Zhu Guangyao reviews the 25th anniversary of the Asian financial crisis: strengthen regional financial cooperation and improve the multilateral availability of the "Chiang Mai Initiative"

21st Century Business Herald reporter pays wing to fly Beijing report

On August 19, the "Review and Revelation International Symposium on the 25th Anniversary of the Asian Financial Crisis" organized by the China Development Research Foundation was held in Beijing. Zhu Guangyao, former deputy minister of the Ministry of Finance, published a lesson entitled "Learning from the Asian Financial Crisis and enhanced lessons and enhanced enhancement. The main speech of the 10+3 CPICS Cooperation Mechanism.

Zhu Guangyao reviewed the process of strengthening regional financial cooperation in 10+3 countries, and pointed out that the signing of the "Chiang Mai Initiative" was a milestone in 10+3 countries to strengthen regional fiscal cooperation.

In the face of possible challenges in the future, Zhu Guangyao suggested to further improve the level and efficiency of regional financial cooperation, especially the multilateral availability of the "Chiang Mai Initiative".

The first is to clarify the cost standard for loans as soon as possible. It is recommended to use the comprehensive calculated international currency fund organization and the World Bank Group's international rejuvenation and development bank's functional similar loan interest rate level, and determine the multilateral loan cost of the "Chiang Mai Initiative" not higher than this standard. Considering the urgent needs of some ASEAN countries, the issue should be a good policy reserves before the 10+3 leader meeting held in mid -November.

The second is to pragmatically promote the multilateralized process of "Chiang Mai Initiative".

On the one hand, referring to the practice of international financial institutions such as the World Bank and the International Monetary Fund, the 240 billion US dollars of funds confirmed by the "Chiang Mai Initiative" are divided into capital to be paid and paid capital. The capital can be set to 10%, which is $ 24 billion. Given that the "Chiang Mai Initiative" has increased the terms of the use of the local currency, the actual payment can be included in the local currency. For example, 8%of the 10%paid capital are US dollars and 2%are bonds. In addition, 90%of the capital to be paid was $ 216 billion.

On the other hand, the multilateralized process of "Chiang Mai Initiative" can also be carried out step by step. The first step, referring to the establishment of the 10+3 Macroeconomic Research Office, first established in the form of a limited company, which requires 10+3 governments to approval in terms of procedures. The second step is to upgrade it to international organizations, and the 10+3 Macroeconomic Research Office is transformed into its secretariat to comprehensively improve the level and volume of financial cooperation in East Asia. This requires the approval of legislative agencies of 10+3 countries.

The following is the full text of Zhu Guangyao's main speech:

The Asian financial crisis erupted on July 2, 1997 was a crazy plunder of the wealth of East Asian countries. In 1998, the economic economy of 10 ASEAN and China, Japan and South Korea shrunk, with a total growth rate of zero, the actual consumption level fell by 3%, and the actual investment decreased by 17%. The Hong Kong Special Administrative Region China also experienced a major struggle to defend the status of the international financial center. Although the mainland of China was affected by the decline in exports, the Chinese government adopted an extremely responsible attitude and insisted on not depreciating the renminbi. Economic efforts achieved an 8%growth of 8%, and eventually increased by 7.8%.

The root of the Asian financial crisis lies in the imbalance of macroeconomic economy and the fragility of the financial market in some countries in the region. Although this is the common characteristic of the world's big financial crisis, the difference between the Asian financial crisis is that the sudden interruption of loans and the flow of funds flowing to the flow of funds The rapid changes have magnified the imbalances and vulnerability of the industry. The greed of international speculative funds and omnipotent speculation have accelerated the outbreak of the financial crisis and exacerbated the degree of harm.

Judging from the actual weakness of the East Asian economy at that time, the first was the structural weakness. The impact of deterioration of trade conditions, excessive accumulation and duration of company loans and dual mismatch of currency. The second is the weakness of the macroeconomic. Excessive borrowing short -term foreign debt, fixed exchange rate system, poor development of financial institutions, and lack of supervision. The third is the liberalization of capital accounts. Capital lacks the free flow of supervision and the rapid outflow of short -term funds.

