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Less than a month before the seventh anniversary of the collapse of Wall Street heavyweight Lehman Brothers, which triggered a global financial meltdown, world markets are again in turmoil. And the question now is whether we are heading off the same steep cliff despite strenuous efforts by governments, central bankers and regulators to erect suitable safety barriers.

This time, the clues point straight to China as the main culprit. A faltering Chinese economy has already dampened demand for oil, copper and other key commodities. And ham-fisted intervention by increasingly worried officials in Beijing – including a currency devaluation and failed efforts to curtail a stock-market selloff – has only exacerbated investor fears that China and other Asian emerging markets are sliding into economic quicksand.

When the Shanghai composite index plunged Monday, investors around the planet stampeded for the exits.

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But that doesn't mean we are about to revisit the dark days of 2008-09, the tech-stock collapse of 2000 or even the disastrous Asian market crisis of the late 1990s. The takeaway from Monday's market mayhem may be that policy-makers, banks and institutional investors have learned painful lessons from past disasters and don't seem headed for an economy-destroying repeat of any of them.

Major financial institutions have shored up their cash reserves and dramatically reduced their exposure to any single market event.

That, however, could delay any strong rebound in equities, as risk-management models get reworked. Corporations, meanwhile, have slashed debt and strengthened balance sheets to better withstand ill winds.

For the market losses to morph into a new global crisis, there would need to be a transmission mechanism to carry the China blowback into the heart of the global system. But there isn't anything out there resembling Lehman in 2008 or hedge-fund Long-Term Capital Management (LTCM) in 1998. Their failures exposed the financial system to enormous losses in derivatives.

"I don't see anything [today] that could be potentially systemic," said Arthur Heinmaa, chief executive of Toron AMI International Asset Management in Toronto.

"If anything, it feels a little more like the flash crash [of May, 2010,] than anything else." The flash crash was a dramatic 15-minute drop triggered by computerized trading.

The Asian crisis of 1997-98 spread around the world because of derivative exposure throughout the banking system.

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"There could always be something that doesn't become visible until after the fact, so you have to make some allowance for systemic risk," Mr. Heinmaa said.

But so few years after 2008, "I can't imagine that you would have that degree of risk that you had at that juncture."

One potential transmitter of Chinese pain would be deflation, aided and abetted by Beijing's currency manipulations to shore up its own export sector, matched in turn by devaluations of other Asian currencies in what amounts to a new currency war. But whatever deflation is exported from the Far East is unlikely to push the major developed economies into a deflationary tailspin, unless their growth slows to a standstill. That's certainly possible, but it wouldn't make for a good investor gamble. In the meantime, markets are sure to remain volatile; but they are unlikely to plunge us back into the despair of 2008.

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