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Experts advise firms investing in region to stay well informed, remain cautious.
Companies cracking open fortune cookies hoping to find a prediction of a bright future in Pacific Rim markets might be surprised by the message inside. Industry analysts examining the region, which once held Dromise of innovative technologies and endless opportunities, are issuing warnings to wait and see how the area's economic crisis plays out before investing in the region.
Experts believe the area's financial situation will certainly affect growth and development and add that a number of other factors will also play a part in Pacific Rim corporate survival into the next century. A troubled economy decreases the purchase of high-technology goods as well as air travel, and airlines are big customers of communications and navigation equipment.
However, while the United States is tak ing a critical look at defense spending, the volatile nature of the area supports at least constant influx of government spending into the military, according to regional analysts. Because technological developments often stem from defense programs, continued support in this arena may sustain innovation.
At the same time, the United States government, and specifically the Commerce Department, has been closely monitoring economic and political events in the Pacific Rim region. The department is informing and advising American firms while encouraging them to find the best ways to nurture the region's industry, recognizing that today's global economy requires worldwide economic stability.
Strategic partnerships between U.S. and East Asian firms are one indicator of the extent of the global economy, according to Jerry D. Weltsch, industry analyst, defense and aerospace group, Frost & Sullivan, Mountain View, California. In China, for example, Honeywell, Minneapolis, has established partnerships with Mitsubishi, Chaen du Aero Instrument Company and Shanghai Avionics Company. Rockwell Collins, Costa Mesa, California, has joined forces with the Chang Fene Machinery Plant and the Leihua Electronic Technology Research Institute.
These companies have chosen to invest in Chinese companies because of the large size of that market, Weltsch says. In the early 1990s, industry analysts predicted double digit growth in China's passenger air travel for the vears 2005 throush 2015.
Despite a downturn in the economv, 1997 growth in this arena was 9.7 percent, and experts predict this growth rate will...