Trade and capital flows in Asia and Eastern Europe: similarities and differences

Trade and capital flows in Asia and Eastern Europe: similarities and differences

Asia and Eastern Europe are considered as ones of the largest regions in the world. Eastern European and Asian countries have a high potential of growth. It is noted that Asia has achieved the highest rate of trade growth in the world. Eastern European countries also annually increase trade flows. These countries implement different trade policies, but achieve high results. In this paper, we are going to consider an export-oriented model of Asian economies and to focus on analysis of the main trade partners of South-East Asian countries. Eastern European countries are not so open to foreign trade as Asian countries due to a high vulnerability to external shocks. We compare approaches of Asian and Eastern European countries to the development of foreign trade and find some similarities. Trying to deepen our analysis of the development of trade markets in these regions, we consider capital flows in Asia and Eastern Europe. The implication we argue is that the liberalization of trade does influence the capital flows within the countries and vice versa. Moreover, a liberal policy causes problems for developing the local trade and financial markets. To solve such problems is necessary to find a balance between trade restrictions and liberalization.