This is a fascinating economic question that requires considering several important historical and structural factors.

The key reason Japan couldn't easily transfer its real estate bubble risks to neighboring countries was the state of Asian financial markets in the 1980s. Most East and Southeast Asian economies at that time had relatively closed, heavily regulated financial systems with strict capital controls. Countries like South Korea, China, and Taiwan carefully restricted foreign investment and had underdeveloped secondary markets for complex financial instruments.

Additionally, Japan itself had significant regulatory restrictions on financial innovation and cross-border transactions during this period. The Ministry of Finance maintained tight control over financial markets through the convoy system (護送船団方式), which limited the creation of new financial products. Japanese banks and financial institutions weren't able to freely create and sell the kind of complex securitized products that became common in the 2000s.

Even if such products could have been created, there would have been practical challenges:

1. Most neighboring countries lacked the institutional capacity to properly evaluate and trade complex Japanese real estate-backed securities
   
2. The sheer size of Japan's bubble (with land values in Tokyo exceeding the entire value of California) meant that neighboring economies weren't large enough to meaningfully absorb the risk
   
3. Japanese real estate practices like land-only valuations and interlocking corporate ownership made it difficult to create standardized, tradable securities
   

Interestingly, your question anticipates some of the financial engineering that emerged in later decades - the creation of mortgage-backed securities and other instruments to distribute real estate risk. But in 1980s Asia, both the regulatory framework and market infrastructure for such risk transfer simply didn't exist.

What do you think about how this compares to more recent examples of cross-border risk transfer in Asia?

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