Residential and commercial buildings are seen from Victoria Peak in Hong Kong, China (Photographer: Billy H.C. Kwok/Bloomberg)

What Krugman, Reinhart May Miss on Emerging Market Risk: Chart

(Bloomberg) -- The recent debate on emerging market risk misses out China’s role as a force for stability, according to research by Bloomberg Economics. Even in the 1997-98 Asian financial crisis, China’s decision to hold the yuan stable was a stabilizing factor and 20 years on, the country’s capacity to shape emerging market outcomes has increased exponentially. Back in 1997, Malaysia’s exports to China were 1.7 percent of GDP, now they are 9.3 percent -- that pattern is repeated across major emerging markets, many of which now sell more to China than they do to the U.S.

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