Lee Myung-bak, President of South Korea, Asia’s fourth biggest economy, said Thursday, the country faces a state of national economic emergency; comments which come just days after Asian markets began showing signs of falling apart, and triggered the single biggest one-day loss since November.

The comments speak with reference to the tightening of Asian financial markets in what is looking like an echo from the U.S. credit crisis. Following in U.S. footsteps, Korea-based automaker Ssangyong Motor announced Tuesday they would be halting production leading to their filing for bankruptcy on Friday due to a collapse of liqudity associated with reduced demand.

Ssangyong fell victim to a fall in sales of over 30 per cent in 2008, the largest ever for the company, a “mostly owned” subsidiary of China’s largest automaking conglomerate, Shanghai Automotive Industry.

The comment arose during what officials say was the first of many government economic status meetings in which key policy officials will get together to attack the international economic problem and prevent it from hurting South Korea. Reports of even further falling exports for South Korea, after December’s announcement of a 18 per cent fall, are expected for sometime in February.

Japan’s Nikkei index has traded down to 8500 mid-trading day Tuesday, from a a peak of just over 9200 Thursday, prior to the news of Asian collapse being widespread. The Hang Seng and Kospi indexes have seen similar crashes.

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