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. Last Updated: 07/27/2016

Analysts See No Simple Panacea for 'Asian Flu'

HONG KONG -- Hong Kong markets endured another turbulent session Tuesday, but economists here say even a few days of rises would not stave off further trouble for the region's once-supercharged economies.

Up and down the western edge of the Pacific, the Asian "miracle" is losing its gleam. After a quarter century of spectacular expansion of wealth, the region finds itself with an unwelcome supply of empty office towers, shaky banks and people wondering what went wrong.

Hong Kong's blue-chip Hang Seng index gave up a gain of more than 3 percent Tuesday to finish down 474.33 points, or 4.21 percent, at 10,780.78, The Associated Press reported.

Traders were unwilling to let the Hang Seng make another run at the 12,000-point level and instead pushed it back below 11,000 points, which seemed to reflect agreement that the Hang Seng was overvalued when it peaked above 16,000 points in August.

Even before the latest move, Hashim Djojohadikusumo, chief of the Indonesian conglomerate Tirtamas Group, said he had never expected the boom that made him one of the region's richest people to continue forever. "But nobody thought it would come down this fast, this soon," he said.

Mark Sundberg, an economist for the Hong Kong office of Salomon Brothers, Inc., said: "We're seeing a real shift in the paradigm of East Asian growth. There's going to be a major and protracted slowdown in the performance of these economies."

Symptoms of the "Asian flu" vary country-by-country:

?In Hong Kong last week the realty market, which has skyrocketed over the past 18 months, began to follow the crashing stock market. Sellers of luxury apartments were slashing their asking prices by up to 20 percent and prospective buyers who had put down deposits were backing out of deals rather than taking possession of properties that seemed likely to lose value.

?In South Korea, the stock market sank to a five-year low last week after fresh reports of troubles besetting the country's largest conglomerates, half a dozen of which have been forced into bankruptcy this year. International credit agencies cut their ratings in recent days on South Korea's largest banks amid fears their bad loan problems are reaching crisis proportions.

?In Thailand, where the contagion of plummeting stock and currency markets started in early summer, layoffs at idled factories have trimmed the work force and more than 50 finance companies have suspended operations.

None of this means that Asia should be written off as a region capable of again leading the world in economic growth, but nor should it be likened to last Monday's 554-point drop in the Dow Jones industrial average, which some economists think had a positive effect of removing some inflationary steam from the U.S. economy.

What's rolling through Asia now "marks a very big structural change in Asia, certainly the biggest in 10 or 12 years," said Jim Rohwer, the Hong Kong-based author of a recently published book called "Asia Rising." Though the region can bounce back, he said, a painful period of eliminating excesses will be required, "similar to what happened in the United States during the 1980s and early 1990s."