Was China the first domino? Assessing links between China and other Asian economies

Several commentators have suggested that competition from China-in particular its 1994 'devaluation' and strong export performance during 1994-95-may have contributed to the Asian crisis of 1997-98. We provide evidence against this view. We show that the devaluation was not important in economic terms, and China's strong export performance in 1994-95 was matched by other Asian economies. We also show that the period 1993 and 1996 was marked by relative stability in the export shares of China and other Asian economies in various geographical regions and industries. The paper concludes by outlining channels through which the Asian crisis could affect China. (C) 1999 Elsevier Science Ltd. All rights reserved. JEL classification: F31.