Fisher Investments on Emerging Markets

Chapter 2. LIONS, TIGERS, AND DRAGONS, OH MY!

Tigers are revered in East Asia as both religious and cultural icons. They are the national animal in some countries and appear on the flags of others. Dominant throughout consumer culture, their likeness peddles everything from airlines to candy. For all their symbolism of power and strength, however, wild tigers face oblivion. The March 28, 1994 issue of Time magazine was ominously entitled "Doomed. Why the Regal Tiger Is on the Brink of Extinction."

The financial history of East Asia has fascinating parallels with the history of its feline mascot. The latter part of the twentieth century was a time of explosive growth for economies in the region. The World Bank famously popularized this phenomenon with its seminal report in 1993 entitled "The East Asian Miracle."^[21] But, much like the fate of the wild tiger, the region teetered on the edge of collapse by the end of the decade as the Asian Financial Crisis decimated economies and markets. A thorough analysis of this period will leave investors with a fundamental understanding of its legacies and how it shapes policies and market behavior to this day.

Finally, no view of Asia would be complete without a discussion of the 800-pound dragon in the room, China. Largely unscathed by the aforementioned financial crisis, it went from Communist afterthought to one of the world's most powerful and intimidating economic forces in mere decades. Yet, despite its economic prowess, its relevance to ...