Judging from the speculative methods of international speculators, in Thailand, international speculators impact the Thai baht adopt the means of directly suppressing the spot. Specifically, borrow money in the fund market first, and then sell them in the spot market, driving other investors to follow the trend, forcing the central bank to use foreign exchange reserves to buy the local currency, raising interest rates to increase the cost of speculative financial financing, but this will undoubtedly cause the stock market to cause the stock market Negative impact. The central bank took care of it, the currency depreciated sharply, and the local currency was very cheap. International speculators take the same means to obtain huge profits in the Philippines, Indonesia and other countries.

In Hong Kong, due to Hong Kong's contact rate system based on US dollar liabilities, it has internal stability and adjustment mechanism. At the same time, about 20%of Hong Kong dollars circulate in the Mainland market, so speculative funds have raised a large number of Hong Kong dollars.

After being succeeded in Thailand and other countries, the speculative fund began to impact Hong Kong dollars in late October, using various complex speculative methods to attack in the currency market, foreign exchange market, stock market, and derivative tool market. They expected that the Hong Kong HKMA will definitely increase interest rates and respond to the sales of Hong Kong dollars. The increase in the current interest rate will inevitably lead to the softening of the long -term exchange rate. Therefore, speculative funds first sign a long -term contract with local banks to sell long -term Hong Kong dollars to buy US dollars. Local banks should sell Hong Kong dollars in the spot market for hedging and buy in the spot market. The US dollar is purchased.

The HKMA successfully resisted this offense, and the Hong Kong dollar did not depreciate in the futures market. However, speculative funds also make articles on the Hong Kong stock market. The means is that speculative funds first borrowed stocks from Hong Kong stock custodian institutions -selling Hong Kong dollars on the spot market -Hong Kong HKMA raised interest rates and maintained Hong Kong dollars - Increased interest rates have a negative impact on the stock market. The stock price declines -the purchase of stock funds at low prices will return it to the stock custodian institution and earn huge profits. The huge sales of Hong Kong stock markets have led to fierce fluctuations in the global financial market. On October 27, the New York Stock Exchange had interrupted the transaction twice due to the Dow Jones Index. By early August 1998, the Hang Seng Index fell to 6544 points, and the Assets of Hong Kong dollar depreciated sharply. From August 14th to August 28th, the Hong Kong SAR government used 13%of foreign exchange reserves, that is, $ 12.5 billion in the spot market. Hong Kong stocks, buying the Hang Senging period in the futures market in the futures market, sold the September Hang Seng -period refers to the contract. The 28th is the last trading day of the month, and it must be delivered. On the same day, the Hang Seng Index closed to 7829 points, and the speculators of the short -selling HSI would suffer huge losses, and they had to change the August Index contract to the September Index contract. However, at this time, the difference between the two was as high as 600 points and the difference was 30,000 Hong Kong dollars, which made the cost from August to September contract was very high. In addition, the domestic bonds in Russia in the last week of August caused Soros to lose $ 2 billion, and the international speculative funds had to admit that they were unable to attack the Hong Kong market. Victory, this also marks the end of the Asian financial crisis.

The serious impact of the Asian financial crisis on the regional country economy, coupled with the harsh conditions of the International Monetary Fund for assistance loans, made East Asian countries deeply feel the importance of building a regional financial security network, and the demands of ASEAN countries were particularly urgent. China, Japan, and South Korea officials have also begun to change the situation of rare contacts.

