Intra-Asia trade and foreign direct investment

This article reconsiders the patterns of intra-Asia trade and the linkages with foreign direct investment (FDI) in this region;The following conclusions are drawn. Firstly, by 1985 intra-Asia trade exhibited both distinct patterns of interindustry trade on the one hand, and intra-industry trade on the other. Secondly, the patterns of trade in this region have not changed since 1985 from vertical to horizontal, but from a "flying-geese" to an "acrobatic" type, due to the sharp increase in FDI within the region. Thirdly, since the early 1990s, FDI began to shift to China due to the wage differentials between China and other East Asian countries. This made the countries of East Asia compete with one another, rushing to obtain capital and financial resources from all over the world - ultimately contributing to recent financial and economic turbulence in the region. The article concludes with some brief policy recommendations on how to avoid a recurrence of the Asian crisis in the 21(st) century.