KUALA LUMPUR - As fear of spillover from the European debt crisis looms in other parts of the world, the CEO of Malaysia's leading bank Maybank Investment Bank, Zafrul Aziz, said there would be no risk of hardlanding in emerging economies in Asia this year provided that China remains strong.

He told Xinhua in an interview that the 1997 financial crisis that saw a slump in Asian currencies and foreign debt-to-GDP ratios shot up beyond 180 percent in several major Southeast Asian economies had taught Asian economies how to bounce back from economic hard times.

"We learned the position of the companies, especially the large companies as well as the government itself when it comes to their debt over GDP," Zafrul said.

"We learned that the systemic risk is contained within the region...We have seen bank capitals beefed up and the capital adequacy ratio having a high accountable level," he added.

He said the governments' debt in Asia now is nowhere near where it was in 1997 as it developed strong discipline in drafting monetary policies that enable them to relax some of the monetary and fiscal policies when the economy is in danger of contracting.

Many economies in Southeast Asia, including Indonesia and Malaysia, have been posting positive growth despite the European debt crisis.

Asian companies have also structurally strengthened their capital base.

"We have built a defense system but we have to make sure the system is sustainable."

As the outlook for Europe remains grim with the US economy bobbing along, analysts predicted China to be the next country that has the greatest influence in the world economy.

Maybank Investment, which recently acquired a strategic stake in one of Asia's biggest securities and investment broking group Kim Eng Holdings Limited, has a substantial presence in China, including key financial hubs Beijing, Shanghai and Hong Kong.

Zafrul hopes China could further liberalise its capital market further to allow investors to trade Chinese stocks.

"The corporations there have little understanding about investors in ASEAN especially because there are differences in accounting policies and some of the guidelines on how the government works," he told Xinhua.

"But we see a lot of interest from Malaysia and the region when it comes to doing cross border deals in China. We also see quite a number of Malaysian companies join partner with Chinese companies coming into this region," he said.

"In both ways, China is slightly opposite of the Europe as they are trying to cool down the economy and calm the inflation rate. So we feel more positive about China than the rest," he added.

Source:chinadaily