(FORTUNE Magazine) – Western companies will have to hurry to catch up in Asia. Every three days a new Japanese factory opens in Thailand. Hong Kong multibillionaire Li Ka-shing already broadcasts television programs, with commercials, to the whole, huge region via his own satellite in space. Increasingly, trade among Asian nations has replaced trade with the slower growing U.S. as an engine of regional expansion. Asian capital -- from Japanese and Overseas Chinese -- has become more important than investment from the West. George Yeo, Singapore's deputy foreign minister, worries that American and European companies are not being aggressive enough. Says he: ''It's not in our interest being dependent on just Japan.'' A swirl of business activity is creating a more cohesive market. Southeast Asian governments are preparing to endorse a regional free-trade area and talking about a broader Asian economic bloc. Japan is moving older industries into lower-cost Asian lands, and so are Korea, Taiwan, and Hong Kong. Likewise, Singapore is spreading its labor-intensive factories into neighboring Indonesia and Malaysia. China is still stagnating under the doctrinaire Communists hanging on in Beijing. But in southern China, where the old men at the top seem to have little influence, free enterprise is still alive, fueled by capital from Hong Kong and Taiwan. George Baeder, head of Pacific Rim Consulting Group in Hong Kong, has it right: ''Asia is clearly emerging as the largest market in the world.''