HONG KONG, March 6 (Xinhua) -- More than 100 members of the academic, business and government sectors attended a seminar in Hong Kong Tuesday to discuss financial and debt crisis from Asian perspective.
Speaking at the seminar entitled "Changing Global Landscape -- Tailing Effect of the Financial Crisis from a Regional Economic Cooperation Perspective," Chairman of Hong Kong Committee for Pacific Economic Cooperation Sung Yun-wing pointed out that it has been more than three years since the financial tsunami first broke out in 2008 and the tailing effects are still haunting the world economy.
He added the downgrading of sovereign debt ratings in advanced economies had changed the global landscape and was bound to affect Asia-Pacific regional economic cooperation.
Lillian Cheung, the Head (Economic Research) of Research Department of Hong Kong Monetary Authority talked about the likely impacts for the Asia-Pacific region from the rising sovereign debt issues in the advanced economies and possible remedies.
"The Asian financial markets started the year with an optimistic mood", she said that however, with the sovereign debt issues in the advanced economies rising, Asia may face downside risks to growth such as an abrupt reversal of fund flows, and the risk of renewed pressure on consumer and asset prices.
she advised that Asian policy makers maintain financial stability, which is crucial in mitigating any eventual painful economic adjustments. Maintaining maximum policy flexibility is also important.
Song Lei-lei, the Principal Economist of the Office of Regional Economic Integration of the Asian Development Bank, analyzed the implications of a changing global landscape from the economic prism.
Song held that the structural nature of global financial crisis is structure imbalances, so structural adjustments to correct imbalances are necessary. For example, emerging economies have to re-balance their economies. As jobs lost in developed countries, these countries should re-employ people, in other words, re- industrialize. He said that all these adjustments will take time.
Ho Lok-sang, Professor of Economics and Director of Center for Public Policy Studies of Lingnan University, spoke about the financial crises and the U.S. Dollar (USD) in particular on how a reform of the international monetary regime would contribute to a more stable world.
He pointed out some consequences of USD serving as international medium of exchange. For instance, since sovereign debt is denominated in USD, some countries worry that the U.S. may inflate or depreciate away the debt.
Ho said that a measure of real value of USD is the World Currency Unit (WCU). As an indexed unit of account, the WCU is a unit of global real purchasing power as defined in some base year. "Sovereign debt issued in WCU will be fairer to borrowers and creditors," he added.
The seminar was jointly held by the Hong Kong Committee for Pacific Economic Cooperation and the Trade and Industry Department of the Hong Kong Special Administrative Region government.
The Hong Kong Committee for Pacific Economic Cooperation was established in 1990 to coordinate Hong Kong's participation in the Pacific Economic Cooperation Council (PECC).
The PECC is a non-governmental organization set up in 1980 to develop closer cooperation in trade and economy among economies in the region.