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A Weekly Digest of The World's Financial Press: Business Week

Comment on the enthusiasm over the resurgence of Asia's economies

Tuesday 27 April 1999 18:02 EDT
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GROWING EUPHORIA over Asia's economic rebound is starting to echo the exuberance of the days just before its crash. Stock markets in Hong Kong and Seoul are nearly back to their all-time highs. The message is that Asia is "fixed" and we can all pick up where we left off nearly two years ago. Wrong. The critical regulatory and economic reforms needed to sustain a rebound are only half-done. Unless they are completed, hopes of reviving double-digit growth are misguided. Thailand has bottomed out. Indonesia remains a political powder keg. And Malaysia has implemented little economic reforms.

The strength of Asia's two biggest economies - Japan and China - is also in doubt. The IMF expects Japan's economy to shrink again in 1999. Meanwhile, China's economy is being kept afloat by enormous public-works spending. With state enterprises shedding millions of workers, exports weak, and its banks in trouble, China is struggling to maintain growth.

- Editorial comment

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