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Unit_Five_Asia's_Economic_Crisis_and_Changing_Competitiveness_in_the_World_Market(经贸高级英语)

发布时间:2014-01-27 16:53:56  

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market
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TEXT Economic Crisis Ends Years of High Growth

Asian countries achieved outstanding economic performance for several decades before the economic crisis occurred. The annual GDP growth rate in ASEAN averaged close to 8 percent over the last decade. Per capita income levels in Asia have increased remarkably, with Korea accomplishing a nearly ten-fold rise occurring over the last 30 years. Asian developing countries attracted almost half of the world total capital inflows and their share in world exports has nearly doubled reaching almost one-fifth in the last decade. For all these reasons, the developing and emerging market economies of Asia have been a major engine of growth in the world economy.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market

The causes of the currency crisis that erupted in Thailand in the summer of 1997 and then spread to neighboring countries, are various and differ for each country. For Korea and Japan the main problems pointed out as causes are the structural weaknesses, especially in their financial systems. For the past several years both countries have experienced recessions and Japan’s growth, in particular, has been very modest since the early 1990s. In contrast, the Southeast Asian countries such as Thailand, Indonesia, the Philippines and Malaysia were enjoying rapid economic growth but had developed large external deficits and also suffered from extremely fragile financial sectors. However, China, Hong Kong, Taiwan and Singapore, considered the great Chinese economic bloc, have been enjoying rapid growth and very strong external positions that include large trade surpluses and very sizable foreign exchange reserves.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market The Crisis Is Not Over Various policy measures have been announced and executed in Thailand and Korea, both of which have strictly adhered to IMF-supported programs. The Thai baht has shown a relatively stable trend owing to the government’s strong economic reform drive. The Korean economy is also recovering after implementing a severe macroeconomic policies that was promised in exchange for receiving a multilateral financial bailout package. Malaysia is coping with its currency and financial crisis alone, without rescue funds from the IMF, by decreasing the growth rate and delaying big projects.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market Indonesia has faced increasingly difficult economic problems in light of its complicated domestic political disorder. Indonesia fell out of favor with multilateral lenders and supporters including the IMF, World Bank, the U.S. and Japan, among others, by planning a 33 percent increase in budget expenditures and by trying to introduce a new currency regime, the currency boards like those in force in Hong Kong and A

rgentina. Revised arrangements were settled between the Indonesian government and the IMF on April 8 this year. The future of the Indonesian economy does not warrant optimism in the short-term.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market While the Asian economy regained stability from impending economic collapse in the later part of last year, the possibility of devaluation of the Chinese yuan and the rapid depreciation of Japanese yen will be important variables affecting the recurrence of similar economic crises in Asia. Though the Chinese government has denied having any plans to devalue its currency, it may be difficult for China’s policymakers to resist the temptation to devalue the yuan if Chinese exports suffer a sharp decline of price competitiveness in comparison with other Asian countries. In China, there is excessive investment in all the industries and serious debt incurred by the state-owned enterprises, the core of the Chinese economy. The possibility of the yuan devaluation would be higher if China’s exports decrease and the Japanese yen value continues its descent.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market The recent depreciation of the yen was brought about by the slump in the Japanese domestic market and the delay of financial and banking system reforms. Japan will not fall victim to an economic crisis because of its foreign exchange reserves of 220 billion dollars and the recently announced demand management policy of 16 trillion yen. There is a possibility that a further drop in the value of the Asian currencies could lead to the yen’s sharp decline and this, in turn, would result in the recurrence of a currency crisis in the Asian countries.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market Competitive Positions and Relations Among Asian Countries Likely to Change The economic crisis in Asia and the fall in currency values have affected the competition among countries in the world markets through a change of competitive factors such as the exchange rate, interest rate, and real wages. Also, Asian countries’ economic fundamentals have changed. The price competitiveness of Korea, Thailand, Indonesia, the Philippines and Malaysia jumped due to the average 42.1 percent depreciation as of April this year compared to June last year. The crisis affected the value of neighboring countries including Japan, Singapore and Taiwan, who underwent a 14, 12 and 15 percent depreciation in the same period respectively.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market As shown in the table provided, if the exchange rate of the Korean won to the US dollar is 1 400 and the values of the other currencies do not change, the Korean won depreciates 25.6 percent against the Japanese yen, 36.6 percent against the Chinese yuan, 25 percent against the Taiwanese dollar and 27.5 percent again

