THAT Asian economies are in much better shape than in 1997-98, when the region was caught up in an unprecedented financial crisis, ought to be reassuring. That officials feel the need to keep making this point is less so—and many investors fear the worst. From South Korea to Indonesia, exports are falling and economic growth is sputtering. Currencies have weakened (see chart), with the Indonesian rupiah and the Malaysian ringgit falling to their lowest levels against the dollar in nearly two decades. Meanwhile, the debts of companies and households are rising. Above all Asia’s locomotive, China, is losing power. The question is how much worse things can get—and whether official assurances of resilience are to be believed.
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