[LINK] "Two Big Winners From China's Big Slowdown"

[rfmcdonald]

Bloomberg View's William Pesek notes that despite China's slowdown, some other Asian economies are doing well. This is a consequence of more-informed investors.

How panicked were investors last week about China's stock market plunge? Enough to treat the Korean peninsula, a place that was teetering on the brink of war, as a safe haven. Even as policy makers braced for renewed military confrontation between North and South Korea, the won staged a rally.

That's made South Korean assets one of the few bright spots in a dark time for emerging markets. On Aug. 24 alone, investors yanked $2.7 trillion out of developing nations, with Indonesia, Malaysia and Thailand especially hard hit. It matched the violent September 2008 selloff after Lehman Brothers collapsed.

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It's not hard to explain why many Asian economies are suffering from China's slowdown. Exporters of commodities, who depended on a humming Chinese market, have especially suffered. But why are there such big outliers among battered emerging markets?

The answer is that investors are finally basing their decisions less on herd mentality than nuanced, case-by-case analyses. "Emerging market investors have become a lot savvier," says economist Frederic Neumann of HSBC in Hong Kong. "Gone are the days where emerging markets were all lumped into one bucket. Today, countries with stronger fundamentals are able to resist the spread of contagion washing over global financial markets." Along with South Korea and the Philippines, Neumann notes that even some frontier economies, like Vietnam, "have weathered global financial turmoil with apparent ease."