🖤 Donations of all sizes power our public service journalism Give Now

China watching foreign cash flow

Marketplace Staff Jul 2, 2007
HTML EMBED:
COPY

China watching foreign cash flow

Marketplace Staff Jul 2, 2007
HTML EMBED:
COPY

TEXT OF STORY

Doug Krizner: Ten years ago today Thailand’s currency collapsed. It triggered what became known as the Asia Financial Crisis, the biggest economic meltdown in East Asia since World War II. The International Monetary Fund stepped in to help. Some say it made matters worse with its controversial remedies. But for one Asian country it was an opportunity. From Shanghai, Bill Marcus reports.


Bill Marcus: Imagine waking up and finding the payments due on your credit card have multiplied by a hundred. That’s what happened to businesses in countries like Thailand, Malaysia and Indonesia.

IMF loans meant to help ended up jacking up interest rates and making corporate debt so expensive, businesses failed and people lost jobs.

All that investment had to go somewhere. A lot of it went to China. One result is today, China’s the No. 1 destination for foreign direct investment among developing nations.

But Fudan University finance professor Sun Li Jian says the country is still looking over its shoulder.

Sun Li Jian (voice of interpreter): We’re starting to worry that the situation in Southeast Asian countries is developing in our country. Some foreign companies have left for India and Vietnam, because China’s taxes and labor costs are rising.

Sun says China’s tight rein on its economy is a necessary modernization. When the collapse hit Indonesia, its 92-year-old bankruptcy code was still on the books in Dutch.

In Shanghai, I’m Bill Marcus for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.