At the second 10+3 leaders meeting in December 1998, China suggested to establish a 10+3 financial deputy meeting mechanism. 10+3 Caifeng officials began to conduct close exchanges on the financial crisis. In the autumn of 1999, the International Department of the Ministry of Finance of the Three Kingdoms of China, Japan and South Korea held the first three opposite meetings at the Beijing Diaoyu Taiwan Hotel to discuss how to learn the lessons of the Asian financial crisis and establish a regional financial cooperation mechanism. Considering the social atmosphere at the time, The meeting was carried out under secret situation. The conference table is placed triangular, which fully reflects the equal relationship of the three parties. The meeting discussed the regional financial cooperation. After the meeting, the officials between China, Japan and South Korea, and officials between China, Japan and South Korea, and Fiscal and Gold officials from China, Japan and South Korea and ASEAN countries launched a intensive consultation work to establish a 10+3 regional fiscal and gold cooperation mechanism. The 10+3 Treasury Secretary on May 4, 2000 signed the "Chiang Mai Initiative" designed to establish a regional currency exchange network. Its content includes four aspects: monitoring capital flow, monitoring regional economy, establishing bilateral currency exchange networks, and personnel training.

In 2007, the 10+3 Treasury Secretary decided to use the regional foreign exchange reserve library of self -management as the specific content of Chiang Mai's initiative; in 2008, it was decided to set the starting scale of the regional foreign exchange reserve to $ 80 billion. In 2009, it expanded in 2009 To $ 120 billion, it expanded to $ 240 billion in 2012. The proportion of China, Japan and South Korea and ASEAN countries has 80%and 20%. Among them, China -Japan contributions are 32%, the capital contribution is US $ 76.8 billion, South Korea's capital contribution is 16%, the capital contribution is 38.4 billion US dollars, the investment ratio of the Ten ASEAN countries is 20%, and the contribution is 48 billion US dollars. Policy tools include: first to perform emergency rescue when the economic crisis of member states appears; the other is as a crisis prevention loan instrument.

In 2021, the 10+3 Treasury Secretary and the central bank's president decided to increase the terms of the local currency capital capital and increased the proportion of decoupled with the IMF loan policy to 40%. In order to support Chiang Mai's initiative to propose multilateralization and strengthen regional economic monitoring, ASEAN and China, Japan and South Korea established a 10+3 macroeconomic research office. In 2011, it was established in the form of a limited company and upgraded into an international organization in 2016.

On the 25th anniversary of the outbreak of the Asian financial crisis, we review the course of the victory over the crisis, which is to prevent the new financial crisis that may occur in history. The signing of "Chiang Mai Initiative" is a milestone in 10+3 countries to strengthen regional fiscal cooperation. In the face of possible challenges in the future, we should further improve the level and efficiency of regional financial cooperation, especially to improve the availability of Chiang Mai's initiative. The specific suggestions are as follows:

First, clarify the cost standard for loan use as soon as possible. It is recommended to use the comprehensive calculated international currency fund organization and the World Bank Group's international rejuvenation and development bank's functional similar to loan interest rate level, which is not higher than that of this standard. Considering the urgent needs of some ASEAN countries, the issue should be a good policy reserves before the 10+3 leader meeting held in mid -November.

Second, pragmatic advancement of Chiang Mai's initiative to multilateralize the process.

1. With reference to the practice of international financial institutions such as the World Bank and the International Monetary Fund, the US $ 240 billion in funds confirmed by Chiang Mai's proposal are divided into capital to be paid and paid capital.It is 10%, that is, $ 24 billion. In view of the addition of the clause of the use of the local currency in Chiang Mai, it can include the local currency.currency.In addition, 90%of the capital to be paid was $ 216 billion.2. Chiang Mai advocates a multilateral substantive process. In the first step, referring to the establishment of the 10+3 Macroeconomic Research Office, it is established in the form of a limited company. This requires 10+3 in the procedure.Governments of various countries can be approved.The second step is to upgrade it to international organizations, and the 10+3 Macroeconomic Research Office is transformed into its secretariat to comprehensively improve the level and volume of financial cooperation in East Asia. This requires the approval of legislative agencies of 10+3 countries.

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