“Hong Kong was built up by Chinese people, not the British.

[beijingwalker]

The title is abit misleading as well. If Hong Kong had never been a British colony ,then I don't think it would have the international appeal it has today as well no? So there were also advantages for Hong Kong being a crown jewel of the British empire in Asia.

How about if India was not a British colony?

 

[Mista]

As I research to many source it only said Singapore promised to give loan to Indonesia, never heard that Singapore actually gave the loan to Indonesia, and I think Indonesia in the end didnt get the loan as the interest rate is higher than IMF loan.

"Negara-negara sahabat yang menjanjikan akan membantu Indonesia juga menunda mengucurkan bantuannya menunggu signal dari IMF, padahal keadaan perekonomian Indonesia makin lama makin tambah terpuruk. Singapura yang menjanjikan memberikan bantuan sebesar US$ 5 milyar meminta pembayaran bunga yang lebih tinggi dari pinjaman IMF, sementara Brunei Darus-salam yang menjanjikan US$ 1 milyar baru akan mencairkan dananya sebagai yang terakhir setelah semua pihak lain yang berjanji akan membantu telah mencairkan dananya dan telah habis terpakai (Tarmidi, 1999)."

Google Translate

Friendly countries that promised to help Indonesia also delayed disbursing aid awaiting signals from the IMF, even though the Indonesian economy was getting worse and worse. Singapore, which promised to provide assistance of US $ 5 billion, asked for higher interest payments from IMF loans, while Brunei Darus-salam, which promised US $ 1 billion, would only disburse its funds as the last after all other parties who promised to help have disbursed their funds and has been used up (Tarmidi, 1999)

https://www.researchgate.net/public...er_Indonesia_Sebab_Dampak_Peran_IMF_dan_Saran

And no body know how much Singapore made the intervention in forex market as it claim to do so.



Even your source only said promise not gave the loan.

Singapore offered the aid, which Suharto claimed that it has softer terms as compared to the IMF. Back then there was an opposition candidate who keep on hammering the PAP during elections for the loan.

Singapore's position is that Indonesia has to accept IMF reforms for those softer loans to be made.

President Suharto of Indonesia announced Tuesday that Singapore had pledged $10 billion to prop up the Indonesian currency in a rescue program that would not impose strict, IMF-style financial conditions on its beneficiary.

"We don't need to worry now," Mr. Suharto said Tuesday after the Singapore assistance package was announced. "What we need is to restore confidence." Addressing the issue of the compatibility between Singapore's aid and the IMF package, a spokesman for the IMF said the Fund had been briefed beforehand about Singapore's move.

https://www.nytimes.com/1997/10/29/...pore-bypassing-imf-pledges-10-billion-to.html

Speaking at a ceremony for "Youth Pledge Day" on Tuesday in East Java, Mr. Suharto said Singapore Prime Minister Goh Chok Tong made the US$10 billion offer when they met in Jakarta last week. The president said that Singapore offered a loan of US$5 billion with "very soft commercial terms" to add to Indonesia's reserves, and that it also offered to buy US$5 billion of rupiah.

https://www.wsj.com/articles/SB87806434531735500

But of course we know Indonesia accepted the IMF rescue package in the end. It's probably part of a package like my previous post stated.

 

[Nan Yang]

Again, you have the problem with the poster before. Shorting currency forex is not the same as shorting a stock.

To short a stock, you will need to borrow stock that you do not have. To short a currency, you only need to place a sell order. And Soros can open an investment company that only trade Currency, but not asset. Which is exactly what Soros did in Hong Kong. And since you can exchange CYN to HKD in 1998 China, (I think the exchange rate is somewhere around 1HKD : 1.2 RMB, but don't quote me on that) which mean you can dump HKD into altering the exchange rate and interest rate of RMB

The only thing you need to notice when you short a currency is pair rate, and China hold a 2% different pair rate between any currency to RMB, which is harder to short, but it's not impossible, especially if you have money. And again, China in 1998 is not the same China now.

In short, he don't need to buy or sell RMB, as long as he can buy or sell HKD or any currency with an exchanged value in China, he could short Yuan.

All I am saying is that the strategy of these fund managers were to attack the currency until it collapse which in turn caused the stock market to collapse then suck the wealth out of the country. Double prong attack.

Some would argue if the stock market already did not have a grim outlook, it's impossible to short anything (Not stock, not currency, not anything) and Soros could not have make that happens.

This blaming the victim just rub salt to the wound. Bear in mind these western fund manager (from more develop and wealthy nations) despite their size which is already huge, could leverage even more fund many more times their size for the attack. Further more ASEAN countries financial institutions were not very mature at that time.

Beware when Western countries ask that you open up your financial institution.

 

[JSCh]

Economy 16:05, 14-Aug-2019
How Hong Kong survived the 1998 financial crisis
Updated 19:53, 14-Aug-2019
By Zhou Minxi

In the summer of 1998, as a financial earthquake devastated Asia's economy, the Hong Kong Special Administrative Region (HKSAR) government won a hard-fought battle to defend the Hong Kong dollar and Hang Seng Index (HSI) against speculative attacks led by American billionaire investor George Soros.

