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, Chang ｃｈ un, 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