Asian crisis has a silver lining for U.S.
Asian crisis has a silver lining for U.S.
NEW YORK (AP): General Motors is gearing up to move into
Indonesia. Hewlett-Packard is talking to suppliers about using
more Asian-made components in its high-tech goods. And Dell
Computer is trimming the price of a popular computer.
The Asian financial turbulence, which has buffeted the
currency and stock markets of far-flung economies, may offer
unexpected opportunities and benefits to American consumers and
companies.
"The economic crisis in Asia has a silver lining," said Greg
Mastel of the Economic Strategy Institute in Washington.
Companies making goods in Asia to sell elsewhere may see sales
soar, because with the region's currencies tumbling, products
manufactured there will cost less. Imported goods will be
cheaper, which will help keep inflation cool. And with
inflationary pressures subsiding, interest rates should remain
low.
Other opportunities also may emerge from the gloom.
Thailand, Indonesia and South Korea, in exchange for
multibillion-dollar rescue packages from international donors,
must revamp their economies. Trade barriers are likely to be torn
down, allowing outsiders into their lucrative steel, auto and
financial sectors.
The crisis provides "a historic opportunity for the United
States to convince troublesome Asian trading partners to change
their ways," said Mastel.
However, Asian analyst Charles Morrison of the East-West
Center in Honolulu cautions that "there is a danger in looking
too narrowly" at any advantages offered by the crisis. "Then,
there will be kind of a backlash against us. There is a simmering
view that we welcome and gloat in it... without a realization of
the tremendous dangers."
To be sure, the financial turmoil that has swept through Asia
since the summer poses great risks not only for that region but
for the global economy as well.
A weak Asia, including Japan, the world's second-largest
economy, could stifle economic growth in America, and that could
lead to job losses, maybe even corporate closures.
Wall Street already has been rattled by fears Asia's woes will
hurt profits of American companies.
Still, in the new global economy of increasingly interlinked --
and highly competitive -- industries and financial systems, there
seems to be an upside for some to any downswing by others.
Other companies are eager to gain a larger foothold in
populous Asia with the expected easing of trade and other
restrictions on foreigners. Moreover, with the nations'
currencies reeling, foreigners may be able to snap up local
companies at bargain prices.
General Motors wasted no time in expressing interest in
Indonesia after the nation's president, Soeharto, under pressure
from international donors, agreed to remove tax breaks for its
national car program. The protectionist measures had kept foreign
automakers at bay in the world's fourth most populous nation.
"We now stand ready to... make further investments, including
the introduction of new products, as market conditions become
more favorable," said Donald T. Sullivan, president of GM's Asian
and Pacific operations.
GM also is talking with Daewoo Motors and other South Korean
companies about acquiring all or parts of their operations, said
spokesman Mike Meyerand.