Currency and financial crises - lessons from the Asian crises for China?

The Asian crises also led to a discussion about what China can learn from the destabilising developments observed in the neighbouring countries. The main intention of this paper is to focus on the probability whether China will also face a severe, financial and/or currency crisis. Two main conclusions evolve from the current economic conditions in China. First of all the danger of a currency crisis is not given for China as - apart from the still existing capital controls which avoided massive short-term capital inflows - the interest rate differential to the anchor currency (US$) will not cause excessive short-term capital inflows and thus will not cause a destabilising volume of portfolio investments. Nonetheless a depreciation of the RMB Yuan is discussed in detail. In addition China should continue reforming its financial system by a deeper institutional foundation and solving the problem of bad loans the commercial banks are still struggling with. Reforms should start soon as further capital account liberalisation will raise foreign pressure and the costs of financing the higher debt caused by restructuring banks and enterprises. --China, Asian crises,currency crisis,financial crisis,financial system reform,currency depreciation,capital account liberalisation

Separation between coherent and turbulent fluctuations. What can we learn from the Empirical Mode Decomposition?

The performances of a new data processing technique, namely the Empirical Mode Decomposition, are evaluated on a fully developed turbulent velocity signal perturbed by a numerical forcing which mimics a long-period flapping. First, we introduce a "resemblance" criterion to discriminate between the polluted and the unpolluted modes extracted from the perturbed velocity signal by means of the Empirical Mode Decomposition algorithm. A rejection procedure, playing, somehow, the role of a high-pass filter, is then designed in order to infer the original velocity signal from the perturbed one. The quality of this recovering procedure is extensively evaluated in the case of a "mono-component" perturbation (sine wave) by varying both the amplitude and the frequency of the perturbation. An excellent agreement between the recovered and the reference velocity signals is found, even though some discrepancies are observed when the perturbation frequency overlaps the frequency range corresponding to the energy-containing eddies as emphasized by both the energy spectrum and the structure functions. Finally, our recovering procedure is successfully performed on a time-dependent perturbation (linear chirp) covering a broad range of frequencies.Comment: 23 pages, 13 figures, submitted to Experiments in Fluid