st the Singapore dollar. Thus, Korea would be in a more advantageous position than its Asian rivals in terms of price competitiveness. Until the won hits 1 300 to the US dollar, Korea can maintain its competitiveness in the world market. The currencies of Thailand, Malaysia and the Philippines depreciated nearly the same relative level as Korea’s currency. The Indonesian rupiah depreciated the most of all the currencies.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market However, the continuous depreciation of the yen and the devaluation of the yuan could greatly influence the price competitiveness of the Asian countries involved in the currency crash. That is, Asian countries with a devalued currency will not enjoy any improvement of price competitiveness if a sharp depreciation of the Japanese or Chinese currencies occurs. The sudden fall of either of these two currencies would cause the Korean economy to fall into a deep recession due to the additional depreciation of the won and heightened interest rates than those that are presently wreaking havoc on businesses, especially smaller firms. In the overseas market, Korea competes with Japan in the area of semiconductors, shipbuilding, automobiles, electronics and competes with China in the area of textiles, garments, and electronics.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market Difficulties in Increasing Export Earnings The Asian countries’ deep recession, high interest rates, financing difficulties, and high inflationary pressure, prevent them from taking advantage of depreciation to increase export earnings. Indonesia, Thailand, and Korea, under the severe conditions stipulated by the IMF rescue package, are also suffering from unemployment, decreasing real wages, rapid asset deflation as well as their currency depreciation. While these hardships have been difficult for all the nations and their peoples to deal with, they are simultaneously opportunities for the countries to enhance their competitiveness and, accordingly, increase export earnings. It seems to be difficult, however, for countries to take advantage of the favorable factors of the crisis. The high interest rate policy and instability of the financial and banking markets have caused successive numbers of bankruptcies and the increasing share of idle manufacturing facilities, factors which reduce the potential gains in exports.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market During the ten months since the outbreak of the East Asian currency crisis, interest rates increased sharply by 8.6 percentage points in Korea, 20 in Indonesia, 4.6 in Malaysia, 6.5 in Thailand, and 6.6 percentage points in the Philippines. Another reason why the sharp depreciation in Asian currencies has not coincided with an increase in the region’s exports is related to the instability of the trading system which includes a decrease of expo

rt financing and the difficulty of opening L/Cs (letters of credit) to import raw materials for export processing. Firms are still not finding it easy to finance their businesses owing to distortions of financing and the banking system, the insolvency of banks or other kinds of credit institutions, and the overall recession which has frozen

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market the domestic consumer market. Moreover, the lessened international investor confidence has curtailed the ability of these afflicted economies to borrow money in the international financial market. Enterprises of countries mired in the currency crisis are being asked to lower their unit export prices by foreign buyers, resulting in the worsening profitability. The sudden increase in exports in certain products from East Asian countries may spur trade disputes between Asian countries and their major export markets such as the US and EU. Korea’s main export goods including D-RAMs, electric products, and automobiles will increasingly come up against antidumping complaints lodged by the industrialized countries.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market How the improvement of Asian countries’ competitiveness can increase their exports to ensure a better balance of payment depends on the elasticity of import demand of Asian export goods in the world market. The elasticity of overseas demand for Asian exports is considered to be low due to the fact that Asian countries compete with one after another, rather than with developed countries in the international market. When overseas demand for Asian exports is inelastic, depreciation rates of Asian countries are the same, and Asian countries compete against each other, then Asian countries will not enjoy improvement of price competitiveness by depreciation, but will only suffer welfare loss.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market The Korean won depreciation of 20~30 percent in comparison to its competitors such as Japan, Taiwan and China, will allow the country take advantage of this chance to expand export earnings. However, Korea’s exports to ASEAN countries, which have enjoyed a high growth rate in the last decade thanks to the rapid expansion of market demand resulting from a high growth rate and a rise of individual income in ASEAN, are recently showing a stagnant growth rate. Therefore, the prospects of Korea’s exports to ASEAN are not so bright because of the deep economic stagnancy and retrenchment in the region.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market More Active International Cooperation Will Stabilize the Asian Economy The crisis in Asia is expected to have a great impact on economic cooperation among Asian countries themselves. Japan and newly industrialized economies (NIEs), which lead foreign investment in Asia, may reduce domes

