Ask your lunch partners how the Asian financial crisis has affected their businesses and youll likely get a blank stare.


But ask Tom Hill of Spokane computer-printer maker Output Technology Corp., or Richard Hanson at heavy-equipment manufacturer RAHCO International here, or Makoto Yoshida at Post Falls grass-seed purveyor Jacklin Seed Co. Theyll describe for you a world much smaller than we sometimes perceive it.


As with many international events, the tangible effects from the economic woes that have brewed in much of Asia these past months are difficult to see back home unless you peer into the companies and organizations here that count on international markets for their revenues.


Take Hewlett-Packard Co.s Spokane division, which makes testing equipment primarily for the wireless telecommunications industry. Plans there to add 50 additional employees this yearmost of them engineersnow are on hold, thanks in part to whats being called the Asian Contagion.


Asian sales are probably down 40 percent, says Jim Rundle, general manager of H-Ps Spokane division. I havent watched orders so closely in years.


Rundle says that two thirds of the divisions sales are international, and a good portion of that is in Asia, where most countries have been rocked by currency devaluations or recession or both.


Korea was a substantial source of business, and we havent had a net order from Korea in six months, says Rundle.


In response, he says, H-P has more vigilantly sought business in healthier countries where cell-phone manufacturers are scrambling to grab market share from their beleaguered competition in Asia.


Other than that, were a lot more cautious in our spending, Rundle says. We wont end up hiring all the people we had planned to. Well retarget in the fall.


For Jacklin Seed, a subsidiary of Boise-based J.R. Simplot Co., grass-seed sales are browning these days in Asia, where Jacklin had been capitalizing on the rising popularity of golf and aggressive real estate and infrastructure developments.


Our customers in Japan are suffering, says Makoto Yoshida, an international marketing and sales representative for the longtime exporter. No new construction. Not many people golfing like they used to.


I dont have exact numbers, but my gut feeling is our business is down about 20 percent there, says Yoshida. Its been a tough situation for us.


He says that although the overall economies in Asia are poor, a few of Jacklins distributors there remain healthy. Its distributor in Korea, which has been among the worst hit Asian countries, is buying more this year than last, says Yoshida. In the Philippines, where Jacklin still does relatively little trade, its volume will remain level because of one big sale there, he says.


At Output Technology, which makes high-speed impact and laser printers, Asian exports are down by half over last year, estimates Tom Hill, the companys international sales manager.


Last summer, Output Technology landed a sale in Thailand for 150 laser printers, but before the product could be shipped, the baht, Thailands currency, plummeted in value, and Output Technologys customer no longer could afford all the printers at once. Instead, Output Technology began shipping the printers in small batches over a period of months; the final shipment left Spokane only recently, Hill says.


The Spokane Valley companys sales also dried up in South Korea, he says. Theres very little action there now, aside from some (printer) ribbons and other supplies, Hill says. People seem to be waiting to see whats going to happen next.


Spokane colleges also have been affected, as Asian families have found it difficult to afford schooling abroad with their native currencies worth far less than they were even a year ago.


Weve definitely seen a decline in applications (from Asian students), says Dale Goodwin, spokesman at Gonzaga University. Weve had a 10 percent drop over the same time a year ago. Were also seeing some students dropping out in midterm.


Korean enrollment has fallen in half, from 20 students to 10.


Gonzaga, Goodwin says, has made efforts on a case-by-case basis to help Asian students find hardship grants and to get work permits to earn money here for school.


Having fewer foreign students in Spokane might have a significant effect on the economy here. In a recent study for the Spokane Regional International Trade Alliance (SRITA), researchers found that foreign students annually infuse between $12,000 and $26,000 each into the Spokane economy, and that Japan is the No. 1 country of origin for Spokane-area foreign students.The crisisThough theories abound as to when and why Asias financial troubles really began, the crisis itself dawned by most accounts when Thailands baht began to devalue against Western currencies in the second half of last year. That, in turn, triggered currency devaluations in most of the other Asian countries, some of which already were facing economic troubles.


With weak currencies, the Asian countries received less for their exports and paid more for the imported components they needed for their products. Financingnot only for domestic projects but also in the form of the letters of credit needed to export goodsbecame scarce. Domestic spending also fell.


What has that meant to U.S. exporters? In general, exports to Asia have fallen sharply because demand there has softened and because Asian buyers have sought products from other countries whose currencies havent strengthened so much against theirs.


On the positive side, it has meant that U.S. consumers can buy Asian imports at lower prices. Also, with the Asian marketplace in turmoil, international investors have found the U.S. dollar and U.S. financial markets more attractive, which has helped keep the stock market here strong and interest rates low.


Some prognosticators had predicted far more serious effects here from the Asian Contagion, but U.S. producers seem to have found enough replacement demand both domestically and in foreign markets that remain relatively strong, such as Europe. Observers say the effects from Asia are there, but arent as obvious amid the otherwise rolling U.S. economy, though the stock markets have suffered some.Indirect effectsWhile that seems also true here, peeling back a layer of the economic onion reveals very obvious effects for some.


We absolutely ran into a cliff when all this started, says Richard Hanson, president of RAHCO International, which principally makes specialized mining and canal-digging equipment. There was no warning; business just fell off instantly.


