Shanghai is just one example of a real estate boom of enormous proportions in Hong Kong, Thailand, Indonesia and Malaysia. The most damaging part of the real estate boom was that decisions about whether or not to invest in a particular office building were not always based on an objective study of the market. Questionable loans were too often granted for dubious projects. The result was galloping inflation in real estate and land speculation. There is no mystery why the banks in the region are insolvent, they have non performing loans for 100's of billions of dollars.
Many new buildings are vacant.
Asia has painfully discovered that it would have been better all along to let markets decide where investment should be made. The currency crisis is likely to have continuing effects for two or three years on the overall health of the Asian economy in particular the banking and construction sectors. This is a serious situation. However there is every confidence that the region will, for the most part, deal appropriately with the crisis and learn to rely on markets to make investment decisions in the future. The long term economic growth rate in Asia has followed the flying Geese pattern.