Forbes.com, 8 Dec 2008, Lee Kuan Yew
After the dramatic drops in the New York Stock Exchange following the collapse of Lehman Brothers, stock markets and property values in eastern Asia declined significantly. China's Shanghai index has fallen about 70% this year. Property prices have also dropped, varying in levels among different cities. Visiting Beijing and Shanghai in late October, I found political leaders and businessmen were apprehensive about the coal and iron ore stocks piling up at their wharves as export demands fell.
Asian banks have not been snagged by dealing in securitized derivatives they didn't understand. Their bankers learned their lessons from the 1997 Asian financial crisis. The fundamentals of eastern Asia's economies are sound. With the exception of South Korea, eastern Asia's central banks have substantial foreign currency reserves, limited leverage and low indebtedness, so their governments have the flexibility to use fiscal policies to promote growth and recovery.
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