However, the middle-kingdom beat the odds. Although the Asian flu effected China on both its external trade account and external capital account, nevertheless, like the Great Wall, China not only remained conspicuously insulated from the region-wide financial meltdown of unprecedented severity, the mighty dynamo fueling its economy missed only a few beats during the crisis and since.3 China’s ability to sustain a strong gross domestic product (GDP) growth performance of 8.8% in 1997 and 7.8% in 1998 and over 8.0% in 1999,4 continued success in attracting foreign direct investment (FDI)5 and in running healthy current account surpluses (roughly 3% in 1998-99), and maintaining the stability of its currency, the RMB (renminbi), in the face of plummeting currency devaluations and precipitous asset price deflation elsewhere in the region and beyond, is simply miraculous.6 In a region where China’s intentions are viewed with much suspicion, the PRC’s handling of the crisis has earned it much plaudits. Chuan Leekpai, the Prime Minister of Thailand has, on more than one occasion publicly thanked China for maintaining the value of the renminbi and for contributing US$1 billion to the IMF package for Thailand. Similarly, Singapore’s minister for information, the indefatigable George Yeo, while accusing Japan of abdicating its global responsibilities, noted that “the determination of the Chinese government not to devalue the renminbi in order not to destabilize Asia further will long be remembered”7.
