East Asia summit opens with currency worries

East Asia summit opens with currency worries

HONG KONG (AFP): Political and business leaders gathered here
yesterday to start the East Asia Economic Summit, with the
region's currency worries and China's promises to speed reforms
taking center stage.

The chairman of China's State Economic and Trade Commission,
Wang Zhongyu, told the opening session of the three-day talks
there would be faster reform of state-owned companies in a bid to
create world-class firms "with names in the Fortune 500" by the
turn of the century.

Southeast Asia's economic problems were also subjected to
scrutiny, with a leading U.S. academic saying they were more
troubling for the rest of the world than the Mexican peso crisis
of 1994-95.

Steve Hanke said deflationary forces in the region would "send
shock waves through the global capital markets."

Hanke, a professor of applied economics at Johns Hopkins
University and a former adviser to Argentina's government, said
Asian economies account for almost a quarter of world exports of
goods and services, compared to just over four percent for Latin
America.

The first day of the summit, organized by the Geneva-based
World Economic Forum, was devoted to China's economic development
but the currency crisis is expected to be the main focus of
talks.

Philippine President Fidel Ramos, Singaporean Prime Minister
Goh Chok Tong and Belgian Premier Jean-Luc Dehaene will all
address the forum along with Hong Kong Chief Executive Tung Chee-
hwa.

Malaysian Prime Minister Mahathir Mohamad was invited to the
meeting, but declined, according to organizers.

Mahathir has blamed international currency dealers for the
crisis gripping southeast Asian countries, singling out
billionaire US financier George Soros. Soros has in turn
criticized Mahathir's leadership.

The Malaysian premier has also hinted the crisis could have
been caused by a Jewish conspiracy, noting that Soros is Jewish.
Wang told the summit that China's economy will grow by more than
eight percent per annum in the years to 2000.

He said inflation would be kept under five percent, and with
annual growth of seven percent into the next century, China would
become an "important member and reliable partner of the world
economy in general and East Asia in particular."

Wang said reform of loss-making state firms was already paying
dividends, with sales growing 14.3 percent in the past five years
and profits and tax revenues increasing by 10.5 percent.

He said the 1,000 largest companies would be organized into
big companies and business groups which would enjoy autonomy in
investment and financing. "By 2000, big corporations will be
internationally competitive...with names in the Fortune 500."

One session of the summit is to be devoted to the currency
crisis, which has slashed 30 to 50 percent from the values of the
Thai, Indonesian, Malaysian and Philippine currencies against the
greenback in three months. The crisis was sparked by the July 2
float of the Thai baht.

The region's environmental woes, including thick smog caused
by Indonesia forest fires which is blanketing southeast Asia,
will also be highlighted.

The World Economic Forum organizes the annual summit of
international business and political leaders at Davos in
Switzerland and a series of regular regional conferences such as
the East Asia Economic Summit.

North Korean delegates to the summit demanded the media be
excluded from a briefing by one of Pyongyang's top trade
officials, forum sources said.

State Commission of External Economic Affairs Vice Chairman
Kim Mun-Song is to address a summit session Wednesday on the
prospects for foreign investors in North Korea.

Officials did not give a reason for the demand but were
adamant no journalists be allowed to attend the speech.