This paper details the many possible economic imports that the Mainland China will exert on the other Asian countries, especially the ASEAN. The prognosis from the static analysis is negative overall, especially for countries with factor endowments similar but smaller than Mainland China’s, namely the Philippines, Malaysia and Indonesia can depend on abundant primary resources to complement Mainland China’s growth. Vietnam and Thailand can depend on their competence at food production to get by. The dynamic analysis shows the crucial importance of the relative real wage, exchange rate and foreign direct investment in the role Mainland China has played in the Asian Crisis. It also highlights how important proactive and aggressive exchange rate policy is in prolonging the adjustment period of the region to the challenge from Mainland China.
