1997 was a very dramatic year, and the world's most popular movie was "Titanic" filmed in Hollywood, the world's largest luxury passenger ship in the early 20th century, which was claimed to be unsinkable, sank to the bottom of the North Atlantic Ocean with elegant musical accompaniment and terrified screams one after another.

When Chinese audiences walk out of the theater with mixed feelings, tragedy is unfolding in the business world, and the grief is the same.

The Asian financial crisis, which began in the summer and lasted for more than four months, had a major impact on Asian countries and all industries.

Middle-class assets in the Philippines, Malaysia and Indonesia fell by 50 percent, 61 percent and 37 percent respectively, while resident assets in Hong Kong Island, Singapore and Thailand fell by 44 percent, 43 percent and 41 percent.

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When the storm swept through Thailand, New York Times columnist Thomas Friedman happened to be there.

Later, in his best-selling book, The World Is Flat, he described with great applidation that the Thai government had closed 58 major financial institutions and that the private bankers had gone bankrupt overnight. He drove to a party on Asso Street in Bangkok, Thailand's Wall Street, where most of the failed financial institutions were.

As his car slowly passed by these bankrupt banks, the driver muttered to himself at each turn, "Collapse—collapse—collapse—collapse—"

These Thai banks became the first dominoes in the first global financial crisis of the new era of globalization.

Even Asia's most developed countries are not immune.

In South Korea, the attacked won has depreciated by 50 percent in more than two months, and the country's economy is almost on the verge of collapse.

The South Korean government had to ask the United States, Japan, and the International Monetary Fund for emergency assistance, borrowing a record $55 billion, and was forced to promise to implement a strict economic stabilization plan and reduce the economic growth rate, and the economic autonomy was lost for a time.

The South Korean government has issued a belt-tightening policy to all civil servants, requiring them to deposit at least 10% of their salaries in the bank, while citizens voluntarily donate their gold and silver jewelry to their homes.

In the midst of the storm, South Korea's unemployment rate was as high as 11 percent, South Korean companies suffered at least 3 trillion won in exchange rate losses, and the repayment of foreign debt principal and interest increased by 4 trillion won.

A number of large companies in South Korea have declared bankruptcy or are in a desperate situation, including the Daewoo Group, which has been a benchmark for Chinese companies in the past few years.

When the storm swept in, Daewoo, which had been in the midst of rapid expansion, was already heavily indebted, and the company's borrowed funds reached $20 billion.

In the face of the crisis, South Korea's Daewoo Group adopted a series of contraction plans, but at the same time doubled down on the auto business, raising $13.5 billion in short-term debt funds by issuing a large number of high-yield bonds and commercial paper, taking over Ssangyong Motors and Samsung Motors successively, and continuing to advance its strategy as an international auto giant.

By the end of the year, Daewoo's main lender refused to lend further to it, and two years later, Daewoo, which had $80 billion in debt, finally declared bankruptcy.

In Japan, the yen was not directly attacked, but the deflationary effects of the turmoil spread rapidly to all industries. On September 18, Yaohan Corporation, a star enterprise in Japan's retail industry, filed for bankruptcy.

The founder of Kazu Wada, a traditional Japanese woman who started working as a child laborer at the age of 10, started as a small vegetable and fruit shop, and grew into a large multinational company with annual sales of $5 billion and 400 department stores and supermarkets around the world. The Japanese TV series "Ashin", which was filmed based on her life, once set the highest ratings record in China.

At the end of 1995, when the magic capital 1.8 Yaohan opened, a total of 1.07 million customers poured in that day, setting a Guinness World Record.

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The Asian financial turmoil has occurred in China's neighboring countries in turn, and the scene is terrifying. Financial capitalism and globalization have shown their ferocious and powerful destructive side.

This will naturally affect China's industrial economy and people's mentality. Amid the global stock market downturn, China's stock market, which was quite active in the past, has also fallen into a downturn, and the consumer market is even more depressed.

After several years of macroeconomic control, the pressure of inflation has been gradually released, and the inflation rate has dropped to almost zero, but the scene of overcooling consumption has appeared at the same time.

According to the report of the National Bureau of Statistics, by the middle of this year, the total value of industrial inventory products in the country exceeded 3 trillion yuan, and there was a structural surplus, with more than 90 percent of industrial products in excess of demand.

In June, the State Economic and Trade Commission, the Ministry of Domestic Trade, and the Ministry of Foreign Trade and Economic Cooperation had no choice but to jointly set up a national center for the adjustment of inventory commodities in order to speed up the circulation of commodities among enterprises.

Another far-reaching impact of the Asian financial turmoil on the reform of Chinese enterprises is that it has completely shattered people's worship of the business model of Japanese and South Korean conglomerates, and the famous Korean conglomerates that fell in the financial turmoil include Han Bao, the 14th largest enterprise and the second largest steel company, the 19th largest enterprise and the largest brewer Jinro, the eighth largest enterprise consortium Kia, the 12th largest enterprise Halla Group, the 24th largest enterprise Sanmei Group, and the 34th largest enterprise Dailong Group. In particular, the dilemma of the Daewoo Group, which is regarded as a benchmark for emulation, has made the decision-makers rethink the cultivation of large enterprises.

The strategy of "grasping the big" that was just formed last year has unexpectedly changed course.

At that time, the idea of "grasping the big" was to be led by the state, focusing on supporting a number of advantageous enterprises to develop into a consortium model, so that they could become giant companies with international competitiveness and representing China's strength.

However, the vulnerability of the Japanese and South Korean consortiums exposed in the financial turmoil has caused the central government to completely lose confidence in this path.

Even companies like Daewoo can't resist the attacks of international financial capital, so can China's Daewoo-like companies escape this fate?

As a result, a new strategy of retreating from the state and advancing the people has emerged, and its basic idea is that state-owned capital should withdraw from the field of perfect competition on a large scale.

Experts suggest that state-owned enterprises should resolutely withdraw from competitive industries, while forming a strong monopoly pattern in upstream energy industries, including steel, energy, automobiles, aviation, telecommunications, electric power, banking, insurance, media, large machinery, military industry, etc.

In these areas, the government will do its best to exclude competition from private and international capital, and to secure the vested interests of state-owned enterprises by strengthening monopolies, and its role as the owner of state capital will be strengthened, rather than weakened.