The Analysis Of The Restrictive Factors And Causes Of Economic Recovery In East Asia

It has passed 10years since the Asian financial crisis, but we should never forget the lessons it left to us, in order to prevent it from happening again .the Asian financial crisis in 1997 caused harm to the four dragons and the four tigers of Asia in different degrees. The market of the stock and the foreign exchange drop sharply, the large volume capital run away which made the economy in this district nearly breakdown. The economies which have created the East Asia miracle fell into crisis so quickly that some one thinks that the miracle has gone. These countries and the districts will stay in the dilemma in the long run. To our surprise, most of the economies which were wounded deeply return to the revival road so they did not fall into the depression like the 1930s. Especially for Korea, it revived strongly; the other countries also did moderately well. The East Asia became the area which develops fastest in the world again. The author analyzes its causes in two aspects: the positive harness of the crisis and the improved external environment which enhance the revival. First after the happening of the crisis, the government of the economies which were harmed badly took precautions and harnesses the crisis positively. Among them, in order to avoid the worse situation, the Malaysian government stops the deal of the foreign exchange; Korea and Thailand both encouraged their citizen to love their own money, and this made the basis of the appreciation. The stabilization of the economy situation leads these countries to begin their reconstruction, which included the reorganization of the financial sector and the extension policy that enhance the employment rate. Second, the help from the international society also made contributions to the revival of the crisis; especially the support of the IMF played an important part in the stabilization and the reconstruction of these economies. Both the internal management and the external aid proved that in the crisis the government intervention is necessary; furthermore, with the development of the economy globalization, it is important to take close international cooperation. The crisis did not lead to the depression; one of the main reasons is the stabilization of the America economy whose growth hastens the revival of the East Asia economies. As the indicator and the engine of the world economy, the USA's place can not be replaced, if the America sneeze, the east Asia will have a cold; as the developing country who develop most fast, China take the responsibility of a big country when the financial crisis by keeping the value of RMB, which avoid the vicious cycle of the competing devaluation in this area. In the meantime the Chinese government took the stimulate policy to expand the internal demand, and this pull the other country to revive. Japan has experienced the ten missing years in the 1990s, in the new century the Japanese government took some measures to stimulate its economy and received some effects. Its economy began to recover, and this made Japan to increase the import from the other East Asian countries and the investment to these countries. It helped those countries recover. Finally, the recovery of the east Asia can not be away from the regional cooperation in this area: on the one hand, with the building of the free trade area in the ASEAN, the internal trade develop quickly, which reduce the dependence on the external market; on the other hand, the cooperation of the whole east Asia became more and more closely. Both the trade and the finance cooperation inject the strength to this area.During the ten years'development, the countries and the districts in this area return to the level of the pre-crisis, and some make further development. But from the process and the causes of the recovery, we can see that there are still some restrictive factors on the East Asia economy, to which we should pay attention. First, most east Asia economies still depend on the model–large input and large output, but in the modern world, the resources is decreasing too quickly to meet the need of these countries and the environment pollution has a bad effect on the economy, so the growth pattern of the east Asia can not produce effective results, it is necessary to change the growth pattern which need the great effort to pay off. Second, since the 60sand 70s most east Asia economies gain high growth rate that was called the miracle by the world bank, but we have to realize that this depend on the external demand seriously, especially on the America market, for example the demand of the America reduce sharply in 2001, this caused a frustration to the recovery of the east Asia economy, and this trend will continue. Third, the future of the East Asia integration is not bright and there is a lot of work for these countries and districts to do.