Bubble, bubble, toil and trouble. While most of the world is still focused on stimulating growth, Asian policymakers are increasingly fretting about new bubbles. Bank of Korea minutes released on Tuesday showed its concern about rising asset prices. On the same day the Reserve Bank of India raised its inflation forecast to 5 per cent – far higher than its medium-term 3 per cent goal – and signalled that it is no longer in pure stimulatory mode. Vietnam has already tightened credit. And China this week ordered banks to make sure their mammoth lending spree funnelled money into the real economy, rather than equities or real estate.

The concerns are real enough. Having suffered the popping of a US-inspired liquidity bubble, Asia does not want to make one of its own. So far this year the Chinese market, as measured by the Shanghai Composite index, is up 89 per cent; India has risen 59 per cent. Real estate prices are also marching higher. But tackling bubbles when growth remains the top priority is tough. Tightening at this point, with ultra-low interest rates in the US, would be monetary suicide. Even more foreign capital would flow in – adding to asset inflation and driving currencies higher to boot. Asia is far from ready for that. Year-on-year declines in exports may be slowing, but external demand remains too weak to jeopardise the recovery with higher exchange rates – particularly in an avowedly mercantilist part of the globe.

Asian policymakers are turning to other tools. In China, which retains the right – and, through state control, the ability – to issue edicts, lending can more easily be switched on and off. More targeted measures, such as raising required deposits on property loans, have a more nuanced impact. Korea, having enjoyed some success with this a few years ago, is repeating the format in Seoul in a bid to cool property-market speculation. Marginal stuff perhaps, but for anything more aggressive the US Federal Reserve would need to fire the starting gun.