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Two Independent Television News reports, one on South Korea and one on Hong Kong, explore the impact of the Asian economic crisis.

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IAN WILLIAMS, ITN: In Kwangju, the Ho family are among those who have been taking to the hills. It's their way of escaping the economic storm that's it the city below, and as hardship bites, it's a cheap pastime. The people of this former tiger economy enter the year of the tiger with their old sense of certainty and security swept aside. It's been replaced by despair and anger. They blame the authorities, their bosses, even themselves, but most of all, they resent the conditions being imposed on Korea by foreign bankers.

CHOO YOON HO, Car Worker: (speaking through interpreter) I feel that the IF conditions are too harsh. They're demanding that we sacrifice too much of the lifestyle we're used to. It's too hard on the Korean people.

IAN WILLIAMS: Mr. Ho works for Asia Motors. It's part of the Kia Group, one of the first of Korea's huge conglomerates to collapse under a mountain of debt. Almost half the workers have been laid off, and those who remain are being paid only intermittently. Even the most militant unions do now accept that large-scale jobs losses are inevitable, but they want the burden shared, a social welfare system created, before they'll accept IMF demands for the introduction of a bill, ending a job for life.

YOON YOUNGMO, Korean Federation of Trade Unions: It is possible for labor to contemplate and to begin to talk about accepting in some form or some degree of the redundancy, but let's say if the government goes ahead and introduces the bill without any other measures, then it'll I think still give rise to massive action and massive resistance.

IAN WILLIAMS: The man who must take to the difficult decision is President-Elect Kim Dae-Jung. So far, he's promised to close bankrupt companies and reform the labor laws. That even impressed George Soros, the financier demonized elsewhere in Asia.

RICHARD WALLACE, Dresdner Kleinwort Benson: Foreign banks, both European banks and American banks, have considerable exposure in Korea. They have a lot of loans outstanding to Korea. Clearly, if Korea were to default and not be able to pay for those loans, that would have implications on financial institutions, especially banks, throughout the whole of the western world. And that would have a serious effect on a number of western economies.

IAN WILLIAMS: But even if Korea does pull through, the West won't escape the impact of this crisis. Korea, as elsewhere in Asia, is determined to export its way back to economic health, sending a wave of goods abroad, the devalued currency making their products much cheaper. At the crippled Kia plant in Kwangju the management also see this as their key to survival. And Korea is also drying up as a market for foreign goods. In Kwangju, as elsewhere, there's a campaign to cut down on spending, particularly on imports. The local travel agent has sold a ticket in weeks, as Koreans stay at home to save foreign currency.

JOO HWAN, Travel Agent: (speaking through interpreter) This is usually the high season. Because of the IMF conditions, there's absolutely no business.

IAN WILLIAMS: Six months ago it was all very different for Mr. Joo. (song in background) Business was so good he used the profits to open a karaoke bar. Now, customers stay at home, leaving him to brood about the future of his businesses and of the Korean economy. That's a worry now shared by financial centers around the world.

JIM LEHRER: Now, Mark Austin of Independent Television News has a report from Hong Kong, where the Asian economic crisis is one of many headaches for the new Chinese government

MARK AUSTIN, ITN: Barely had Hong Kong begun to celebrate its now official Chinese identity when it suffered a fall every bit as dramatic as that experienced by its popular leader, C.H. Tung. Unkindly, this mishap came to symbolize the slump in Hong Kong's fortunes, a slump that worsened today as the stock market and property prices continued to fall, and all this as tourism takes its biggest dive in decades.

SPOKESMAN: So this is real exciting moment for us, so welcome to all of you.

MARK AUSTIN: The sightseeing buses are nearly empty. Luxury hotels are only half full, and the western designer shops normally packed with Asia's free spending nouveau riche are practically deserted. The pearl of the Orient, it seems, is losing its luster. After 20 years in business, retailer Woo Man is making his last sale. He's giving away this mink at less than cost price. The signs announced that today he's closing down his leather and fur shop. The stock is being cleared out, and, like many others here, Mr. Woo says he's broke. All the tourists have gone, he says, and all the business is gone. Tourism chief Amy Chan admits Hong Kong is in the doldrums and blames the problems on the currency crisis and economic turmoil of her Asian neighbors.

AMY CHAN, Tourism Director, Hong Kong: And as soon as the currencies start to depreciate, it affects the desire to travel and to spend money outside of their own countries.

MARK AUSTIN: And now to compound the problem there's an outbreak of bird flu, the new mysterious killer virus originated from chickens and which now threatens the human population, one more reason why the terrorists are staying away. Of course, none of these problems can be linked directly to the handover but some argue that with the end of British rule here weren't a large part of Hong Kong's attraction as a tourist destination as a quaint outpost of colonialism in the heart of Asia. Suddenly, Hong Kong's looking for a new identity.

AMY CHAN: People will tend to think, oh, you are now part of China; you are probably exactly like the rest of China. And you've lost all this here as a British colony. And we don't want people to think this way.

MARK AUSTIN: So now they're pushing a new image of sophistication and service with a smile. Even China's People's Liberation Army are swinging into the act, emerging from their Hong Kong barracks on a charm offensive designed to reassure locals and visitors that they've nothing to fear. But, ironically, it's not Communism but capitalism that's causing the real problems here. And as people watched their fortunes dwindle again today, and with no end in sight to the economic turmoil across Asia, the realization is dawning on everyone that even Hong Kong is not immune to the gloom.

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