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China and India will be the largest investors among developing countries in 2030, accounting for 38 per cent of the global gross investment, says a World Bank report released on Monday. The two countries will also account for almost half the global manufacturing investment, it says.
The report, titled ‘Capital for the Future: Saving and Investment in an Interdependent World’, said India’s share in global investments is expected to almost double by 2030.
“No other country except China will be investing more than India globally,” said the report. However, most of the investment might come from China since the report also said Brazil, India and Russia will together account for more than 13 per cent of global investment. This means India's share will be less than 13 per cent. The combined share of Brazil, India and Russia will be more than that of the US in 2030.
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“In less than a generation, global investment will be dominated by the developing countries... China and India are expected to be the largest investors,” World Bank Vice-President and chief economist Kaushik Basu said.
Developing countries’ share in global investment is projected to triple by 2030 to three-fifths, from one-fifth in 2000. This might change the landscape of the global economy and make the world’s economies more integrated than at any other time in history.
Projections were made on the basis of two scenarios in the report. One, the gradual convergence scenario in which structural factors are assumed to evolve in a fashion consistent with their historical patterns. The other is the rapid convergence scenario in which structural transformations are assumed to break away from historical trends and proceed more quickly.
In the case of gradual scenario, China's share in world investment is likely to be 30 per cent in 2030, says the report.
Strong economic growth will underpin China’s leadership in global gross capital formation over the next two decades.
Elsewhere in the developing world, robust growth will be associated with high investment rates as well, the report said.
In fact, developing countries’ share in global investment is projected to triple by 2030 to three-fifths, from one-fifth in 2000. This is expected to change the landscape of the global economy and make the world’s economies more integrated than at any other time in history.
Among high-income countries, relatively strong institutions and continued technological advantage will mean that investment rates remain fairly stable, at around 17 percent of output.
In terms of volumes, investment in the developing world will reach $15 trillion (in 2010 dollars) versus $10 trillion in high-income economies.
