The consequences of the Asian financial crisis are currency devaluation and economic recession, not the former leading to the latter. At that time, the economies of many countries in Southeast Asia were overheated, and the liberalization of exchange rates and capital markets did not match the development of domestic financial markets. Therefore, when the risk accumulates to a certain extent, foreign capital withdraws, foreign exchange reserves are exhausted and the currency depreciates; Due to the lack of capital support, the domestic economy naturally collapsed.

When Japan rose, it was similar to China. It has a high savings rate and relies on exports to consume the production capacity formed by excessive domestic investment. Therefore, when the appreciation of Japanese yen weakened the competitiveness of domestic export products, it caused great harm, just like China today. We control the exchange rate so tightly because Japan is a warning. It is easy to understand that the appreciation of the local currency weakens the competitiveness of export products. At the exchange rate of 1 RMB/$,the products originally priced at RMB 20 in China were sold to US$ 20. If the RMB appreciates to 0.5 RMB/USD, it will cost US$ 40 to buy the same thing, so they will choose products from other countries.