We should be confident that we can fend off the crisis, consolidate the current good situation at home and seek further development as long as we follow the
principles decided by the central authorities,'' Jiang said.
Dai, governor of the People's Bank [Nasdaq:PBCT - news] of China, said China's foreign exchange reserves would grow at a slower rate this year because of the
crisis.
China's reserves stood at $139.9 billion at the end of 1997, representing an increase of $34.9 billion on a year earlier. It was $140.3 billion at the end of February.
Weaker currencies in Southeast Asia were expected to cut into China's exports and foreign investment, but Chinese leaders have pledged not to devalue the local
currency.
Dai said he was ''not overly optimistic'' about exports this year but that 8-10 percent growth was ''entirely achievable.''
China's exports grew a whopping 20.9 percent in 1997.
The governor said China was expected to register a slight trade surplus or balanced foreign trade in 1998.
China registered a surplus of $40.3 billion in 1997 on exports of $182.7 billion and imports of $142.4 billion.
Dai said direct foreign investment (FDI) would fall but would be at least $30 billion. China's FDI rose 8.5 percent to $45.3 billion in 1997.
Wary of social unrest, President Jiang said the government should look after workers laid off from ailing state-owned enterprises.
Millions were expected to be out of a job after the Communist Party endorsed at a pivotal congress last September Jiang's bold plan to overhaul the lumbering state
sector through mergers, stock sales and bankruptcies.
Jiang called for re-employment programmes to provide jobs for laid-off workers, the newspaper said.
''Re-employment programmes have a direct bearing on the success or failure of state enterprise reform and must be put on the agenda of party committees and
governments at all levels,'' Jiang said.
''Strenuous efforts should be made to develop collective, self-employed and private businesses and support medium and small enterprises so that they can provide
more jobs,'' he said.
Jiang cautioned against state enterprises laying off both husband and wife, the newspaper said.
He said China's top priority was to boost the economy and ensure that development was fast and healthy, it said without giving further details. |
