Last time the global economy fell off a cliff, China was able to launch an enormous stimulus package that helped keep itself, and much of Asia, trucking along. Growth, inflation, and asset bubbles followed. What if 2011 is 2008 all over again?

China, and Asia more broadly, still has the firepower to withstand another major drop in global demand – but it’ll have to do it smarter than last time, according to work from Standard Chartered.

Though interest rates across the region are generally lower than they were pre-Lehman, a fall in inflation would boost real interest rates and allow for some cuts. Many Asia governments also have large foreign exchange reserves, while some in region are running surpluses, and others have fiscal deficits that look tame by Western standards. While public debt levels have gone up in the region, “the fiscal positions of most Asian economies remain pretty solid”, says StanChart’s Nick Kwan.