What to make of financial markets in emerging countries?

We will look at China, India, other Asian emerging countries, Africa, Latin America and Mexico. As a result of : The abundance of liquidity; The stronger growth in emerging countries, particularly in Asia, than in OECD countries; The far higher interest rates in emerging countries than in OECD countries , we should expect major capital flows to emerging countries, a sharp rise in their equity markets, and an appreciation of their currencies. These developments will occur even if emerging countries suffer from serious imbalances: in some, external debt; in others, a sharp increase in domestic debt.