China's global economic rise is 'remarkable'; India overtakes US in world savings: EAC-PM report
Report highlights India’s rise across several parameters, with the country accounting for 10.3% of world savings and 10.8% of investment
- Jul 22, 2026,
- Updated Jul 22, 2026 7:23 PM IST
A new study has once again brought China’s importance as a global economic power to the fore, while highlighting that India has also risen to the top on several key economic parameters and has overtaken the US to become the second-largest contributor to world savings.
The United States continues to hold a very large share of the world economy, although it now ranks second after China in PPP terms, said the paper titled ‘The World in Purchasing Power Parity (Trends since 1992)’.
“The rise of China is the most dramatic economic phenomenon since 1992,” it noted, adding that China now accounts for almost 20% of world GDP, 32% of world savings, and 30% of world investment.
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The IMF expects these shares to be somewhat higher by 2030, it further said. “Even if its per-capita income is still lower than that of developed countries, the sheer magnitude of China’s share in the world economic system is remarkable,” it underlined.
The paper noted that while the relative per-capita income of the US has declined, it remains more than three times the world average. The US share of world investment and savings has also declined but remains substantial. Meanwhile, the relative shares of major European countries have fallen sharply across all four indicators.
The paper, authored by Sanjeev Sanyal, Member, EAC-PM, along with Aakanksha Arora, Director, EAC-PM, and Payal Sharma, a Young Professional at EAC-PM, focuses on four indicators of relative long-term economic performance in Purchasing Power Parity (PPP) terms: share in world GDP, relative per-capita income, share in world savings, and share in world investment.
“This provides a useful long-term perspective unclouded by exchange rates and relative prices,” it said.
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Key observations from the analysis include:
Share in World GDP: India is now the third-largest economy in PPP terms, with a share of 8.5% of the world economy, and the IMF expects its share to rise to 9.7% by 2030. Following decades of rapid growth, China has surpassed the US and now accounts for one-fifth of world GDP—the same position held by the US in 1992. However, the US still accounted for 14.6% of world GDP in 2025.
Relative Per-Capita Income: The per-capita PPP GDP of the US was four times the world average in 1992. In contrast, China’s and India’s per-capita incomes were merely 18% of the world average in 1992. China’s per-capita income rose to 112% of the world average, while India’s rose to 45% in 2025 and is projected to continue rising through 2030.
Share in World Savings: The US accounted for the largest share of world savings in PPP terms in 1992, at 15.4%, but its share began declining in the 2000s and fell below 10% in 2025. Meanwhile, India surpassed the US to become a distant second, with a share of 10.3% in 2025, while China now accounts for a staggering 32% and remains the largest contributor to world savings.
Share in World Investment: The US accounted for the largest share of world investment in PPP terms in 1992, at 16.1%, but is now in second place with a share of 12.1%. China ranked third in 1992, with a 6.4% share, but has since become the largest contributor to world investment, with a share of almost 30%.
India’s share rose from 2.2% to 10.8% over the same period, putting it in third place. However, India’s investment share is higher than its savings share, which is the structural source of its current account deficit.
A new study has once again brought China’s importance as a global economic power to the fore, while highlighting that India has also risen to the top on several key economic parameters and has overtaken the US to become the second-largest contributor to world savings.
The United States continues to hold a very large share of the world economy, although it now ranks second after China in PPP terms, said the paper titled ‘The World in Purchasing Power Parity (Trends since 1992)’.
“The rise of China is the most dramatic economic phenomenon since 1992,” it noted, adding that China now accounts for almost 20% of world GDP, 32% of world savings, and 30% of world investment.
Don't Miss: Braving Trump tariffs, smartphones ring in growth for India's exports to US
The IMF expects these shares to be somewhat higher by 2030, it further said. “Even if its per-capita income is still lower than that of developed countries, the sheer magnitude of China’s share in the world economic system is remarkable,” it underlined.
The paper noted that while the relative per-capita income of the US has declined, it remains more than three times the world average. The US share of world investment and savings has also declined but remains substantial. Meanwhile, the relative shares of major European countries have fallen sharply across all four indicators.
The paper, authored by Sanjeev Sanyal, Member, EAC-PM, along with Aakanksha Arora, Director, EAC-PM, and Payal Sharma, a Young Professional at EAC-PM, focuses on four indicators of relative long-term economic performance in Purchasing Power Parity (PPP) terms: share in world GDP, relative per-capita income, share in world savings, and share in world investment.
“This provides a useful long-term perspective unclouded by exchange rates and relative prices,” it said.
Must Read: China's helium export ban rattles semiconductor supply chain already hit by West Asia crisis
Key observations from the analysis include:
Share in World GDP: India is now the third-largest economy in PPP terms, with a share of 8.5% of the world economy, and the IMF expects its share to rise to 9.7% by 2030. Following decades of rapid growth, China has surpassed the US and now accounts for one-fifth of world GDP—the same position held by the US in 1992. However, the US still accounted for 14.6% of world GDP in 2025.
Relative Per-Capita Income: The per-capita PPP GDP of the US was four times the world average in 1992. In contrast, China’s and India’s per-capita incomes were merely 18% of the world average in 1992. China’s per-capita income rose to 112% of the world average, while India’s rose to 45% in 2025 and is projected to continue rising through 2030.
Share in World Savings: The US accounted for the largest share of world savings in PPP terms in 1992, at 15.4%, but its share began declining in the 2000s and fell below 10% in 2025. Meanwhile, India surpassed the US to become a distant second, with a share of 10.3% in 2025, while China now accounts for a staggering 32% and remains the largest contributor to world savings.
Share in World Investment: The US accounted for the largest share of world investment in PPP terms in 1992, at 16.1%, but is now in second place with a share of 12.1%. China ranked third in 1992, with a 6.4% share, but has since become the largest contributor to world investment, with a share of almost 30%.
India’s share rose from 2.2% to 10.8% over the same period, putting it in third place. However, India’s investment share is higher than its savings share, which is the structural source of its current account deficit.