Japan and China Refuse to Take Lead in Asia Crisis
International Herald Tribune
December 16, 1997
Thomas Fuller

One thing was missing when Asian leaders met here Monday to fight their way together out of the region's financial morass: an Asian solution.

Hope quickly faded that Asia's two biggest economies — Japan and China — were willing or able to lead the way out of the crisis, and East Asian leaders turned to the West to ask for help.

On the opening day of a summit meeting of East Asian leaders here, Prime Minister Ryutaro Hashimoto of Japan was generous in dispensing advice, but offered no new financial assistance.

Mr. Hashimoto told leaders of the Association of South East Asian Nations it was "indispensable" that they restructure their economies, according to a Japanese spokesman.

Japan kept a low profile at the meeting, refusing to hold bilateral talks with any of the other countries present — which officials said was due to Mr. Hashimoto's preoccupation with domestic political concerns.

Mr. Hashimoto also told leaders of Southeast Asia's beleaguered economies that they should not count on Japan as a market to export themselves out of the crisis.

"Personal consumption is very low and therefore it's not practical to increase imports from ASEAN now,"

Hiroshi Hashimoto, a government spokesman, quoted the Japanese prime minister as saying.

For some Southeast Asian leaders Japan's reluctance to lead the region through the crisis was no surprise.

"They find it easier to work with America," said Daim Zainuddin, a close aide to Prime Minister Mahathir bin Mohamad of Malaysia. Mr. Daim pointed out that at a meeting of Asia-Pacific leaders in Vancouver in November, Mr. Hashimoto had said Japan was not "conceited enough" to believe they can pull East Asia out of the crisis.

"That's the Japanese way of saying they're not interested," Mr. Daim said.

China, for its part, told ASEAN countries that they did not want to hold similar summit meetings on a regular basis. The comments seemed to indicate that Malaysia's dreams of an East Asian economic caucus — a grouping that would not include the United States or European Union — were dead.

Western diplomats said one of the reasons for China's lukewarm reaction to the idea of regular meetings of East Asian countries was that Southeast Asia — following the devaluation of the region's currencies — was now more competitive with China for export markets.

Asked if Beijing felt threatened by cheaper Southeast Asian exports, Shen Guofang, China's official spokesman, said the issue had come up during meetings between Chinese and ASEAN leaders and that President Jiang Zemin "expressed the view that China was not completely immune to the financial crisis that has occurred in Southeast Asia." This is a departure from comments made by Mr. Shen several weeks ago that China was not concerned by the rest of Asia's troubles.

China also announced Monday that it would make a further contribution to a rescue fund for Indonesia, but did not disclose how much money it would provide.

ASEAN, which groups Indonesia, the Philippines, Singapore, Thailand, Malaysia, Burma, Brunei, Laos and Vietnam, could be forgiven for thinking that they invited the wrong guests to their crisis meeting. With Japan unwilling to take the lead, Southeast Asian officials urged the West to take a more active role in the crisis.

Supachai Panitchpakdi, Thailand's deputy prime minister and commerce minister, suggested that the grouping of the major industrialized countries, the Group of Seven, should convene an urgent meeting to address the crisis.

"Only through a globally concerted action can the ongoing liquidity crunch be prevented from becoming a total meltdown," he said.

The day before, Akapol Sorasuchart, a Thai government spokesman, said that "a clear signal from the economic superpowers may be necessary" to overcome the crisis.

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