tic and overseas investment. Intra-Asian trade has not augmented rapidly, owing to the curtailment of the total import volume and investment. On the other hand, alteration of the relative price of each currency will trigger trade diversion. Some Asian imports from developed countries with strong currencies will be diverted to imports from neighboring countries.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market Despite the changing economic environment, most Asian countries will enjoy limited benefits of the strengthened price competitiveness because Asian countries, excluding Japan and NIEs, have a similar trade pattern. That is, the exchange between raw material and capital goods in intraAsian trade and exchange between consumer goods and raw material and capital goods.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market Asian Economic Situation Largely Influenced by Changes in the Yen and Yuan One of the most important factors for the stabilization and recovery of the Asian economy is the stabilization of the value of Japanese and Chinese currencies. If the yen’s value continues to drop to over 150 yen to the dollar, and the Chinese government, which wants to recover its plunging competitiveness, tries to devalue the yuan, the possibility that a financial panic will arise in some Asian countries under IMFsupported programs is higher. The Japanese government is trying desperately to stabilize the recently turbulent yen value.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market Stabilization of the yen, and further devaluation in China depends on how the American authorities perceive the currency crisis in Asia. Indeed, there is a great possibility that a threat to the growth and stability of Asia could spread to America. Recently, America has come to recognize the importance of a stable yen value and economic stabilization in Asia and has stepped in to aid this stabilization process. It is still difficult to expect good prospects for the Asian economy in the near term. The rescue packages for Thailand and Korea have been partially successful despite the numerous problems remaining to be solved. According to the Bank for International Settlements, Thailand has 50 billion US dollars in debt falling due over the next two years, Korea has 74 billion dollars and Indonesia 38 billion dollars. That adds up to a cash flow squeeze that has not heretofore been offset by an international rescue package. Indonesia’s situation looks particularly onerous as uncertainties remain over the stability of the present regime.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market

In order to connect the improvement of price competitiveness brought about by the currency depreciation to increased export earnings, foreign debt repayment and rehabilitation of the economy, international cooperation is essential as are internal econom

ic reforms in Asia.
(from KIET Economic Review)

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market

Exercises ? Ⅰ. Translate the following into English, using the words or phrases in the text:
1. 亚洲经济发展的主要推动力量 a major engine of growth in Asian economy 2. 韩国金融系统的结构性弱点 the structural weakness in South Korea’s financial system 3. 实行符合IMF援助计划要求的经济政策 to execute economic policies which adhere to IMF-aid (supported) programs

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market

4. 该国出口品价格竞争力的急剧下降
a sharp decline in the price competitiveness of that country’s exports 5. 日本股票市场的暴跌 the slump (plunge) in the Japanese stock market 6. 就价格竞争力而言具有的比对手更有利的地位 a more advantageous position than its rivals in terms of price competitiveness 7. 价格扭曲造成的贸易争端 trade disputes sparked by price distortion

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market

8. 由日元贬值引起的金融恐慌
the financial panic triggered by the depreciation of Japanese yen 9. 稳定近来异常波动的资本流量 to stabilize the recently turbulent capital flows 10. 工业化国家在世界贸易体系中的有利地位 the advantageous position of industrial countries in the world trade system 11. 全面的贸易战给各国带来的严重的福利损失 the serious welfare losses for all nations resulting from a full-scale trade war

