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Do increases in China's exports reduce exports of other emerging Asian economies? We find that correlations between Chinese export growth and that of other emerging Asian economies are actually positive (though usually not significant), even after controlling for trading-partner income growth and real effective exchange rates. We also present results from a VAR estimation of aggregate trade equations on the relative importance of foreign income and exchange rates in determining Asian export growth. Although exchange rates do matter for export performance, the income growth of trading partners matters even more. In addition, we examine specific products and find evidence that a considerable shifting of trade patterns is taking place, consistent with a ‘flying geese’ pattern in which China and ASEAN-4 move into the product space vacated by the NIEs. Our results suggest that China and emerging Asia are both comrades (overall) and competitors (in specific products). [ABSTRACT FROM AUTHOR]

The authors explore features of China's financial system that helped protect it from the crisis, and then try to determine whether China has avoided a crisis or simply deferred it. Pressures generally force rapid adjustment when institutions are insolvent. These mechanisms do not operate fully in China in a market-oriented system. The strength of these external fundamentals would possibly preclude a self-fulfilling country run on China, even in the absence of capital controls. The authors examine why China has performed so well, focusing on aspects of China's financial system that may have helped protect it from a crisis. This working paper can be found at the US Federal Reserve Board's International Finance Discussion Papers. You can access this by going to

Some critics have argued that China's devaluation may have contributed to the Asian financial crisis in 1994. The authors of this paper claim that the devaluation was not economically important. More relevant was the exchange rate, as it was a floating rate that was not devalued, and high Chinese inflation has led to a very sharp real appreciation of the currency. There are findings of export competition, that in the period of about 1989 to 1993, China's exchange rate depreciated sharply. In turn, Chinese export growth exceeded that of other Asian economies, and the make up of Asian exports changed significantly. China's economic growth is likely to slow because of increased trade competition as a result of the devaluation of other Asian currencies, and because of reduced capital inflows. This working paper can be found at the US Federal Reserve Board's International Finance Discussion Papers. You can access this by going to