A rarely mentioned irony of globalisa-tion is that, whereas developed countries are sending more factories and call-centres East, Asia long ago outsourced its capital markets to the West. Asian countries have amassed some $2.73 trillion of foreign-exchange reserves, but rather than invest it in their own region, they have parked it abroad, largely in American Treasuries. As a plentiful pool of liquidity, these funds then find their way back into Asia via institutional portfolio flows and foreign-direct investment.
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