Globalization of finance

The globalization of finance has blurred the old distinction between developed and emerging markets, turning China into America’s banker - the Communist creditor to the capitalist debtor. It is a change of epochal significance.

Financial globalization means that, after more than three hundred years of divergence, the world can no longer be divided neatly into rich developed countries and poor less-developed countries. The more integrated the world’s financial markets become, the greater the opportunities for financially knowledgeable people wherever they live - and the bigger the risk of downward mobility for the financially illiterate. It emphatically is not a flat world in terms of overall income distribution, simply because the returns on capital have soared relative to the returns on unskilled and semi-skilled labor.