But it is the nature of trade flows as much as their impressive scale that is shaping economic relationships and prospects. While much of this trade involves production of goods, still ultimately destined for the North American and European markets, it also reflects an increased division of labour, product specialization and integration within the region.
For one thing, investors are dealing with companies operating far away, in a very different economic and political environment. For another, financial regulatory and supervisory practices in some of these countries are less welldeveloped and transparent. In addition, investors may have felt rather well “protected” from risks – for a couple of reasons.