This initiative, involving the ASEAN countries, together with China, Japan and Korea, has been expanded to provide a backstop in case any of the countries faces a short-term liquidity shortage. The role that safety nets play may also be affected by changes in the activities of firms and financial institutions in Asia.
With Asia no longer serving as a production base for exports only, but also representing a major consumer market, global firms have been actively expanding in Asian markets and have been localizing their businesses. For instance, in order to capture the growing domestic demand in Asian economies, Japanese manufacturing firms have been increasing local production.