Japan would move to deregulate its financial sector and has the political will to tackle the issue, according to a senior official. Responding to strident calls here over the past few days for Japan to buoy up the region and increase its domestic demand, Mr Eisuke Sakakibara, the Japanese vice-minister for finance, insisted that his country does not lack the political will to tackle its problems.

"We have the money and the ability to do something. We will provide the money to dispose of non-performing assets which the banking sector has been suffering from. Japanese policymakers are determined to restore confidence."

He said that a fiscal stimulus equivalent to 1 per cent of gross domestic product will be pumped into the economy over the two months of February and March. He insisted that this five trillion yen injection is a significant stimulus and could not be dismissed by critics who are calling on Japan to lift the Asian region by boosting its economy.

However, he also hinted that further measures will be provided but refused to go into detail saying that the currency measures are still going through the Japanese Diet (parliament).

The seminar also heard a senior Chinese figure saying that the peg of the Chinese currency to the US dollar will be held. Ms Yuan Ming, director of the institute of international relations at Peking University, said the Chinese government and leadership would do everything possible to stabilise the peg of the yuan to the dollar, because it was so important for China and for Hong Kong.

There was an air of co-operation in the region, she said and China's priority was regional stability. She added that China saw the need for regional unity but that it did have domestic political concerns, particularly Indonesain attacks against ethnic Chinese.

A number of speakers warned of the risks posed by the Asian crisis. But Mr Deryck Maughan, cochairman and chief executive of Saloman Smith Barney, warned that it was important that the risks were not exaggerated. "China and Hong Kong are committed to keeping their exchange rates and have the support of the other G7," he noted. "I would advise - do not go short on Japan."

Buoyant sentiments were echoed by other particpants. After the reassurance from Ms Ming, seen as a Chinese insider, Mr Ronnie Chan, chairman of the Hang Lung Development Company in Hong Kong, insisted that Hong Kong would not slide.

Dismissing criticism of a 35 per cent slump in property values over 7 months as "like eating salad", he said the problem is very simple. Hong Kong companies would survive as they are lowly geared.

Even the Thai deputy prime minister was in upbeat mood. Mr Supachai Panitchpakdi, insisted that first on the list of the Thai reform process is financial reform. "We are permitting 100 per cent investment by foreign investors so now is the time to come in," he told the audience.

He added that the government will have plans to privatise 15 companies by the end of the year. These will include oil exploration, independent power producers and the Bangkok international airports.

At the same time the US government appeared eager to dispel any notion that it might not be doing its bit. Assistant secretary for East Asian and Pacific Affairs Mr Stanley Roth insisted that the US government is looking at the big picture.

"It is self-apparent we have to be very aware of a region we have had to send troops to three times this century," he said. "It is of vital security interest."

He added that the US is determined that the North Koreans will not make the mistake of thinking that South Korea could be vulnerable. He said that problems in the regions also affect US economic interest directly.