Discuss The Impact Of The Asian Financial Crisis Of 1997 On An Asian Country

1 Pages 352 Words

Introduction
Thesis: The Financial crisis that hit Hong Kong in July 1997 had significant economic impacts. Hong Kong has suffered severe problems, for example, impact on retail and banking sectors, negative economic growth, housing market, etc.
Body
1. The impact on housing market
1a. High interest rates contribute to the recession Hong Kong is suffering, by raising the cost of expanding a business or buying an apartment with borrowed money. (Varona, 1998)
1b. The house prices have declined significantly since the outbreak of the Asian Financial Crisis. (Yse and Webb, 2004)
2. The disadvantage of currency board system
2a. The stable Hong Kong dollar value has further hurt economy. (Leung, 2004)
2b. Following two years of painful economic adjustment, Hong Kong is still struggling with deflation due to the depressed housing sector. (HSBC, 2000)
3. Impact on retail sector
3a. At least 10 companies have collapsed from June 1997 to May 1998. (Varona, 1998)
4. Impact on unemployment and income
4a. The unemployment rate for October inched up to nearly 3 percent and was expected to climb. (Yi, 1997)
4b. The income down around 7% since the outbreak of Financial Crisis. (Son, 2003)
5. Impact on banking sector
5a. The reasons for the backing sector various, for example, the risk in interest rates, reduced availability of funding to be borrowed in the market, etc. (Carse, 1998)
5b. The customers deposits has slowed down in line with the recession economy. (Carse, 1998)
6. The economy recovery
6a. People believe that the benefits arising from the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the China. (Caplan, 2004)
6b. Robust economic growth in the past months has given Hong Kong bright prospects for economic recovery. (Mao, 2004)
7. Lingering problem
Despite some people say that the worst is over for the Asian Financial crisis, other predict that the worst is yet to come in Hong Kong. (Tse and Yip, 2...