In Canada, the prices of durable and semi-durable manufactured goods, excluding automobiles, have declined by about 1 to 2 per cent per year, on average, over the past five years (although more recently, prices for semi-durable goods have strengthened). Given its endowment of natural resources, Canada has benefited greatly from strong commodity prices.
But, just as clearly, new competition from China and other emerging Asian economies is posing some tough challenges for Canadian manufacturers. Global integration has also been affecting international savings and investment flows. Indeed, in the past dozen or so years, what is sometimes called "financial openness" has increased significantly.