China's decision on yuan praised

China's decision on yuan praised

KUALA LUMPUR (Agencies): Senior officials from Southeast Asia
and China gathered here yesterday for a two-day meeting to
discuss the region's thorny economic problems.

Rodolfo Severino, the newly appointed secretary-general of the
Association of Southeast Asian Nations (ASEAN), indicated that
the region's economic well-being hinges on China's decision to
stabilize its currency, the yuan, or renminbi.

Speaking to reporters yesterday, Severino said the ASEAN
officials praised "China's commitment not to devalue the yuan and
the renminbi" during the current economic crisis.

Several Asian currencies have lost 40 percent or more of their
value since the Thai baht was floated in July, starting a chain
reaction that has caused market turmoil worldwide.

Hard-hit by the currency fallout, ASEAN leaders have
repeatedly requested China not to devalue its currency, which
would release a flood of cheaper Chinese products and draw
investors away from the Southeast Asian economies.

The regional leaders also hoped that China would stick to its
decision, Severino said.

Meanwhile, Severino was quoted by Star newspaper as saying
that ASEAN would set up an early-warning system against future
financial crises.

Officials from member states and the Manila-based Asian
Development Bank (ADB) will set up the regional surveillance
mechanism as early as next month, Severino said in Kuala Lumpur.

"It will primarily gather data relating to credit and monitor
macroeconomic indicators and capital movements within the region
and externally," he told the newspaper in an interview.

"The analyzed data will enable the ministries to take
precautionary or corrective measures early to prevent a full-
blown crisis in future," he said.

Severino said the ADB had informed him recently that it would
finalize the concept and structure of the mechanism this month.

ASEAN finance ministers, who met in Kuala Lumpur last
December, had urged the ADB to draw up the mechanism, following
the Asian financial crisis last July.

Thailand and Indonesia, together with South Korea, were forced
to obtain multi-billion dollar financial bail-out packages, while
other members like Malaysia and Singapore face slower economic
growth.

ASEAN groups Brunei, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand and Vietnam.