2001
9/11 HURTS SEA ECONOMIES
The US terrorist attacks reverberate across world markets, with Korea’s KOSPI among the hardest hit with an immediate 12% drop in mean returns. Asia’s emerging markets face a more prolonged rise in volatility, bearing the brunt of global uncertainty.
2002
CHINA LAUNCHES QFII SCHEME
Until 2002, China’s tight capital controls prevented foreign investors from buying or selling stocks on Chinese exchanges. But in a move that opens up the Shanghai and Shenzhen stock exchanges, China launches its Qualified Foreign Institutional Investor programme, allowing licensed foreign buyers to buy and sell RMB-denominated ‘A’ shares of Mainland companies. These shares are subject to quotas, which are increased from $30 billion to $80 billion a decade later.
2003
SARS OUTBREAK HITS GREATER CHINA
In March the World Health Organisation alerts the world to a dangerous type of pneumonia that eventually become known as severe acute respiratory syndrome (SARS). Affecting mostly Guangdong and Hong Kong, the outbreak is estimated to have decreased foreign tourism revenues by as much as 60% and shaved 1 to 2% off of China’s GDP in 2003.
2004
INDIAN OCEAN TSUNAMI
One of the world’s largest disasters strikes Asian countries across the Indian Ocean on December 26, 2004 in a tragedy whose human toll of nearly 230,000 deaths far eclipses its economic significance. The devastation to homes and infrastructure across Indonesia, Thailand, India and Sri Lanka primarily leads to massive reconstruction efforts that include the Asian Development Bank’s largest grant programme in its history.
2005
CHINESE RENMINBI DE-PEGGED FROM USD
After years of US trade complaints that China is undervaluing its currency to the advantage of its exporters, the People’s Bank of China alters its fixed exchange rate policy in July 2005. It no longer keeps a fixed peg on the renminbi to the US dollar, revaluing it 2% higher. While the move was initially small, this shift to a ‘soft peg’ policy leads to further appreciation until 2008 when the currency is once again pegged to the USD to weather the global financial crisis.
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