The current Asian crisis is a case of the world capital market overwhelming national economies. Yet the state is not a pushover in the globalization process. Neither is the state in Eastern Asia necessarily the stable, unified institution it was thought to be earlier. The economic crisis is undermining political 'stability,' often provoking nationalist reactions. So far, democratic states have weathered the economic storm more successfully than patrimonial ones, where 'stability' is fragile, but even the 'successful' ones face serious future problems. The political consequence of the crisis for international relations in the region has been to augment the influence of China while reducing that of the US and Japan.