China, India to be biggest investors by 2030: report

WASHINGTON Fri May 17, 2013 1:09pm IST

1 of 2. Labourers work at the construction site of a flyover on the outskirts of Ahmedabad October 5, 2012.

Credit: Reuters/Amit Dave/Files

Related Topics

Priyanka Gandhi Vadra, daughter of Congress party chief Sonia Gandhi, adjusts her flower garlands as she campaigns for her mother during an election meeting at Rae Bareli in Uttar Pradesh April 22, 2014. REUTERS/Pawan Kumar

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

WASHINGTON (Reuters) - The percentage of global investment that goes to developing countries should triple in the next two decades as emerging economies catch up to richer nations and become more integrated into financial markets, the World Bank predicted in a report on Thursday.

These nations and their comparatively younger and bigger populations are also set to become the largest sources of capital, with China and India turning into the world's two biggest investors by 2030, the global development lender said.

The shifting landscape of saving and investment has profound implications for everything from which currencies will dominate global markets to the rise of new financial centers, patterns of capital flows and investment priorities.

But policymakers are still woefully unprepared for the changes, fixating instead on what will happen in the next three to six months, Kaushik Basu, the World Bank's chief economist, said.

"The big question that should concern us all is what will happen to the major drivers of growth and development: namely savings and investment," Basu told reporters ahead of the report's release.

"In some sense, some of the global economic turmoil that we are seeing today are some of the early indicators of the kind of turbulent period that the world is going into," he said.

Standard & Poor's earlier this week predicted that Chinese non-financial companies will overtake U.S. companies in their borrowing needs over the next two years.

By 2030, for every dollar invested in the world, 60 cents will flow into developing countries, a dramatic change from 20 cents to the dollar in 2000. China will make up 30 percent of all investment activity, while the United States will have 11 percent and India, 7 percent.

The numbers assume the world will grow on average 2.6 percent to 3 percent a year in the next two decades, while emerging economies will grow 4.8 to 5.6 percent a year.

For a full set of assumptions and figures, see http://www.

As more capital flows from one developing country to another, known as South-South flows, China's yuan currency and its monetary policy will have a greater impact on the rest of the world, reducing the influence of U.S. and euro area policies.

A richer world in 2030 will also have a greater demand for services over manufacturing, meaning countries will face pressure to reduce protectionist barriers to trade in services, the World Bank said.

But shifts in global saving may not be equally distributed in each country, warned lead report author Maurizio Bussolo -- a key concern for the poverty-fighting World Bank. In most developing countries, the top segment of the population saves three to four times more than the poorest.

Governments must make an effort to level the playing field in education, which has a strong correlation with higher earnings, savings and future wealth, he said.

"So in terms of our projections, we see the increased importance of developing countries. But behind that, there is a lot of work to do, and very little time," Bussolo said.

(Reporting by Anna Yukhananov; Editing by Cynthia Osterman)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see
Comments (1)
CommunalAward wrote:
Unlike US/UK, Arab nations are quick to realize Hinduism is nothing but covert mask for uncivilized Caste system.
Google “Companies ruined or almost ruined by Forward Caste”

May 17, 2013 4:43pm IST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared


Monsoon Forecast

Monsoon Forecast

South Asia monsoon seen below-average to average in 2014 - WMO.  Full Article 

Solar Dispute

Solar Dispute

Green groups urge U.S. to drop solar trade case against India.  Full Article 

Oil Imports

Oil Imports

India to make May-July oil payments to Iran - sources.  Full Article 

Facebook Earnings

Facebook Earnings

Facebook Q1 revenue grows 72 percent on rising mobile ads.  Full Article 

DLF Shares

DLF Shares

DLF slides 3 percent, underperforms rivals.  Full Article 

Rice Exports

Rice Exports

India may cede top rice exporter spot under Southeast Asian price onslaught.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage