Indeed, fears that the renminbi might plunge if Chinese companies tried to sell off their local currency for dollars prompted a tough crackdown last year on the foreign-exchange market. Malaysia's response to the sudden attack on its currency that followed the Thai baht's decline was even more dramatic. If fears concerning the dangers of borderless capital have grown in Asia, so has cynicism regarding its benefits. They always said, everything will be fine, as long was we open our banking sector. The Rebound Ignoring that advice in the past year hasn't hurt his country, argues Mr. Sopiee.
Businesses can borrow.
Even in Hong Kong, where policies promoting free trade and the free flow of capital have created a world-class financial center, the crisis has led to a push for change. Two years ago, the Hong Kong dollar faced its most serious threat since 1983, when British authorities pegged its value to the U.S. dollar. Panicked selling played a role. So, the government says, did highly leveraged hedge funds that hoped to profit by betting on a fall in the currency's value. The Hong Kong dollar later stabilized, and the government is now sitting on a huge profit from its stock trades, at least on paper.