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The Composition of The Global Flow of Funds in East Asia

The Composition of The Global Flow of Funds in East Asia. Nan Zhang The 11th International C onference of Northeast Asian Area August 19-20, 2004 , Chang ｃｈ un, China. Contents. The Outline of Analysis Pattern of International Fund Flows in 1990s A Doubtful Circle in East Asia

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The Composition of The Global Flow of Funds in East Asia

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  1. The Composition of The Global Flow of Funds in East Asia Nan Zhang The 11th International Conference of Northeast Asian Area August 19-20, 2004, Changｃｈun, China

  2. Contents • The Outline of Analysis • Pattern of International Fund Flows in 1990s • A Doubtful Circle in East Asia • Problems and Future Prospects

  3. The Outline of Analysis • The Balance of Savings-Investment Financial Surplus or Deficit Current Account 　S - I = △Ａ - △Ｌ ＝ EX - IM

  4. The Balance of Overseas Income and Expenditures • Current account surplus= (fund outflow - fund inflow) + foreign exchange reserves EX - IM = （FO - FI） + FER

  5. The Balance of Financial Markets • Domestic fund outflow+overseas fund outflow+ foreign exchange reserves =Domestic fund inflow+ overseas fund inflow 　DFO + OFO + FER ＝ DFI + OFI The equation above is changed as follows OFO - OFI + FER ＝ DFI - DFO

  6. Balance of Overseas Fund Supply • (Net fund supply to overseas) NOFO + FER (Capital account deficit) = NDFI (Increase in domestic financial assets)

  7. Patterns of International Fund Flows in the 1990s • US Investment Boom: US Investment to Emerging Market • A Doubtful circle: The Returns of Fund Flow to US From The Developing Country

  8. The Current Account of The Advanced Country(US$ billions) Data:IMF,World Economic outlook, April 2004

  9. External Flow of Funds in US(US$ billions) Data: FRB, Flow of Funds Accounts of the United States. 2002.

  10. External Financing of Emerging Market (US$ billions) Data: IIF, Capital Flows to Emerging Markets Economies, 2003

  11. A Doubtful circle in East Asia • Excessive Fund Flows • A Doubtful Circle

  12. Balance of Savings-Investment in East Asia (Percent of GDP) Date: “Asian Development outlook 2004”

  13. Changes in The Current-Account in East Asia (Percent of GDP) Date: “Asian Development outlook 2004”

  14. The Financial Form of The Current Deficit of Developing Asia(US$ billions) Data: IMF, World Economic outlook, May 2003

  15. The Overseas Fund Flows in China • A Doubtful Circle in China • Net Fund Outflows to Overseas

  16. Overseas Fund Flows in China (100 million RMB) Data: The People’s Bank of China Quarterly Statistical Bulletin, 1998-2003

  17. The Flow of Funds in China (The average of 1992-2002, 100 million RMB)

  18. Problems and Future Prospects • The Difference in “A Doubtful Circle” in East Asia • Create the Environment for Stabilized Fund Flows

  19. Thank　you！ To Comment or obtain a copy of full paper: zhang@shudo-u.ac.jp

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