MEDFORD, Massachusetts -- At the height of the Asian financial crisis in 1997, two stories surrounded the role of China. One attested to China's positive role as a stabilizer; the other pointed to China's unsavory economic practice. According to the latter, China had intentionally devalued its currency in 1994 to strengthen its comparative advantage vis-a-vis the rest of Southeast Asia. The Chinese Ministry of Foreign Affairs, sensing the risk of China's being singled out for rebuke, quickly rallied to the aid of Thailand with a loan of $1 million in 1997.
Beijing promised not to devalue its currency again, and China's faux pas was forgiven and forgotten.
The competition for regional leadership has once again become complicated with the outbreak of severe acute respiratory syndrome. The political capital that China had cultivated with the Association of Southeast Asian Nations since 1997, is withering. Throughout the region, accusatory fingers are being pointed at China for not disclosing cases of SARS when they appeared in November.