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Key facts: The global economy
World financial assets and foreign direct investment

As well as the free movement of goods, there has also been a dramatic increase in the flows of money (capital) around the world.

Banks and private investors now hold trillions of assets invested overseas since the liberalisation of world capital markets in the l980s.

These capital flows are highly concentrated among rich countries and a few developing countries, and can fluctuate from year to year.

While some big developing countries like China have benefited from capital flows, smaller countries have been vulnerable when capital flows suddenly reversed, as in the 1997-8 Asian crisis.


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