In RAHCOs case, the effects of Asias woes were somewhat indirect. Though it sells equipment all over the world, one of its most active markets is Chile, where the mining industry is expanding. Chile trades a lot with Indonesia, and that trade is falling, says Hanson. Thats affecting the economy in Chile.


The Asian Contagion also has pulled down copper prices, which has made mining companies skittish about investing in expensive new equipment. A lot of people have gone into a wait-and-see attitude, Hanson says. This is going to last for a while, so we need to establish some strategies to pursue other business opportunities.


His concern has been echoed in the recent earnings reports of mining companies, which blame lower zinc, lead, and copper prices on Asias problems.


Meanwhile, Kaiser Aluminum & Chemical Corp., which stood to lose big from the crisis, so far has weathered the storm, says spokeswoman Susan Ashe.


Weve been able to manage the problem, Ashe says. We have had no net loss in volume. We could have had, but we havent. We think the worst is over, but the recovery may take awhile.


About 30 percent of the production of Kaisers Trentwood rolling mill in the Spokane Valley is exported in the form of stock for aluminum beverage cans, and almost all of that portion heads to Asia, she says. Only a small fraction of Trentwoods production for the aerospace, transportation, and industrial markets ends up being exported, Ashe says, and in that sector Kaiser has felt no impact whatsoever from Asias woes.Wheat and wineEastern Washington wheat farmers also have been hit by the Asian crisis. Prices for soft white wheat are roughly $1.50 a bushel below what they were a year ago, says Tom Mick, CEO of the Washington Wheat Commission. Prices, he says, have been driven down by bumper crops worldwide and by bargain hunting. Asian buyers, who are key customers for Washington grains, are shopping for cheaper wheat (than the U.S. has to offer) and theyll find it, says Mick.


Sheldon Woods, a professor of Asian history at Boise State University, says the contagion could last a while. People are going to be going back to agriculture in those countries, says Woods, who spoke recently on the effects of the Asian crisis at an Idaho Department of Commerce trade conference in Boise. You cant make air conditioners or cars when nobodys buying them. Theyre going to go back to agriculture and thats going to have a negative impact on our agricultural exports here.


Even Spokane-area winemakers have seen sales turn to vinegar as a result of Asias problems. Two summers ago, Arbor Crest Winery seemed to be on the verge of a breakthrough in Asian markets when it unexpectedly hosted visits by a handful of wine distributors who were touring the Pacific Northwest in quest of wine for export to Asia, says Candace Frasher, director of international communications and sales at the Spokane Valley winery.


We were very excited, says Frasher, who recalls buyers of wine for export to Taiwan, Thailand, and Hong Kong stopping by for tours and tastings. But just as we were getting our feet in the door, this economic situation took place. We ended up losing some of the new orders we landed, and now there is very little activity.


All may not be lost, though, she says. These people are not gone. They know about us now and we keep in contact. When things are good again, we should see some orders, Frasher says.Seattle port feels punchJust how important the Asian marketplace is to Spokane exporters isnt entirely clear. Because Spokane isnt a port city, no statistics are readily available to measure imports and exports to and from the Far East.


What is known is that 17 percent of the exporters here polled by SRITA this winter said they export to Northeast Asia and 8 percent said they export to Southeast Asia. Japan ranked second in the poll (trailing Canada) among specific countries listed as currently receiving exports from Spokane-area companies. South Korea ranked fifth and Taiwan ninth.


Its also known that Japan is Washington states top export destination, and that Korea, Taiwan, Singapore, Hong Kong, and Thailand also are in the top 10, according to the Seattle-based Washington Council on International Trade.


Washington exporters clearly are feeling the pinch from the Asian crisis, says Patricia Davis, president of the council and a Port of Seattle commissioner. Asian exports through the Port of Seattle during the first quarter of this year fell 25 percent, compared with the year-earlier period, she says. As anticipated, Asian imports through the port soared 37 percent in the first quarter, reflecting high demand here for cheaper Asian imports.


James Hellwig, director of the Spokane office of the U.S. Department of Commerces International Trade Administration, says hes had great difficulty since the crisis began in finding representatives in Asia willing to market Eastern Washington products there.


Its a very common pattern for them to say, Listen, we really shouldnt be doing this right now. Lets wait until this situation subsides, Hellwig says.


Asia has hurt us dramatically, he says. People have just stopped buying. U.S. products simply arent competitive (there) at all right now, especially for consumer products and light industrial.


Hellwig is advising companies here to divert more of their attention to Latin America, where he says the market is ripe, the timing is good, and, We can beat the socks off our Asian competitors simply because of transportation costs.


So how long will the so-called Asian Contagion last? Crystal-ball estimates range from a year or so to several years.


Nobody knows how long and deep this things going to be, says U.S. Bank chief economist John Mitchell. And now we have the added situation of nukes (referring to Pakistan and Indias nuclear tests). It is a big wildcard that has both positive and negative effects.


And those effects, Mitchell says, are felt in industries ranging from agriculture to aerospace and from engineering to education.


Warren Gross, managing director and president of the Seattle-based Export Assistance Center, says that although the Asian countries may have a long road to recovery, some have learned important lessons and already are taking steps to correct the crisis.