No Credit Crunch in Asia

The global credit crunch and the PRC's overheated economy gives cause for investor uncertainty but Asia, at the moment, is not affected by the credit crisis, according to a Merrill Lynch analysis report.

“Global credit markets are in trouble, but there are few signs of a credit crunch in Asia, in our view,” said TJ Bond, economist at Merrill Lynch. It is true that the credit crisis has now spread to many regions outside of the US, but only 4% of outstanding credit is accounted for in Asia, he said.

“Compared to the US, we think Asia stands at very different points in its investment, credit, and housing cycles,” Bond said. “The market for domestic credit is not globalized, and not subject to contagion as the US credit cycle turns down.”