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To: Jess Beltz who wrote (4988)	3/16/1998 8:45:00 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 10921

Jess, "The Japanese Banking sector holds $21-23 Billion (US) worth of Indonesian loans, and almost certainly the vast majority of those are in default, " The Prime Minister of Japan flew to Indonesian a couple of days ago. It was an unplanned visit as far as I can tell. I thought he was just going to have some tea with Suharto. Are you telling me that he had a hidden agenda? Ramsey

To: Jess Beltz who wrote (4988)	3/16/1998 10:55:00 PM
From: dfloydr	Respond to of 10921

<<the Malaysian property sector has way overbuilt, and there will be a ton of defaults on loans to property developers in Malaysia, none of which so far have been recognized.>> Friends left Malaysia a year ago reporting that there was a great deal of empty office space and no takers. The news is old, the awareness is new. As I recall there have been several drops in their currency value this past year. Remember their Prime Minister was complaining about Soros's positions taken against their currency about this time last year. The burden is huge and has been held up by their usual govt. support which can not go on forever. Floyd Russell

To: Jess Beltz who wrote (4988)	3/17/1998 12:13:00 AM
From: Ron Bower	Read Replies (1) \| Respond to of 10921

Jess, If you read my post, I totally agree with you on the problems of Japan and the ASEAN countries. I also agree that it will cause complications for HK and China banks. However, they have not relied on foreign capital as the other banks in the region and have large reserves to defend both the currency and bank solvency. I don't feel you can legitimately apply the problems of the region to HK and China. I think we both understand that the 'crisis' in Asia was due to Japan/ASEAN ignoring the threat China's conversion to capitalism brought to the area. Formerly successful companies began losing money and, instead of cutting back, they went to the banks for more. The banks, instead of forcing the companies to honor prior commitments, extended them additional credit at higher interest rates. This continued until the first default caused the whole mess to fall. China devaluating the Rmb would exasperate the Asian situation causing further devaluation of other currencies and a cascade of bankruptcies, companies=banks=governments, throughout all of Asia. Fortunately, the Government of China realizes this and has vowed to keep the Rmb stable. This position has been repeatedly stated. We must not forget that China controls it's own currency value, not the market. China has chosen to stimulate it's economy by spending vast amounts of monies on infrastructure and telecommunications. At the same time, they are reducing the cost of government, privatizing government owned businesses (to raise additional capital for infrastructure), plus other programs designed to make Chinese businesses more competitive. Hard times for China? Yes, but they have designed excellent plans to make sure the hard times are nothing like the problems facing the rest of the region. Current unemployment is 2.9% and it will be going much higher, but the government spending and industry growth will offset much of the austerity of the other programs. For China, their totalitarianism is an asset with the right people in charge. They need not cater to voters, unions, external pressure, etc. in their efforts to maintain a stable economy. Some companies in the region have been operating very conservatively and are in an excellent position to capitalize on the current situation. My post was in reference to Deswell because it is one of the companies that will benefit the most. With no debt and US$30M cash (have always kept cash in $US), they are in position to benefit from manufacturing in China and the financial problems of other companies in the region. They have been constantly expanding, showing 50% annual growth from internally generated funds, and are now in a position to make acquisitions or further expansion. There are other companies in the area with similar operations that will do very well. Not meaning to argue, just present my view. I feel certain HK/China companies to be an excellent place to invest at a time when others have bailed out and companies are selling far below value. For what it's worth, Ron