With reference to http://www.todayonline.com/Commentary/EDC100507-0000108/A-tsunami-of-cash-is-headed-for-Asia.

Below are my views:

With more investment capital coming to Asia, there arises a few situations. First, this might mean more capital for countries to expand their economy. However, these countries government needs to ensure that these capital are here to stay for a long period of time. Otherwise, it would lead to asset bubbles when inflation rises faster than the rate of investment return. Hence the question is how to monitor this incoming capital? how to redistribute the newly generated wealth due to these capital evenly? An unevenly distributed capital will lead to the widening between the rich and the poor , leading to social instability and later to capital instability. how to allocate these capital to the desired economic sector? Without proper intervention by the government to place or influence capital to its nation natural competitive advantage, certain sectors such as the financial markets and real estate market will boom and also lead to unbalance economic growth.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s