East Asia and China: vulnerabilities at the outset of a new millennium

Abstract

East Asia has bounced back from its crisis of 1997-98 faster than most of us would have predicted at this time last year. It would be easy at a gathering like this for us to pronounce the region's problems over and done with, and to project the optimistic growth data of 1999 into the new millenium. But that would be too easy and it would be wrong. It would be too easy because it would cause us to relax our efforts to reform financial, structural and governance arrangements, both here in the borrowing countries of East Asia, and elsewhere in the lending countries of Japan, Europe and (vis a vis East Asia) North America. And it would be also be wrong to be too optimistic because there are some dark clouds still hanging over Asia. In short, I want to say something about on-going vulnerabilities.