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market

12. 韩国被迫向国际货币基金组织寻求的一笔580亿美元的紧急援助 a USD 58 billion bailout which South Korea was forced to seek from the IMF
13. 庞大的政府机构所造成的大量支出 the great expenditure caused by huge government institutions 14. 具有高度竞争力的技术密集型和知识密集型产品 Technology-(intensive) and knowledge-intensive products with high competitiveness 15. 依旧陷于衰退窘境的该国经济 the country’s economy which remains mired in recession

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market
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Ⅱ. Translate the following sentences into English:
尽管亚洲经济重获稳定,港币贬值的可能性将是涉及到类 似经济危机是否会在亚洲再度发生的重要变量。(while) While the Asian economy regained stability, the possibility of devaluation of the Hong Kong dollar will be an important variable affecting the recurrence of similar economic crises in Asia.

1.

2.

要使由货币贬值带来的价格竞争力的提高变为国际收支的改 善,国际间的合作和国内改革同样重要。(connect...to) In order to connect the improvement of price competitiveness brought about by the currency depreciation to a better balance of payment

(s), international cooperation is as essential as are internal reforms.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market 3. 由于负债累累的银行体系、政府的过度支出和对外债的过分 依赖而引起的亚洲金融危机严重破坏了世界经济。(owing to) The Asian financial crisis owing to the heavily indebted banking systems, excessive government spending and over reliance on foreign loans has seriously damaged the world economy. 4. 一些日本公司开始摒弃对银行体系贷款过分依赖的习惯,更加 注重利润和削减支出以免浪费。(fall out of) Some Japanese companies began to fall out of their over reliance on loans from the banking system, focusing on profits and cutting out (down) wasteful spending.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market

5.

1997年7月爆发的亚洲金融危机反映了亚洲各国脆弱的金 融体系的弊端。(erupt)

The Asian financial crisis that erupted in July 1997 reflected the defects in the fragile financial systems of Asian countries.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market
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Ⅲ. Put the following passage into English:

像死亡和税收一样,世界经济危机是不可避免的。正如它们 在过去的几个世纪中曾经发生过一样,它们还会继续发生。但是 1997年亚洲危机的迅速蔓延令人震惊,它显示了这些经济体无力 抵御投资者的反复无常。不幸的是,新兴市场在面临经济崩溃时, 没有国际“911”急救电话可以拨打。无论是国际货币基金组织还是 一个新的全球金融组织都不会使世界变得更安全。相反,那些想 要避免1997至1998年发生的毁灭性危机重演的国家必须学会保护 自己。而流动资本是金融自助的关键。一个拥有大量国际流动资 本——大量外汇储备和随时可获得的外汇贷款来源——不太可能 成为货币打击的目标。大量流动资本也能使一个已经处于投机围 攻的国家更好地进行自我防卫,并作出较有序的金融调整。问题 是要找到以合理的代价增加流动资本的方法。

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market Like death and taxes, international economic crises cannot be avoided. They will continue to occur as they have for centuries past. But the alarmingly rapid spread of the 1997 Asian crisis showed these economies’ vulnerability to investor skittishness. Unfortunately, there is no international “911” that emerging markets can dial when facing economic collapse. Neither the IMF nor a new global financial architecture will make the world less dangerous. Instead, countries that want to avoid a rerun of the devastating 1997—98 crisis must learn to protect themselves. And liquidity is the key to financial self-help. A country that has substantial internat

ional liquidity—large foreign currency reserves and a ready source of foreign currency loans—is less likely to be the object of a currency attack. Substantial liquidity also enables a country already under a speculative siege to defend itself better and make more orderly financial adjustments. The challenge is to find ways to increase liquidity at reasonable cost.

Unit Five Asia’s Economic Crisis and Changing Competitiveness in the World Market
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Ⅳ. Answer key for Writing research papers Exercise 5B. Readers' Guide to Periodical Literature 1.D.Olson 2.Business Week 3.Pages 22-24 4.The myth of the liberal media 5.Volume 72 6.LIBERAL PARTY(CANADA) 7.Yes (indicated by the abbreviation "il") 8.Volume 60, October, 1996


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