ASIAN economies are in a fundamental period of change in a world where the region's supremacy in price competitiveness can no longer be assumed. The test ahead of Asian policy makers and corporate leaders will be their ability to adapt to the new trading environment where increasingly North America is becoming a cheaper and more efficient base from which to operate. Investors attending the formal opening of the Credit Lyonnais Asia Securities Investors' Forum at the Grand Hyatt were told the decade-long bull run in Asian equity markets could be over. The brokerage told the 400 fund managers at the forum that growth in economies and stock market returns in the near future would be more moderate than they have been used to. The reason for this was because Asia is pricing itself out of certain types of business activity. The actual costs of running businesses in the region's financial centres were now comparable or exceeded those of their Western counterparts. Capital flows, especially in the 1990s, tended to favour Asia on the grounds of low labour and land costs in the production of cheap products. The costs advantage Asia had in the past has now been eroded. Credit Lyonnais Securities Asia Senior managing director Gary Coull said the costs of setting up factory units and the costs of labour in certain parts of the United States were comparable, especially after accounting for transport links and location. Corporate policy making hubs could be established more cheaply with a skilled educated workforce pool to draw from in California or the east coast of the US than in many Asian financial centres where the costs of qualified labour and rents have soared. No one would have believed it even four years ago but it appears North America is challenging Asia at its own game. For investors and corporates the option to stay at home, where there was no currency risk, was looking more and more attractive. Asia needs to adapt to this new situation and it needs to adapt quickly if it wants to remain competitive and retain a significant share of the capital cake available for investment along with expansion in the future. More than ever, investors need to examine the investment prospects being shown them extremely carefully, particularly forecast earnings growth. Closing your eyes and picking the top 10 stocks by size or valuation rankings or corporate earnings growth might no longer be appropriate in the future. Good stock and sector picking is going to be essential. Only groups with quality professional management which can effectively meet some of the coming difficulties are going to be among the winners.