Asia's Woes Pose Global Threat; Larger Nations' Ills Make Spread of Economic Flu More Likely
The Asian economic flu is no longer afflicting the region's Little Tigers alone, and it's looking a lot scarier as a result.</br></br>Until recently, the financial crisis that started in Thailand last summer and spread to Indonesia and South Korea was striking only at countries with relatively small economies. But now, much more important nations are coming under financial strain -- and the risks to the global economy are rising commensurately.</br></br>While the United States is well situated to minimize damage and avert recession, the historic brisk economy that the country is enjoying right now faces a far more uncertain future as the financial turmoil begins to engulf bigger victims.</br></br>In Japan, the world's second-largest economy, the yen and the stock market have gone into a tailspin in recent days amid a slew of bad news capped by a government report Friday confirming that a recession is underway.</br></br>In China, fears are mounting that slowing economic growth will force the government to devalue the nation's currency in an attempt to make its products cheaper abroad and ring up more export sales. Fears that that was about to happen helped send currencies and stock prices tumbling last week in developing countries all over the world that compete with cheap Chinese products.