Backed by Beijing, the Hong Kong Monetary Authority (HKMA) made the controversial decision on August 14 to enter the market, buying up 118 billion HK dollars' (15 billion U.S. dollars) worth of stocks and futures in two breathtaking weeks of trading, and eventually driving out international speculators.

Asia under attack

The 1990s saw the liberalization of capital markets in Asia. International hot money was pouring into Asia amid praise for the "Asian Miracle" and bloated optimism. As a key commercial hub with the freest economy in the world, Hong Kong also benefited from the boom, particularly in the property market. But a storm was brewing.

On July 2, 1997, just a day after Hong Kong's return to China, Thailand became the first casualty in the Asian financial crisis, following a calculated attack on the baht from international speculators. The country was forced to abandon the baht's fixed exchange rate with the U.S. dollar, effectively crashing the currency.

The crisis quickly spread across the region as predatory hedge funds, such as Soros' Quantum Fund, feasted on the bloodbath by shorting the Asian markets. One after the other, the currencies of Malaysia, Indonesia, the Philippines and South Korea were brought to the ground. The huge influx of foreign capital that had fueled Asia's boom was quickly pulled out, leaving a trail of destruction.

In 1997, Hong Kong's economy was more resilient than its Asian peers. The real estate market was booming, and the HSI peaked at 16,673 points in August. However, leading international opinion at the time was bearish on the city's economic future with China.

A large banner hangs over the entrance of the HSBC bank in Central, Hong Kong, July 1, 1997. /VCG Photo

Forbes magazine published a piece on June 26, 1995, titled "The death of Hong Kong," predicting that the city's days as a vibrant international financial center were coming to an end after the 1997 handover.

Speculators saw the perfect opportunity to make a killing.

By then Soros was unstoppable, having amassed many billions of profits wreaking havoc around Asia. The reviled financier, who famously attacked the British pound in 1992 then the Mexican peso in 1995, held remarkable sway over international hot money. Few thought a small but open economy like Hong Kong stood a chance against the veteran investor.

George Soros pictured in 1994. /VCG Photo

Since July 1997, Soros and others launched a series of attacks on the HK dollar. With limited options to fight back, the HKMA responded each time by raising the interest rate to make the speculators' bets costlier. The interest rate shot up nearly 300 percent overnight at one point in October. As a result, Hong Kong's real economy suffered.

The interest defense was powerless against the speculators' double attacks on both the Hong Kong dollar and the Hang Seng equity market, which were impacted by the hikes. The speculators would gain either way.

A test of will

On August 13, 1998, the HSI fell by more than 60 percent to 6,660 points. Hong Kong's property market deflated by half and the GDP shrank 5.5 percent.

Rumors had begun to spread about a devaluation of the Chinese renminbi, which led to bank runs. The speculators were betting on the HKMA to give up the HK dollar's linked exchange rate with U.S. dollar.

The U.S. dollar peg, which had been in place since 1983, was a pillar for Hong Kong's externally oriented economy. China's currency was shielded from open attacks, but could have been forced to weaken in order to maintain export competitiveness. Nevertheless, its stability was vital to public confidence in Hong Kong.

A trader holds his head at the Hong Kong Stock Exchange as stock prices plunge, Hong Kong, January 7, 1998. /AP Photo

The Chinese government repeatedly pledged that the renminbi would not be devalued. At a press conference in March, then Chinese Premier Zhu Rongji promised that the central government would protect Hong Kong from the financial crisis "at all costs."

"The authorities of Chinese mainland have also expressed unequivocal support for the HK dollar's link to the U.S. dollar," said HKMA chief Joseph Yam in a speech in March. "There is a standing offer for extending help, if help is required, in the use of the mainland's foreign reserves (140 billion U.S. dollars)."

With this reassurance, on August 14, the HKMA and then Finance Secretary Donald Tsang declared war on speculators.

After record trading of 79 billion HK dollars (almost 10 billion U.S. dollars), the Hang Seng Index was pushed up against crushing pressure from speculative selling, closing at 7,829 on the final day of the showdown on August 28.

The HKSAR government defeated Soros, who was forced to walk away with losses. The intervention committed as much as 10 billion U.S. dollars of Hong Kong's 96 billion forex reserves.

Not only was the currency link successfully defended, but it was also strengthened. Both the HK dollar and Chinese renminbi stood firm.

China honored its promise not to devalue the renminbi. This greatly helped calm the markets amid extreme volatility. By refusing to play the game of "competitive devaluation," China had accepted domestic sacrifices for the common good, wrote Y. C. Jao of the University of Hong Kong in his 2001 book on the Asian financial crisis.

Hong Kong SAR Finance Secretary Donald Tsang speaks during a press conference in Hong Kong, August 28, 1998. /AP Photo

The intervention, dubbed "gamble of the century," took great courage since it would damage the city's laissez-faire reputation. The move was widely criticized by international opinion leaders, including Nobel Laureate Milton Friedman and then Federal Reserves chairman Alan Greenspan.

At the height of the crisis, it was "a matter of survival to preserve local community confidence, protect the integrity of the linked exchange rate to the U.S. dollar as well as restore a level playing field to the stock and money markets," Tsang said in 1998.

A decade later, Greenspan wrote that the HKSAR had made the right call. Soros himself also admitted in 2001 that the authorities did "a very good job when they intervened to arrest the collapse of the Hong Kong market."