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Countering contagion: Does China's experience offer a blueprint?

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Listed:
  • Alan G. Ahearne
  • John G. Fernald
  • Prakash Loungani

Abstract

China did not succumb to the Asian crisis of 1997-99, despite two apparent sources of vulnerability: a weak financial system and increased export competition from the Asian crisis economies. This article argues that both sources of vulnerability were more apparent than real. China's experience (especially its use of capital controls) does not offer a blueprint for other countries, because other countries would not want to replicate China's inefficient, non-market-oriented financial system.

Suggested Citation

  • Alan G. Ahearne & John G. Fernald & Prakash Loungani, 2001. "Countering contagion: Does China's experience offer a blueprint?," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q IV, pages 38-52.
  • Handle: RePEc:fip:fedhep:y:2001:i:qiv:p:38-52:n:v.25no.4
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    References listed on IDEAS

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    1. Anuradha Dayal-Gulati & Valerie Cerra, 1999. "China's Trade Flows; Changing Price Sensitivies and the Reform Process," IMF Working Papers 99/1, International Monetary Fund.
    2. Bonin, John P. & Huang, Yiping, 2001. "Dealing with the bad loans of the Chinese banks," Journal of Asian Economics, Elsevier, vol. 12(2), pages 197-214.
    3. John Fernald & John H. Rogers, 2002. "Puzzles In The Chinese Stock Market," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 416-432, August.
    4. Borensztein, Eduardo & Ostry, Jonathan D, 1996. "Accounting for China's Growth Performance," American Economic Review, American Economic Association, vol. 86(2), pages 224-228, May.
    5. Gordon, Roger H. & Li, Wei, 2003. "Government as a discriminating monopolist in the financial market: the case of China," Journal of Public Economics, Elsevier, vol. 87(2), pages 283-312, February.
    6. John G. Fernald & Oliver D. Babson, 1999. "Why has China survived the Asian crisis so well? What risks remain?," International Finance Discussion Papers 633, Board of Governors of the Federal Reserve System (U.S.).
    7. Kalpana Kochhar & Prakash Loungani & Mark R. Stone, 1998. "The East Asian Crisis; Macroeconomic Developments and Policy Lessons," IMF Working Papers 98/128, International Monetary Fund.
    8. Michael Mussa & Giovanni Dell'Ariccia & Barry J. Eichengreen & Enrica Detragiache, 1998. "Capital Account Liberalization; Theoretical and Practical Aspects," IMF Occasional Papers 172, International Monetary Fund.
    9. John G. Fernald & Hali J. Edison & Prakash Loungani, 1998. "Was China the first domino? assessing links between China and the rest of emerging Asia," International Finance Discussion Papers 604, Board of Governors of the Federal Reserve System (U.S.).
    10. Andrew Berg, 1999. "The Asia Crisis; Causes, Policy Responses, and Outcomes," IMF Working Papers 99/138, International Monetary Fund.
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    Citations

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    Cited by:

    1. Zhang, Yin & Wan, Guanghua, 2007. "What accounts for China's trade balance dynamics?," Journal of Policy Modeling, Elsevier, vol. 29(6), pages 821-837.
    2. Zhang, Yin & Wan, Guanghua, 2008. "Correcting China's trade imbalance: Monetary means will not suffice," Journal of Policy Modeling, Elsevier, vol. 30(3), pages 505-521.
    3. Alan G. Ahearne & John G. Fernald & Prakash Loungani & John W. Schindler, 2003. "China and emerging Asia: comrades or competitors?," Working Paper Series WP-03-27, Federal Reserve Bank of Chicago.

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