THE RISING Indian IT investments in China are poised to increase substantially in the coming decade and thereafter, as Asia continues to be the dominant force in the world economy. China will deepen its engagement with the world economy, Dr Victor Fung, vice chairman, International Chamber of Commerce (ICC) said in Delhi, Monday (May 26).

Addressing a ICC India - FICCI (Federation of Indian Chambers of Commerce and Industry) meeting on ‘Asia and the global economy with specific reference to China’, Dr Fung, who takes over as president of the world body in mid-June, said, “There is an emerging new paradigm of south-south trade and investments that is one of the most exciting phenomena of the 21st century globalising world economy”.

“I would expect the current trend of rising Indian investments in IT in China; which will not only be sustained, but increase significantly. This may also apply to other service industries”, said Dr Fung, who is the group chairman, of the Li and Fung Group of companies.

Dr Fung said although many Asian economies are confounded by the challenges and threats of the food crisis and environmental issues, the continent will continue to be a major force in the world economy. “This will mean that Asians will be producing more goods and services and will also be the leading innovators” he stated.

Referring specifically to China and the world economy, Dr Fung said: “I think that India has gone from a state of some apprehension about China to a more strategic perception of seeking opportunities.” China, he said, faced many challenges – rising inflation, disparity in incomes, damage to the environment and a weak institutional framework.

A new development, Dr Fung noted, will be the foreign acquisition of farm land. China has 22 per cent of the world’s population living on eight per cent of the world’s arable land. The current food crisis has accentuated the perception of China’s vulnerability. The Chinese government has announced that it will be encouraging Chinese investments in agricultural land as a means of securing a more reliable flow of food for the Chinese people, he said.

In respect of the Organisation for Economic Co-operation and Development (OECD) economies, China will remain a major supplier of manufactured goods and a major importer of capital goods and high-end consumer goods.