Are we heading towards an imminent Asian Crisis II? Probably not, at least for the foreseeable future...

摘要

Those of you with a good memory will recall the havoc of the Asian Crisis of 1997-1998. Over-borrowed Asian countries were forced to devalue their currencies compared to the dollar, following a bubble originating in property development and inflated asset prices, stoked by relatively cheap dollar-denominated borrowing. Over-capacity in many industries, built on the back of over-enthusiastic production expansion in the expectation of spectacular future growth, combined with a collapse in demand to calamitously unbalance markets: Building materials were especially badly-hit, with some materials taking a decade or more to grow back to a situation of supply-demand balance. Only towards the end of the 2000s were some Asian markets seriously thinking about new production facilities - after their break-neck expansion of the 1990s.