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SHORT-TERM FOREIGN FUNDS, A COMPARATIVE STUDY BETWEEN CHINA AND VICTIM COUNTRIES OF 1997 ASIAN FINANCIAL CRISIS

Weiping Liu1

Eastern Connecticut State University

ABSTRACT

The 1997 Asian financial crisis inflicted serious economic damages to many Asian countries. However, China was conspicuously avoided being severely attacked by this crisis. This study compares the growth patterns of foreign short-term debt, the foreign debt structure and short-term foreign capital between China and victim countries both before and after the crisis. Evidence shows that China was aggressively using short-term foreign debt and short-term foreign capital in the last several years. This indicates that China is exposing itself to great financial risks.

Key Words: 1997 Asian financial crisis, foreign short-term debt, debt structure, financial risks.

JEL Code: F34 , F37