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Transition of Power from Industrialized to Emerging Economies?!

in International Business

Transition of Power from Industrialized to Emerging Economies?!

KPMG’s Global Cities Investment Monitor reveals the top cities in the world for foreign investment. London leads the list for attracting investment in property and infrastructure projects, such as Crossrail.

The report reflects on the rise of emerging economies. China has officially overtaken Japan as the world’s second-biggest economy. According to KPMG, China and India together now constitute 25% of investments. Harvard University’s Dani Radrik wrote a paper in 2011 in which he attempted to counter a growing belief that the malaise caused by the economic crisis affecting the U.S. and Europe is opening the door to dominance by what were once emerging nations. He believed that the convergence gap between the emerging economies and the developed economies is just as wide as it was in 1950, and their potential growth rate is as high as it has ever been since the end of the Second World War. The Harvard economist sees little change of the developing economy coming to pass.

Well, is rapid convergence possible in principle but unlikely in practice, is yet to be seen. The next two cities in the list of KPMG’s top cities for investment are Shanghai and Hong Kong, China’s financial capitals.

It comes as Brazil recently became the sixth-biggest economy in the world, overtaking the UK. Its total output is worth $2.5tn (£1.6tn) and its financial capital is Sao Paulo.  Brazil’s Sao Paulo had the biggest leap, to fourth, increasing investment by 160% over the past two years.

And Moscow has received a 60% jump in investment in the past two years, landing itself in eight place

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