China’s inward investment will exceed that of the US by 2014 as global corporations continue to expand investment in emerging economies, according to a survey of senior corporate executives.

KPMG’s polling of more than 300 executives found that by 2014, 24% of respondents consider China will be the world’s top investment destination, followed closely by the US at 23%, Russia at 19 % and India at 18 %.

Advertisement

Corporations are investing in emerging economies in a quest for access to new customers and more cost-effective operating conditions. Investments in consumer services in China are projected to match those of the US by 2014, while China becomes the world leader in industrial products and mining, and should also see significant investment in IT and telecoms, said the report.

It also predicted increased investment activity in Brazil, Russia and India, which will help fuel economic growth and build sustainable infrastructure.

China draws less than 8% of global FDI inflows, according to statistics from the United Nations Conference on Trade and Development (Unctad), whereas a study by Ernst & Young found 41% of top business leaders surveyed ranked China as the most attractive investment destination.

This reinforces the widely held perception of China as the world’s emerging top global investment destination.

But despite emerging economies becoming increasingly important in the global trade arena, industrialised nations continue to dominate worldwide economic activity. According to Unctad, developed economies accounted for 71% of global gross domestic product in 2007, although they had only 15% of the world’s population.