The Asian Currency Crisis and Australian Exports to East Asia

The determinants of and the impact of the Asian currency crisis on Australia's total merchandise exports to nine East Asian countries are analysed using a modified gravity model .The results show that real GDP and per capita real GDP of East Asian countries have positive and significant impacts, while real exchange depreciation and tariff rates of East Asian countries have negative and significant impacts on Australia's exports to East Asian countries .Australia's exports to East Asian countries are significantly higher since these countries gained APEC membership. Australia's exports to all of the crisis-ravaged East Asian countries, except Thailand, were significantly higher in 1998 than in previous years. The analysis also shows that there is significant scope for Australia to expand its exports to China and Hong Kong, while there may be some opportunity for Australia to increase its exports to Indonesia, Malaysia, the Philippines, South Korea and Thailand.