The larger impact Euro to have, the more pressure is on Japanese
to prop Asian cooperation and Yen...The weakness in Dollar, IMO
may affect Japan more than even USA..
Separatly, China story continues...
Asian Financial Crisis Looms Over China
07:47 a.m. Mar 07, 1998 Eastern
By Benjamin Kang Lim
BEIJING (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 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 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 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 programs to provide jobs for laid-off
workers, the newspaper said.
''Re-employment programs 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.
Copyright 1998 Reuters Limited. All rights reserved. |
