(1) Internal factors 1. Overheated economic development, unreasonable structure, and poor resource utilization efficiency.

Although the macroeconomic development momentum of East Asian countries before the crisis was good, such as high savings and investment rates, fiscal balance, moderate inflation, strong economic growth, etc., in fact, overly optimistic expectations led to capital

Excessive accumulation and ignoring the rationality of resource allocation.

There is a large amount of excess productivity in the electronics, automobile manufacturing, household appliances, real estate and other sectors, and profitability has been significantly weakened.

At the same time, due to the lack of guidance from new leading industrial groups, a large amount of funds were diverted to the highly speculative securities market and real estate market, forming financial and real estate bubbles.

The ability of the macroeconomy to withstand various shocks has declined.

2. The "real estate bubble" burst and banks were left with serious bad and bad debts.

Real estate prices in Southeast Asian countries have soared during the past decade of rapid growth, attracting banks to invest heavily in real estate. Some banks have even lowered their standards for lending to the real estate industry.

According to statistics, funds lent by Thai financial institutions to the real estate industry account for about 50% of its total loans, Malaysia accounts for 29%, Indonesia accounts for 20%, and the Philippines accounts for 11%.

In recent years, due to the slowdown in economic development in these countries, there has been a serious oversupply of commercial buildings, resulting in a large number of residential and commercial buildings being idle, and banks' bad and bad debts have increased.

3. The exchange rate system pegged to the US dollar not only reduces people's awareness of potential foreign exchange risks, but also increases the difficulty of macroeconomic control by the monetary authorities.

Under a fixed exchange rate system, monetary policy loses its independence, and the central bank cannot use monetary policy to adjust macroeconomic operations according to changes in the economic situation.

Especially in Southeast Asia's long-term rapid growth, domestic and foreign investors are generally optimistic about the economic prospects, and a large amount of money has been invested in some hot industries.

When the economy shows signs of overheating, due to the peg, the central bank's hands are tied and it cannot change the money supply (changes in domestic credit are completely offset by an equal change in the opposite direction of foreign exchange reserves), nor can it change interest rates (because

Raising interest rates will bring more money into the country, worsening signs of overheating).

It is particularly worth pointing out that an important reason why Hong Kong's linked exchange rate system has been able to withstand the impact of the financial crisis and resist the malicious speculation of international speculators is that the powerful mainland is behind it.

The mainland has made it clear that it will firmly support the Hong Kong government’s efforts to maintain the stability of the Hong Kong dollar, and will even cooperate with the Hong Kong Monetary Authority to combat speculation against the Hong Kong dollar when necessary.

The mainland's foreign exchange reserves of US$140 billion and the external commitment of the RMB not to depreciate are strong backing for the stability of the Hong Kong dollar.

4. The term structure of foreign debt is unreasonable.

With the opening of capital accounts, East Asian countries have formed huge foreign currency debts to foreign banks, and the debt repayment period is particularly short.

Large-scale bank foreign currency loans with short maturities correspond to medium- and long-term claims on domestic enterprises denominated in local currency. Domestic banks have no maturity conversion and foreign exchange risk avoidance for huge foreign debts.

This is the main reason why countries deplete their foreign exchange reserves when a crisis breaks out.

Among them, South Korea's financial crisis was caused by the foreign debt repayment crisis.

5. System construction lags behind.

Asian countries experiencing crises are plagued by problems such as weak government governance, insufficient investment protection, the prevalence of related-party lending, lax enforcement of bankruptcy laws, and lax compliance with accounting standards.

"Crony capitalism" creates market opacity.

Weak institutional construction is incompatible with the marketization process of crisis countries.

(2) External factors: Global economic integration and the inherent instability of the international financial market are the external causes of the financial crisis in Southeast Asia.

Under the trend of globalization, the inherent instability of the international financial market is mainly manifested in the following: capital flows are easily reversed by changes in market expectations and confidence; the advancement of information technology allows huge amounts of funds to quickly flow across borders around the world;

The funds available to international investment funds and investment banks are far larger than what the small and medium-sized financial markets can bear, making the small and medium-sized financial markets extremely vulnerable to their attacks.