Clark,
I consider your points important to what's happening in Asia.
In a recent conversation with the CEO of a HK based, China manufacturing company, the biggest challenge they seem to be facing is 'uncertainity', a general lack of stability. Customers are reducing inventories to raise cash (in $US). Customers are placing smaller orders because of the potential for further currency devaluations.
In Japan, South Korea, and the ASEAN countries, the currencies have been devalued and it offers them opportunity for growth, but the instability prevents it. Their banks are all tightening policies. Short term, any companies that have large debt are in trouble. Longer term, the banking policies will prevent companies that have the opportunity to grow will not be able to because they cannot obtain needed capital.
Companies in China are in a 'catch 22' in that they need a yuan devaluation for competing now, but know it wouldn't help them long term. They have the capital available, but there is no point in further investment until everything settles down. The hope of this man's company is that stability will bring demand to former levels with some foreign competition gone and others unable to expand. In the meantime, they must do what they can to ride it out and put more emphasis to generating sales in the domestic China market than they had in the past.
FWIW,
Ron
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